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JUDGMENT:
The Plaintiff has filed a suit
against the Defendant seeking
the following reliefs:
“a. An order for the
payment of the sum of Fifty-five
thousand,
One Hundred and Eighty Ghana
Cedis (GH¢55,180.00)
being the amount lodged in
account no. 0200 1019 02918
that Defendant opened for
Plaintiff’s domestic help,
Oppong-Lewis.
b.
Interest on (a) from
January, 2009
c.
Damages for negligence.
The facts of the case are that
on the 12th of May,
2006, Plaintiff’s nineteen (19)
year old domestic help, one
Oppong-Lewis, opened an
individual savings account with
the Accra Main Branch of
Defendant Bank at Kokomlemle.
As a prerequisite for the
opening of the account and in a
bid to obtain information about
the customer, including the
source of his funds, Defendant
furnished Oppong-Lewis with an
Account Opening form. On the
Account Opening form, the said
Oppong-Lewis disclosed his
physical address as Baatsonaa
Spintex Road and his residential
address as Plot No. 804A
Baatsonaa which turned out to be
untrue as indeed and in fact,
the potential account holder
lived with Plaintiff herein at
Teshie-Nungua, Accra.
It is the case of Plaintiff that
Defendant neglected to verify
this. There was no independent
verification of the residential
address by Defendant herein. In
proof of this residential
address, Oppong-Lewis merely
provided an electricity bill
from the Electricity Company of
Ghana which did not bear his
name but the name of a Borteye
Kalebi. It is Plaintiff’s
further case that Defendant
neglected or failed to demand
any document evidencing the fact
that their prospective customer
indeed stayed with the said
Borteye Kalebi, the name on the
bill. That, Defendant accepted
the disclosures by Oppong-Lewis
in a robotic fashion regarding
his address without any attempt
to cross-check. For a
residential telephone number,
Oppong-Lewis stated a cell phone
number 0243 776 908. The
Defendant accepted this even
though it was a mobile phone
number and not a fixed or
landline. The only
identification document produced
to Defendant and which bore
Oppong-Lewis’ name was an
Electoral Commission of Ghana
Voter ID Card number 23192790
(CB). It is Plaintiff’s
contention that this document
was clearly unsatisfactory as
proof of address and same did
not indicate where Oppong-Lewis
lived, the residential address,
telephone number, what work he
was engaged in, etc etc. On the
basis of these inadequate or
alleged false information
provided Defendant by their
prospective customer,
Oppong-Lewis, Defendant opened
an account numbered 0200 1019
02918 for the said Oppong-
Lewis.
Plaintiff’s further case is that
on a disclosure of the source of
funds, Defendant’s prospective
customer Oppong-Lewis, declared
same to be from
“inheritance/gifts”. It is
Plaintiff’s contention that
again Defendant neglected,
failed and/or refused to demand
details or evidence of the
nature of “inheritance/gifts”
claimed by Oppong-Lewis to be
the source of the funds he would
be lodging with Defendant.
Under “Expected volume and type
of activity” that he would be
conducting across the account,
the said Oppong-Lewis declared
that he would be making deposits
of Three Million Cedis or Three
Hundred Ghana Cedis (GH¢300.00)
once every month, and
withdrawals of Sixty Ghana Cedis
(GH¢60.00) three (3) times every
month. Defendant was also
informed by its prospective
customer, Oppong-Lewis that he
was a student and his main
business was schooling and
according to Plaintiff, this
implied that he had no regular
source of income. Contrary to
the declaration that he would
make only a single deposit every
month, Oppong-Lewis made six (6)
deposits in the very first month
of May, 2006 when he opened the
account.
It is Plaintiff’s further
contention that in the light of
the circumstances of
Oppong-Lewis and the information
provided by him before he opened
the account, particularly his
declared source of funding and
occupation, Defendant did not
find any justifiable basis for
questioning Oppong-Lewis about
the lodgements. Furthermore,
the trend of frequent lodgements
in Oppong-Lewis’ account
continued with sometimes as high
as eight (8) lodgements in one
month, until January, 2009,
when the account ceased to be
active. In total, Oppong-Lewis
deposited an amount of
fifty-five thousand, One Hundred
and Eighty Ghana Cedis
(GH¢55,180.00) in the account
opened with Defendant.
It is therefore the case of the
Plaintiff that all the monies
that were deposited in
Oppong-Lewis account with
Defendant were the profit of
theft perpetrated by the said
Oppong-Lewis on Plaintiff, and a
store of his run by his wife.
Oppong-Lewis over the relevant
period stole an Ecobank Credit
Card belonging to Plaintiff and
withdrew various amounts from an
ATM machine. The said
Oppong-Lewis deposited all the
monies he withdrew with the
Plaintiff’s Credit Card in the
account he had opened with
Defendant; Plaintiff’s further
case is that the Defendant had a
responsibility to prevent the
use of its facilities as a
vehicle for the perpetration of
crime or the concealment of the
proceeds of same. Defendant
therefore ought to scrutinize
the backgrounds and records of
holders of accounts with
Defendant. It is in furtherance
of the Defendant’s duty that
Defendant requests for
information about customers’
activity, profile, etc before
opening an account for the
customer.
It is thus Plaintiff’s
contention that Defendant
grossly abdicated its duty in
not checking or verifying all
the information stated by
Oppong-Lewis’s identity before
the account was opened for him.
Defendant again abandoned its
duty to monitor the activity
conducted on the account of its
customer, Oppong-Lewis, even
though same was suspicious and
clearly inconsistent with the
declarations made by the said
Oppong-Lewis before the account
was opened for him by
Defendant. Plaintiff contends
that the Defendant’s negligence
resulted in Oppong-Lewis using
Defendant’s facility to
perpetrate theft on Plaintiff
and concealment of the proceeds
thereof.
The Defendant has rejected the
assertion that it has any duty
of care towards the Plaintiff.
It has contended that neither at
the time of opening the account
nor thereafter did it have any
idea of the relationship between
the Plaintiff and Oppong-Lewis
to be put on notice regarding
the actual situation of
Oppong-Lewis; it did not know
Plaintiff at all. Defendant
contended further that whatever
was done or omitted to be done
by it on the opening of a bank
account for Oppong-Lewis could
not have motivated Oppong-Lewis
to steal from the Plaintiff.
Defendant rather by his conduct
in the management of his credit
card was considerably negligent,
permitting Oppong-Lewis to gain
access to same and use same for
the withdrawal of monies
standing to the credit of the
Plaintiff. This could not be
deemed to be the fault of the
Defendant.
As stated by Emmanuel Nartey
Teye, an employee at Defendant
Bank (DW1) in his evidence, at
the time of opening the account
the Defendant sought to
establish the true identity of
Oppong-Lewis. He submitted on
Electoral Commission of Ghana
Voter ID Card. The Defendant
has a system by which it
verifies the authenticity of
Voter ID Cards submitted to it
by prospective customers as
proof of their identity. G-Vive
is an IT system linked to the
database of the Electoral
Commission of Ghana. When a
card number is imputed into
G-Vive, if the card is authentic
it is confirmed. The identity of
prospective customers, when they
sought to open and operate an
individual savings account, was
of much more priority than other
requirements in the “Know Your
Customer” (“KYC”) policy. D.W.1
stated further that the
individual savings account is
not a cheque based account and
was therefore operated
personally by the customer.
Thus the customer always had to
be present himself at the Bank
to transact business on the
account. And so when the Bank
confirms the true identity of
such a customer, that fact can
found the basis for the opening
of an account for such a
customer.
The evidence placed before the
court which has not been
challenged is that Oppong-Lewis
was convicted on his own plea
and sentenced to six (6) years
in prison, indicating that at
least some, if not all of the
monies lodged in the account of
Oppong-Lewis were proceeds of
theft alleged in the instant
case to have been committed on
Plaintiff.
In my opinion, the reliefs for
an order for the payment of the
sum of GH¢55,180.00 being the
mount lodged in account no. 0200
1019 02918 that Defendant opened
for Oppong-Lewis together with
interest, are not sustainable.
Plaintiff has not led any
evidence to establish that
Defendant owes it the said
amount by way of a contractual
obligation or that the instant
action is for “money had and
received” and therefore
Plaintiff is entitled to a
refund, and I will so find.
Plaintiff however appears to be
making a case for negligence and
claiming damages for negligence.
It is trite learning that the
tort of negligence requires more
“…..than heedless or careless
conduct” (Lochgelly Iron
& Coal Co v. McMullan [1934] AC
1 at 25. H.L. per Lord
Wright). The injured party must
establish that the Defendant
owed him a duty to take care to
protect him from a kind of harm
suffered; that he was in breach
of that duty; and that it was
the Defendant’s breach of duty
which was found to be the cause
of the Plaintiff’s injury.
Duty, breach and causation must
be established in every
successful claim in negligence.
There is no doubt that actions
in negligence must fail where
duty is not established. In
developing the existence and
scope of duties of care, the law
originally developed in an
empirical manner by decisions
that in some particular
circumstances there was a duty
and that in others there was
none, by identifying categories
of duties. The first attempt to
rationalize these cases was made
in Heaven v. Pender, [1881]
11 QBD 503 at 509, by Brett
MR, who produced the formular:
“whenever one person is by
circumstances placed in such a
position with regard to another
that everyone of ordinary sense
who did think would at once
recognise that if he did not use
ordinary care and skill in his
own conduct with regard to those
circumstances he would cause
danger or injury to the person
or property of the other, a duty
arises to use ordinary care and
skill to avoid such danger.”
Then came the dictum of Lord
Atkin in Donoghue v.
Stevenson [1932] AC 562 H.L. at
580; the famous “neighbour
principle”
“The rule that you are to love
your neighbour becomes in law,
you must not injure your
neighbour, and the lawyer’s
question, (Who is my neighbour?)
receives a restricted reply.
You must take reasonable care to
avoid acts or omissions which
you can reasonably forsee would
be likely to injure your
neighbour. Who, then, in law is
my neighbour? The answer seems
to be persons who are so closely
and directly affected by my act
that I ought reasonably to have
them in contemplation as being
so affected when I am directing
my mind to the acts or omissions
which are called in question.”
Whether a duty exists or not is
sometimes straightforward,
sometimes not. There are
numerous and extensive
categories of situations which
are treated by the courts as
imposing a duty of care. Thus
one must ascertain whether on
similar facts the courts have
already recognised a duty for,
because whether a duty exists
will be a matter of law not
fact. In the case of Edward
Nasser & Co. Ltd. V. Mc Vroom &
Anor [1996-97] SCGLR 468 @479
Acquah JSC stated that the
categories of negligence are not
closed, although a relation of
proximity must exist before a
duty of care can arise, the duty
must depend on all the
circumstances of the case and
that it must be considered
whether it is just and
reasonable to impose a duty.
In the instant case, Plaintiff’s
case appears to be hinged on the
fact that the Defendant did not
adhere to the “Know Your
Customer” (“KYC”) Guidelines
issued by the Bank of Ghana.
Furthermore, the said KYC
Guidelines establish a duty of
care by the Defendant Bank to
the general public and thus
Defendant is in breach of the
said duty of care. Plaintiff is
contending that the Defendant
Bank owes a duty of care to the
general public to protect it
from money laundering activities
and the perpetration of crime
generally.
In a document by the Basel
Committee on Banking Supervision
on “Customer due diligence for
banks”, October 2001 “, tendered
in evidence as “Exhibit “F”,
this is what has been stated in
the “Introduction”:
“1. Supervisors around the
world are increasingly
recognising
the importance of ensuring that
their banks have adequate
controls and procedures in place
so that they know the customers
with whom they are dealing.
Adequate due diligence on new
and existing customers is a key
part of these controls. Without
this due diligence, banks can
become subject to reputational,
operational, legal and
concentration risks, which can
result in significant financial
cost.
3.
KYC is
most closely associated with the
fight against
money-laundering………………………………………..Sound
KYC policies and procedures are
critical in protecting the
safety and soundness of banks
and the integrity of banking
systems.
4.
The
Basel Committee’s approach to
KYC is from a wider prudential,
not just anti-money laundering
perspective. Sound KYC
procedures must be seen as a
critical element in the
effective management of banking
risks. KYC safeguards go beyond
simple account opening and
record-keeping and require banks
to formulate a customer
acceptance policy and a tiered
customer identification
programme that involves more
extensive due diligence for
higher risks accounts, and
includes proactive account
monitoring for suspicious
activities.
In Ghana, all banks and
financial institutions are to
adhere to the Anti-Money
Laundering Act 2008 (Act 749)
which is to deter people and
organisations from attempts to
transform illegally acquired
wealth into clean resources.
The Act gives banks the legal
authority to question and report
large and suspicious lodgement
of funds and suspicious
transactions to a money
laundering authority to be
instituted with the passage of
the law. In response to the
current threat of money
laundering and terrorist
financing across the world, a
Financial Intelligence Centre
(FIC) is to established by the
Bank of Ghana as provided for by
the law to receive and analyse
financial information and
suspicious transactions for
further investigations by law
enforcement authorities.
At a seminar organised by KPMG
held in Accra in 2009 (http://www.ghana
business news.com), the then
Deputy Bank of Ghana Governor,
Mr. Van Lare Dosoo, pointed out
that “where banks fail to
keep a business transaction
record, report suspicious
transaction or an officer who
commits money laundering
offence, the Act empowers the
FIC to obtain a search warrant
to enter any premises belonging
to that officer or employee of
such institution”. The
Deputy Governor said the Central
Bank’s “Know Your Customer”
policies were geared towards
helping banks to determine
customers’ true identity,
sources of income and business.
So, is it the case that by
virtue of the drive to counter
money laundering and other
criminal activities, banks
(particularly Defendant Bank)
have a duty of care towards the
general public?
Needless to say, the
relationship between the
Plaintiff and Oppong-Lewis is
that of a banker and customer.
It is trite learning that the
relationship of banker to
customer is one of contract.
The classic description of the
contract constituted by the
relation of banker and customer
is that of Atkin LJ in
Joachimson v. Swiss Bank
Corporation [1921] 3 KB 110 at
127, as follows:
“The bank undertakes to receive
money and to collect bills for
its customer’s account. The
proceeds so received are not to
be held in trust for the
customer, but the bank borrows
the proceeds and undertakes to
repay them. The promise to
repay is to repay at the branch
of the bank where the account is
kept, and during banking hours.
It includes a promise to repay
any part of the amount due
against the written order of the
customer addressed to the bank
at the branch, and as such
written orders may be
outstanding in the ordinary
course of business for two to
three days; it is a term of the
contract that the bank will not
cease to do business with the
customer except upon reasonable
notice. The customer on his
part undertakes to exercise
reasonable care in executing his
written orders so as not to
mislead the bank or to
facilitate forgery. I think it
is necessarily a term of such a
contract that the bank is not
liable to pay the customer the
full amount of his balance until
he demands payment from the bank
at the branch at which the
current account is kept.”
It is impossible to give an
exhaustive list of the duties of
care owed by banker and customer
to each other because in any
given case the court is
concerned with the particular
contract or, in the case of an
alleged duty of care in tort,
the proximity of the parties,
reasonableness and justice on
the particular facts. However,
reported decisions give guidance
about situations where a duty of
care will or will not be found
to exist.
One of the most prominent of the
bankers duty to its customers is
that of confidentiality. The
judgment in Tournier v.
National Provincial and Union
Bank of England [1924] 1KB 461,
established that the duty is a
legal one arising out of
contract, not merely a moral
one. Breach of it therefore,
gives a claim for damages,
substantial if injury has
resulted from the breach. It
is, however, not an absolute
duty but qualified, being
subject to certain reasonable
exceptions. Bankes L.J said as
follows:
“In my opinion it is necessary
in a case like the present to
direct the jury what are the
limited and what are
qualifications of the
contractual duty of secrecy
implied in the relation of
banker and customer. There
appears to be no authority on
the point. On principle I think
that the qualifications can be
classified under four heads: (a)
where disclosure is under
compulsion by law; (b) where
there is a duty to the public to
disclose; (c) where the
interests of the bank require
disclosure; (d) where the
disclosure is made by the
express or implied consent of
the customer.”
As regard to bank’s duty to the
public, Bankes L.J. said that
there were many instances of
private duty and cited Lord
Finlay in Weld-Blundell v.
Stephens [1920] AC 956 at 965,
to the effect that “Danger to
the state or public duty may
supersede the duty of the agent
to the principal.” Subject
to the statutory duties of
disclosure (for example, those
created by money laundering
legislation) the giving of
information to the police for
instance, in regard to a
customer suspected of crime,
would be unwarranted. A point
of view to which Bankes L.J.
subscribed in the Tournier
case (supra). There appears
to be very few reported cases
where a banker has thought
himself under a duty to the
public to disclose. One such is
Libyan Arab Foreign Bank v.
Bankers Trust Co. [1989] QB 728;
[1989] 3 ALL ER 252, where
the bank invoked the exception
in relation to a disclosure made
by it to, and at the request of,
the Federal Reserves Bank of New
York of payment instructions
which the Defendant had received
from the claimant. Staughton J
reached a tentative conclusion
that the exception applied, but
did not find it necessary to
reach a final conclusion on the
point.
It was held in Pharaon v.
Bank of Credit and Commerce
International SA (in
liquidation) [1998] 4 ALL ER,
455, that the public
interest in upholding the duty
of confidentiality exisiting
between banker and customer is
subject to being overridden by
the greater public interest in
making confidential documents
relating to the alleged fraud
for the purpose of uncovering
that fraud. However, such
disclosure should be limited to
what is reasonably necessary to
achieve the purpose of the
public interest in disclosure.
Now, the question I have been
asking myself is what is the
public duty of the Defendant
Bank to protect individual
customer’s money in their
homes? I would think none.
Does the bank owe a duty to
every relation of a customer?
Again, I would think not. The
position of the law is that even
where there is clearly a duty in
respect of a particular harm,
there may not be liability if
the risk which materializes is
not of a type envisaged by the
law when imposing the duty on
the defendant. There is no duty
of care in circumstances where a
defendant cannot foresee that by
his actions he will cause harm
to the plaintiff.
From the above it is clear that
there may be a duty of care in
view of the anti money
laundering law, but in my
opinion that duty is owed to the
state. It is my further opinion
that the “KYC” Guidelines is in
respect of a suspected money
laundering transactions and
“high net worth customers”, it
is not meant for “private”
thefts as in the instant case.
It is for that reason, in my
opinion, that the current “KYC”
Guidelines have been revised as
per the evidence of Rev. Kwasi
Twum-Antwi, (Bank Supervisor,
Bank of Ghana), for banks to
verify the authenticity of
customers address of only “high
net worth” customers.
I must however state here that
it is my opinion that Defendant
was not as diligent as it
probably should have been in not
detecting that the address on
the Electricity Bill was not the
same as that stated by the
Oppong-Lewis on the application
form. Also, Defendant could
have questioned Oppong-Lewis as
to the source of the monies he
was depositing into his account;
but to what avail? The question
is, even if the correct address
had been stated by Oppong-Lewis
how would that have prevented
the theft? And, who should
Defendant have reported the fact
that Oppong-Lewis was depositing
so much money into his account,
to?
Furthermore, the evidence placed
before the Court is that the
Ecobank Gold Visa Credit Card
that was stolen by the said
Oppong-Lewis and used to
withdraw money from Plaintiff’s
account and deposited into the
account with Defendant, was the
2nd one issued to the
Plaintiff. The first one had
been compromised while Plaintiff
was on a trip in South Africa.
The Terms and Conditions for the
issuance of such a card was
tendered in evidence (Exhibit
“1”), and clause 3.8 stated that
the cardholder must take all
reasonable precautions to
prevent the card and PIN from
being used fraudulently or shall
be liable for any losses due to
Ecobank. The evidence is that
the said section was breached by
the Plaintiff in that he did not
sign the card. Anyone who laid
hands on it could have placed
his signature on and used it as
his. By his evidence, Plaintiff
conceded that the personal
identification number (PIN) was
not destroyed by him. It was
kept with the card in an
envelope and obviously
Oppong-Lewis laid hands on the
card and also the PIN. That was
how he could access the credit
of the Plaintiff with the credit
card at several automatic teller
machines as alleged by him.
In the circumstances, I will
find that Defendant did not owe
Plaintiff any duty of care and
therefore there is no breach to
talk of. Plaintiff is therefore
not entitled to the award of
damages for breach, and I will
so hold.
In conclusion, I will dismiss
Plaintiff’s entire claim. I
will state further that the
Plaintiff’s case appears to be
quite a novel and interesting
one and gave me some anxious
moments, and should have given
any legal practitioner some
anxiety. This suit has assisted
in raising issues in certain
areas of the law that deserve to
be developed. For this reason I
will not award costs in this
matter.
(SGD)
BARBARA ACKAH-YENSU (J)
JUSTICE OF THE HIGH COURT
COUNSEL
GODFRED YEBOAH ODAME
- PLAINTIFF
NATHAN YARNEY
- DEFENDANT
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