KUMASI - A.D 2015

DATE:  2ND APRIL, 2015
SUIT NO:  BFS/45/15

This judgment is in respect of a liquidated claim of GH¢24,420.50 and interest thereon made by the Plaintiff against the Defendant herein.


Three issues were set down for the trial. These are:


Whether or not the Plaintiff is a customer of the Defendant Financial Institution? Whether or not the Plaintiff invested GH¢24, 420.00 in the Defendant’s institution? Whether or not the Plaintiff is entitled to his claim.


The Plaintiff’s case in respect of which he gave evidence in court is that he opened an investment account with the Defendant and the terms were embodied in an investment certificate (exhibit A). According to him, the amount invested was GH¢22,100.00, the agreed interest rate was 10.5% and the total amount payable at the maturity date is GH¢24,420.50. The Defendant further testified that he has a contract with the Plaintiff that is why he has an investment certificate but the Defendant has refused to pay him despite repeated demands.


The Defendant filed a statement of defence on 6/11/14 and alleged that the Plaintiff has never been its customer and the Company is not indebted to him in any way. However, the Defendant and its lawyer failed to participate in the trial by their failure to attend court even though they were present in court when the hearing date was fixed. Under the circumstance, the Plaintiff was allowed to proof his case under Order 36 rule 1 (2) (a) of the High Court (Civil Procedure) Rules, 2004 C.I. 47. Under the said rule, the court has a discretion to hear a Plaintiff’s case when the Defendant fails to show up in court.


Without much ado, I will determine the first issue as to whether or not the Plaintiff is a customer of the Defendant?


I have had opportunity to decide on who a customer of a bank is in a couple of cases involving Noble Dream Financial Services. The first of these cases was Ampofo Twumasi v Noble Dream Financial Services suit number BFS 116/2015, Commercial court Kumasi 13/03/2015. In that case, I reviewed the position of the English Courts on the definition of a “customer” of a Bank. Two cases were discussed at length in the Ampofo Twumasi case, namely, Commissioner of Taxation v English, Scottish and Australian Bank Ltd (1920) AC 683 and Woods v Martins Bank Ltd (1959) 1 QB 55 where their Lordships defined who a customer of a Bank is. I agreed with Lord Dunedin’s statement in the Commissioners of Taxation case (supra) at page 687 thus:


“The word ‘customer’ signifies a relationship in which duration is not of the essence. A person whose money has been accepted by a bank on a footing that they undertake to honour cheques up to the amount standing to his credit is … a customer of the bank… irrespective of whether his connection is of short or long standing.”


By extension, the definition applies to non-bank financial institutions which accept deposits. I will add that deposits can be withdrawn by other means without the issuance of a cheque. A cheque serves two functions. First, in the relationship between the bank and its customer, it constitutes an instruction to pay a certain amount of money to the payee’s order or to the bearer. Second, between the drawer of the cheque and a subsequent holder, it constitutes a negotiable instrument. See Erlinger’s Modern Banking Law (2002) Oxford University Press page 364. Some financial institutions make provision of withdrawal slips which a depositor who wishes to withdraw money fills out at the counter to receive payment. From the foregoing, it is my candid opinion that the word “cheque” used by Lord Dunedin extends to other legally acceptable means by which a Bank or a non-bank financial intuition undertakes to honour payment requests made by its customers.


In the case before me, the Defendant is a non-bank financial institution. However, it accepts deposits and did accept the Plaintiff’s deposit which was put in a 91- day investment account. It can be inferred from exhibit A that the Defendant undertook to pay back the Plaintiff’s money together with the agreed interest of 10.5% per tenure on the due date stated therein i.e. 12th June, 2014. The Plaintiff need not sign a cheque to demand payment as this was not a regular checking account. Notwithstanding this distinction, the Plaintiff is still a customer of the Defendant Non-bank financial institution within Lord Dunedin’s definition which I have endorsed.


I accept the Plaintiff’s evidence that the Defendant issued exhibit A to him as a customer. A legal duty is imposed on every Non-Bank Financial Institution in Ghana to know its customers (KYC). In simple terms, it is required that every customer’s account must be “KYC” compliant. The legal basis for this is the Non-Bank Financial Institution Act, 2008, Act 774. Section 42 of the Act reads:


“A non-bank financial institution shall

(a) demand proof of and record the identity of its clients or customers, when establishing business relations or conducting transactions, in particular;

(i) opening of accounts or issuing of passbooks where  applicable,

(ii) entering into fiduciary transactions, or

(iii) performing large cash transactions,


From the above, the Defendant in this case ought to have taken reasonable steps to “know the Plaintiff” as its customer. The Defendant’s denial that it does not know the Plaintiff as its customer is not only a dereliction of duty but the said inaction is contrary to law.


At this stage, I will say that the second issue of whether the Plaintiff invested an amount of GH¢24, 420.00 in the Defendant Company has resolved itself through the Plaintiff’s oral and documentary evidence. I find that the actual amount invested was GH¢22,100.00 but with the accrued interest, the amount due on the maturity date is GH¢24,420.00. Therefore, the only outstanding issue is whether the Plaintiff is entitled to his claim.


On the face of exhibit A, the Defendant undertook to pay the Plaintiff the sum of GH¢24,420.00 on 12/06/2014. From the same exhibit A, this amount was to be redeemed upon three days notice given to the Defendant after the maturity date. The Plaintiff has said in evidence that she did make demands for payment on the Defendant but has still not received his money. On the totality of the evidence led by the Plaintiff, I find that the Defendant has no justification for holding on to his money. I conclude that the Plaintiff is entitled to be paid the sum of GH¢24,420.00 which became due on 12/06/2014. In consonance with Rules 1 (a) and (b) and 2 (1) of the Courts (Award of Interest and Post Judgment Interest) Rules 2005, C.I. 52, the Defendant shall pay interest on the sum of GH¢24, 420.00 at the prevailing bank rate and at simple interest from 12/06/2014 till date of final payment.


Accordingly, judgment is entered in favour of the Plaintiff together with the interest stated above.


The trial was concluded in a day and the facts of the case are straightforward. For these reasons and in line with order 74 of C.I. 47, I award costs of GH¢1,000.00 against the Defendant in favour of the Plaintiff.