JUDGMENT

Per an amended writ of summons and a statement of claim, the plaintiff claims against the defendants:

“a. A declaration that by accepting to open an escrow account, which is otherwise described as Account No. 2 or Account Number 1051770023498, 1st Defendant became an escrow agent of Plaintiff and 2nd Defendant.

b. A declaration that by accepting to open an escrow account, which is otherwise described as Account No. 2 or Account Number 1051770023498,1^st Defendant became a legal trustee of Plaintiff and 2nd Defendant.

c. A declaration that 1st Defendant was negligent in its duties as an escrow agent and legal trustee of Plaintiff and 2nd Defendant, thereby occasioning unauthorized withdrawals from the escrow account, which is otherwise described as Account No. 2 or Account Number 1051770023498, thereby resulting in Plaintiff being overreached to the tune of One Hundred and Ninety Four Thousand Ghana Cedis (GH¢194,000.00).

d. A declaration that 2nd Defendant has breached the agreement referred to in (c) above.

e. A declaration that there exists an agreement between Plaintiff and 2nd Defendant that 2nd Defendant will pay Plaintiff 60% of the net profit realized from 2nd Defendant’s execution of the contract 2nd Defendant had with the Ministry of Education to supply school uniforms.

f. A declaration that 2nd Defendant has breached the terms of the said agreement.

g. Damages for 2nd Defendant’s breach of the said agreement.

h. A declaration that 3rd and 4th Defendants have defrauded Plaintiff of his earnings of 60% of the net profit realized by 2nd Defendant from 2nd Defendant’s execution of the contract as described in (a) above.

i. An order directed at the 2nd, 3rd and 4th Defendants to pay to Plaintiff 60% of the net profit realized by 2nd Defendant from 2nd Defendant’s execution of the contract.

j. An order for the recovery of the sum of One Hundred and Ninety Four Thousand Ghana Cedis (194,000.00) from Defendants jointly and severally.

k. Interest on the sum of One Hundred and Ninety Four Thousand Ghana Cedis (194,000.00) from September, 2010 till the date of final payment.

l. General Damages

m. Costs

n. Any other relief(s) as this Honourable Court deems just and equitable”

After the service on the defendants of the writ and its accompanying statement of claim, the first defendant entered appearance and subsequently filed a statement of defence. The 2^nd, 3^rd, and the 4^th defendants were served with the writ of summons and the statement of claim by substituted service. That notwithstanding, they failed to put in an appearance. The case therefore proceeded without the 2^nd, 3^rd and 4^th defendants participating. After the failure of pre-trial settlement the matter was set down for hearing. However and as already noted, the 2^nd, 3^rd and the 4^th defendants refused to participate in the trial and hence the matter was essentially heard between the plaintiff and the 1^st defendant bank.

The facts of the case are that the 2^nd defendant secured a contract from the Ministry of Education to supply basic school uniforms to the Ministry. As a result, the 2^nd defendant needed funds to enable it meets its obligations under the said contract. The 3^rd and the 4^th defendants who are the directors of the 2^nd defendant therefore approached the plaintiff and requested for an amount of GH₵700, 000 from the plaintiff. The parties agreed to pay to the plaintiff 60% of the profit that would be derived from the contract with the Ministry. Subsequently, the plaintiff was made to make some advancement to the 2^nd defendant on the strength of the contract between him and the 2^nd to the 4^th defendants. Again the parties agreed to open an escrow account with the 1^st defendant who already kept an account of the 2^nd defendant. The plaintiff was to be a signatory to this escrow account. At a point the plaintiff and the 3^rd defendant agreed to go to the bank to make some withdrawals from the escrow account but waited as the plaintiff did at the bank, the 3^rd defendant did not show up. The plaintiff then became suspicious and wrote a letter instructing the 1^st defendant not to pay money out of the 2^nd defendant’s account. The 1^st defendant did not however heed the plaintiff’s request. Subsequently, the Ministry paid the contract sum to the 2^nd defendant through its account with the 1^st defendant. The 3^rd and the 4^th defendants withdrew the funds from the accounts. The plaintiff therefore initiated the instant action claiming the reliefs endorsed on the writ of summons against the defendants.

One of the main issues that crops up from the pleadings for determination is whether or not the 2^nd defendant represented by the 3^rd and the 4^th defendants agreed with the plaintiff to pay 60% of the profit that will accrue to the 2^nd defendant upon the execution of the contract with the Ministry of Education. The evidence on record leaves the court in no doubt that the 2^nd defendant through the 3^rd and the 4^th defendants entered into an agreement by which the 2^nd defendant agreed to source from the plaintiff a credit facility in the sum of GH₵700,000.00. Indeed exhibit A shows clearly that the 2^nd defendant also agreed to pay to the plaintiff 60% of the net profit which it would realize from the execution of a contract which it had secured from the Ministry of Education to supply the said Ministry with school uniforms.

It is also quite clear from the evidence on record that as a result of the agreement between the plaintiff and the 2^nd to the 4^th defendants the parties again agreed to open an escrow account on its account with the 1^st defendant bank, into which the parties agreed to pay all the receipts from the Ministry of Education in respect of the contract between the Ministry and the 2^nd defendant. Exhibit A which was dated on the 12^th April, 2010, attests to this finding. From exhibit A the court finds that the 3^rd and the 4^th defendants acting in their capacities as the directors of the 2^nd defendant wrote to the 1^st defendant to open the escrow account in accordance with the agreement with the plaintiff. Indeed, exhibit A also introduced the plaintiff as one of the signatories to the escrow account. From the evidence on record the court finds that the plaintiff and the 3^rd defendant, in line with the agreement, went to the 1^st defendant bank and completed the relevant documents for the opening of the said escrow account.

The plaintiff maintains that the escrow account was actually opened and that the account number of the escrow account was 1051770023498. However, the court finds that soon after the 2^nd, 3^rd and the 4^th defendants had written exhibit A, the 3^rd and the 4^th defendants, without the knowledge of the plaintiff herein, wrote exhibit ‘1’ dated the 11^th November, 2010 to the 1^st defendant and requested the suspension of the opening of the escrow account and also directed the 1^st defendant to lodge all proceeds from the contract with the Ministry of Education into the existing account of the 2^nd defendant. The court finds that account number 1051770023498 is not the escrow account but the existing account of the 2^nd defendant with the 1^st defendant bank. It is the law as affirmed in P. S.

Investment Ltd. vs. Central Regional Development Corporation and Others [2012] 1 SCGLR 611 that

“The business of a company shall be managed by the board of directors of the company who may exercise the powers of the company with the exception of powers which under the Companies Act or the regulations of the company are required to be exercised by the members in general meeting.”

It is the opinion of the court that to the extent that the 3^rd and the 4^th defendants are the directors of the 2^nd defendant company herein and to the extent that it is the 3^rd and the 4^th defendants who wrote exhibit A1 authorizing the opening of an escrow account with the plaintiff as a signatory, the court will hold that they have the power to write exhibit 1 to request the 1^st defendant to suspend the opening of the escrow account.

Nonetheless, since the 2^nd, 3^rd and the 4^th defendants have agreed with the plaintiff that the plaintiff shall make available funds to the 1^st defendant to assist the 1^st defendant carry out its contract with the Ministry of Education and since the 2^nd, 3^rd and the 4^th defendants have caused the plaintiff to believe that an escrow account was to be opened in the name of the 2^nd defendant to which the plaintiff was to be made a signatory in order that the plaintiff may have the opportunity to protect any funds he might make available to the 2^nd defendant, the 2^nd, 3^rd and the 4^th defendants owed it as a duty to the plaintiff to be candid with him and make the plaintiff aware of any subsequent suspension of the opening of the escrow account. The court will hold that the suspension of the opening of the escrow account in the way and manner that it was done, as shown by exhibit 1, without the knowledge of the plaintiff was fraudulent of the plaintiff and that the conduct of the 2^nd, 3^rd and the 4^th defendants in this regard was indeed fraudulent. The court has held in Kusi vs. Kusi [1968] GLR 1120 that:

“to sustain the tort of fraud the plaintiff had to prove not only that the defendant made representations as to existing facts which were false to his knowledge but also that he intended that the plaintiff should act on the false representations and be deceived by them. There must be proved an actual intention to deceive the plaintiff. Then the plaintiff must go on to establish that he was influenced by the misrepresentation, to his detriment. What was required was proof that he suffered damage as a result of the misrepresentation: that is, that the one event caused the other and that he relied upon the truth of the representation.”

From the pleadings and the evidence on record, the court finds that as a result of the agreement between the plaintiff and the 2^nd, 3^rd and the 4^th defendants, the plaintiff paid various sums of money totalling GH₵194,000.00 to the 2^nd defendant including an amount of GH₵112,000.00 which the plaintiff paid into the term deposit account, exhibit ‘H’, of the 2^nd defendant with the 1^st defendant as a cash backed performance bond or guarantee for a loan contracted by the 2^nd defendant as shown by exhibit B.

It is also clear from the evidence on record that after the 2^nd, 3^rd, and the 4^th defendants have succeeded in getting the plaintiff to agree that the plaintiff was going to enjoy 60% of the profit from the contract with the Ministry of Education, and after the 2^nd, 3^rd and the 4^th defendants have succeeded in getting the plaintiff to part with the sum of GH₵194,000.00, the 2^nd, 3^rd and the 4^th defendants deceived the plaintiff into believing that he the plaintiff was a signatory of an escrow account opened by the 2^nd defendant but in the meantime and unknown to the plaintiff, the 2^nd, 3^rd and the 4^th defendants secretly wrote to the 1^st defendant to suspend the opening of the escrow account and directed the lodgement of all receipts from the Ministry into the parent account of the 2^nd defendant and by that the 2^nd, 3^rd and the 4^th defendants managed to withdraw all the monies from the 2^nd defendant’s account without paying the plaintiff his due. The court therefore finds that the 2^nd, 3^rd and the 4^th defendants are in breach of their agreement with the plaintiff. The court will therefore enter judgment for the plaintiff against the 2^nd, 3^rd and the 4^th defendants. The court hereby orders the 2^nd, 3^rd and the 4^th defendants to pay to the plaintiff 60% of the net profit derived from the contract with the Ministry of Education executed by the 2^nd defendant. The 2^nd, 3^rd and the 4^th defendants are also ordered to pay to the plaintiff the sum of GH₵194,000.00 which the plaintiff paid to the 2^nd defendant to enable the 2^nd defendant executes its contract with the Ministry. The 2^nd, 3^rd and the 4^th defendants are also ordered to pay interest on the sum of GH₵194,000.00 at the current bank rate from the 12^th day of January, 2012 the day the writ was issued till the date of final payment.

The court will award to the plaintiff against the 2^nd, 3^rd and the 4^th defendants the sum of GH₵20,000.00 for general damages for the breach of the contract with the plaintiff.

The plaintiff also seeks reliefs against the 1^st defendant. The first and second reliefs which the plaintiff seeks against the 1^st defendant are a declaration that by accepting to open an escrow account, the 1^st defendant became an escrow agent and legal trustee of the plaintiff and the 2^nd defendant. The evidence on record shows that the plaintiff has never instructed the 1^st defendant to open an account for the plaintiff. There is also no evidence that the plaintiff has created any trust or entrusted anything with the 1^st defendant either on behalf of himself or any other person as far as the opening of an escrow account with the 1^st defendant is concerned.

Exhibit A1 shows that it was the 2^nd defendant, through its directors, that instructed the 1^st defendant to open an escrow account in the 1^st defendant bank for and on behalf of the 2^nd defendant. Admittedly, the instruction on exhibit A1 shows that it was the plaintiff and Peter Annan, a director of the 2^nd defendant, who were to be the authorised signatories to the escrow account. The plaintiff has made admissions, during his cross examination, to the effect that he has never been a director of the 2^nd defendant. Indeed there is no evidence to the effect that the plaintiff was one of those who directed the opening of the escrow account. Again the plaintiff has failed to adduce cogent evidence to show that the 1^st defendant opened the said escrow account as instructed by the 2^nd defendant. The court is satisfied from the evidence on record that, the directors of the 2^nd defendant, who by exhibit A1 dated the 12th of September, 2012, instructed the opening of the escrow account again directed the suspension of the opening of the escrow account by their letter of 11^th November, 2012, exhibit 1 herein. The court holds that the directors have the power and authority to write exhibit 1 and direct the suspension of the opening of the escrow account.

The plaintiff dwelt on exhibit C to show that an escrow account was opened. Exhibit C is an instruction on behalf of 2^nd defendant in which certain payments were authorised to be made out of the account of the 2^nd defendant. Exhibit C was signed by Peter Annan, a director of the 2^nd defendant and the plaintiff. By this exhibit the plaintiff sought to show that it is because account number 1051770023498 is an escrow account that Peter Annan and the plaintiff were able to instruct payment therefrom on behalf of the 2^nd defendant in accordance with the contents of exhibit A1.

However, the explanation offered by the 1^st defendant, which the court has no reason to reject, is that the mandate on account number 1051770023498 is for payment to be effected upon the instruction of any of the directors of the 2^nd defendant who are Peter Annan and Raymond Kotey.

According to the 1^st defendant once the bank becomes satisfied that any of the directors of the 2^nd defendant has authorised payment by the verification of the signature of any of the directors appearing on an instrument, the bank will go ahead to honour a request notwithstanding the other signature on the instrument. According to the 1^st defendant therefore, the instructions on exhibit C was carried out by the 1^st defendant not because of the signature of the plaintiff on exhibit C but on the strength of the signature of Peter Annan, a director of the 2^nd defendant, present on exhibit C. Indeed, the court finds and holds that the 1^st defendant never became an agent or a legal trustee of the plaintiff in any way save the 2^nd defendant.

The plaintiff also says that the 1^st defendant was negligent in its duties as an escrow agent and legal trustee of the plaintiff and the 2^nd defendant as a result of which the 1^st occasioned unauthorized withdrawals from the escrow account resulting in the plaintiff being overreached in the sum of GH₵194,000.00. The court has found as a fact that no escrow account was opened by the 1^st defendant on behalf of the 2^nd defendant. Again the court has found as a fact that the 1^st defendant was never an agent or a legal trustee of the plaintiff. The 1^st defendant, as bank, was in business with the 2^nd defendant and as such was bound to take instructions from only the authorized representatives of the 2^nd defendant in the persons of the named directors- Peter Annan and Raymond Kotey. Hence, the 1^st defendant acted lawfully when it refused to act on the request of the plaintiff contained in exhibit ‘E’ by which the plaintiff sought to suspend the operation of the accounts of the 2^nd defendant when he was neither a director of the 2^nd defendant nor an authorized signatory to the accounts of the 2^nd defendant. In the opinion of the court the 1^st defendant was not negligent when it refused to heed the warning in exhibit ‘E’ given by the plaintiff. The court is firmly of the opinion that the plaintiff is not entitled to any of his claims against the 1^st defendant. Accordingly, the claims against the 1^st defendant by the plaintiff are dismissed.