NEUSEITE MEDITEK AND KONSULT VRS UNITED BANK FOR AFRICA (GH) LTD. (H1/28/2021) [2021] GHACA 35 (22 July 2021)

IN THE SUPERIOR COURT OF JUDICATURE IN THE COURT OF APPEAL ACCRA-GHANA AD-2021 CORAM : SENYO DZAMEFE JA (PRESIDING) P. BRIGHT MENSAH JA NOVISI ARYENE JA SUIT NO. H1/28/2021 22ND JULY, 2021 NEUSEITE MEDITEK AND KONSULT PLAINTIFF/RESPONDENT VRS UNITED BANK FOR AFRICA (GH) LTD. DEFENDANT/APPELLANT ========================================================== JUDGMENT ========================================================== NOVISI ARYENE JA Plaintiff/respondent hereinafter referred to as plaintiff, is a company engaged in the sale and retail of pharmaceutical products in Accra and Kumasi. Defendant/appellant, herein after referred to as defendant, is a Bank with branches in Accra and Kumasi. Plaintiff is a customer of defendant Bank with accounts at defendant’s Abossey Okai Branch in Accra, and its Adum branch, Kumasi. The gravamen of plaintiff’s claim is that between August 2015 and January 2016, it entrusted its employee, Clement Quansah with a total sum of Ghc109,290.00, to be deposited in its account at defendant’s Adum branch in Kumasi. Deposit slips were issued to plaintiff as evidence of crediting the account. Plaintiff contended that sometime in January 2016, it noticed that it had not received the usual SMS text alerts from defendant for deposits made at the Adum Branch since August 2015, and a complaint was lodged with defendant. Investigations revealed that twenty-nine deposits meant for plaintiff’s accounts, were lodged into the personal account of the said Clement Quansah. The transactions involved four Tellers of Defendant’s Adum branch. Clement Quansah was subsequently arrested, prosecuted and sentenced to prison for fraud. The following particulars of negligence were pleaded at paragraph 12 of the statement of claim: a. Defendant through its Tellers, knew or ought to have known that it was under obligation to cross-check plaintiff’s name against plaintiff’s account number before crediting funds meant for plaintiff’s account. b. Defendant’s employees failed to cross-check plaintiff’s name against plaintiff’s account number on the pay-in deposit slip completed by Clement Quansah. c. As a result of such failure to cross-check plaintiff’s name against its account, defendant’s Tellers credited the wrong account (the personal account of Clement Quansah) with funds meant for plaintiff’s account. d. Whiles the original deposit slips contained details for Clement Quansah’s account, details on the duplicate deposit slip which plaintiff received contained plaintiff’s account details. e. Defendant credited Clemant Quansah’s account twenty-nine times with funds meant for plaintiff’s account from 31st August 2015 to 10th February 2016. f. Defendant after investigations revealed that four different tellers, at defendant’s Adum, Kumasi branch had been involved in crediting the wrong account with plaintiff’s money. It is the case of plaintiff that demands for recovery of the money from defendant went unheeded. Hence by a writ of summons issued out of the Registry of the Commercial Court Accra, plaintiff sued defendant seeking the following reliefs: I. A declaration that defendant’s Adum Kumasi branch has been negligent and defendant has consequently breached its contractual obligation to plaintiff when it credited the sum of GHc109,290 to the account of one Clement Quansah instead of plaintiff’s account. II. General damages for negligence, breach of contract, inconvenience and embarrassment in the sum of Ghc5,000,000.00). III. Recovery of the sum of Ghc109,290.00 with interest thereon from 31st August 2015 till date of final payment. IV. Costs Defendant denied liability and pleaded that plaintiff was vicariously liable for the conduct of its agent, Clement Quansah. And that once defendant’s employees were exonerated by the Police investigations, defendant could not be held liable for the loss. After an unsuccessful pre-trial conference, the following issues were set down for trial: I. Whether or not defendant’s staff were negligent in handling plaintiff’s funds meant to be deposited in plaintiff’s account. II. Whether or not defendant has breached its contractual and fiduciary obligations to plaintiff. III. Whether or not defendant’s conduct has caused financial loss to plaintiff. IV. Whether or not defendant’s conduct has caused embarrassment and inconvenience to plaintiff. V. Whether or not plaintiff is entitled to its claim. VI. Whether or not Clement Quansah, plaintiff’s employee or agent was a customer with a bonafide banking relationship with the defendant bank. VII. Whether or not the plaintiff was vicariously liable for the acts fo its employee, Clement Quansah. VIII. Whether or not plaintiff failed to exercise any or adequate diligence in the operation of its account with the defendant thereby allowing its employee, Clement Quansah to carry out his fraudulent activities. By judgment delivered on 12th of November 2019, the Commercial Court Division of the High Court Accra, entered judgment in favour of plaintiff for the reliefs endorsed on the writ of summons. The court held that defendant’s tellers were negligent in not scrutinizing the deposit forms before signing same, and ruled that plaintiff was not vicariously liable for the fraud committed by its employee. Dissatisfied and aggrieved by the judgment, defendant is by an Amended Notice of Appeal filed on 19th December 2019 with leave of court, seeking a reversal of the judgment under the following grounds of appeal: I. The court below erred in law when it declared that defendant/appellant breached its contractual obligations to plaintiff when it credited the sum of Ghc109,290,00 to the plaintiff/respondent’s (Clement Quansah’s) account, rather than plaintiff/respondent’s. PARTICULARS OF ERROR. There is no contractual term, express or implied, in banker/customer relationship that makes a banker liable for the criminal acts of a customer’s agent (employee) entrusted with funds by the customer to be deposited into the customer’s account with the bank. II. The court erred in law when it declared that defendant/appellant was negligent when it credited the sum of Gh109,290.00 to plaintiff/respondent’s employee’s (Clement Quansah) account, rather than plaintiff/respondent’s. PARTICULARS OF ERROR There is no duty, express or implied owed by a banker to a customer by which the banker is required to take reasonable care to ensure that a customer’s agent (employee) entrusted with the customer’s funds by the customer to be deposited in the customer’s account with the bank, does not act in such a manner that the bank’s customer is defrauded. III. The court below erred in law when it failed to find that plaintiff/respondent was contributorily negligent for the fraudulent acts of its employee. PARTICULARS OF ERROR a) The evidence before the court confirmed that plaintiff/respondent failed to notify defendant/appellant that it did not receive the requisite alerts (normally issued to defendant/appellants customers after each deposit) after plaintiff/respondent sent its employee to deposit its funds with defendant/appellant. b) Plaintiff/respondent also owed a duty to itself to take reasonable care to ensure that it did not suffer loss from the fraudulent acts of its employees such as promptly notifying defendant/appellant that it had not received the customary alert on each occasion that plaintiff entrusted its employee with funds to be deposited in plaintiff’s account with defendant/appellant IV. The court below erred when it found that plaintiff was not vicariously liable for the acts of its employee (Clement Quansah). PARTICULARS OF ERROR The court below misdirected itself with regards to the proper issue to be determined in so far as the criminal conduct of plaintiff/respondent’s employee (Clement Quansah) was concerned in relation to plaintiff/respondent’s duty to itself to take reasonable care that it does not suffer loss from the criminal conduct of its employees. V. The award of the sum of Ghc500,000.00 damages against defendant is excessive. VI. The award of the sum of Ghc300,000.00 as costs against defendant is excessive. VII. The judgment is against the weight of evidence. VIII. Further grounds of appeal would be filed upon receipt of the record of appeal. We must mention at this stage in the judgment that no additional grounds of appeal were filed. GROUNDS (i) and (ii) were argued together. The portion of the judgment of the trial court being assailed under grounds (i) and (ii) above, can be found at page 267 of the ROA. The trial judge delivered himself thus “A careful examination of plaintiff’s exhibit NMKB 1 series and for example at transactions dated 04/10/15 and 06/10/15, these slip dates can also be found in defendant’s exhibit 3. Aside the account names and account numbers which differ, every other detail is the same for the two exhibits, and hand writing is also the same. This points at nothing but negligence on the part of the defendant’s tellers who did a bad job at checking. They were under a duty to exercise reasonable care and skill as expected of any bank performing such duties. In fact, Clement Quansah could only have done what he did upon noticing the defendant’s tellers were not thorough in their scrutiny. Flowing from the foregoing, the fact of Clement Quansah also being a customer of the defendant is beside the point as that did not absolve the defendant from carrying out its required scrutiny of the slips the said Clement Quansah presented to its tellers. ………. I find from the forgoing that the defendant has been negligent in the handling of plaintiff’s funds lodged with it. Since the tellers were acting in their normal course of employment, I further find the defendant vicariously liable for their acts of omission and commission.” Particulars of error argued by counsel under the two grounds of appeal are that “There is no contractual term, express or implied, in banker/customer relationship that makes a banker liable for the criminal acts of a customer’s agent (employee) entrusted with funds by the customer to be deposited into the customer’s account with the bank.” And also that “There is no duty, express or implied owed by a banker to a customer by which the banker is required to take reasonable care to ensure that a customer’s agent (employee) entrusted with the customer’s funds by the customer to be deposited in the customer’s account with the bank, does not act in such a manner that the bank’s customer is defrauded.” In making a determination on these points of law, we are guided by the decision of this court in Oduro v Okyere [2014] 69 GMJ 105 CA (cited by counsel for plaintiff in his written submissions) that “Where an appellant complains that there is an error in law in the judgment, he is implying that the trial judge had misapplied or failed to appreciate or consider a particular law which if he had considered or properly applied and appreciated, would have changed the decision in his favour.………….” The onus is on plaintiff to demonstrate to this court, the alleged error. Counsel cited a plethora of cases on negligence and submitted that there was no evidence on record from which an inference can be drawn that at the time of the transaction, defendant knew or ought to have known that Clement Quansah (who was also a customer of the Bank), was not acting in his own stead but for the plaintiff. And that plaintiff failed to discharge the burden of proof. Counsel referred the court to the witness statement of defendant’s representative at pages 177 to 178 of the record of appeal (ROA) and also the deposit slips at page 182 thereof, and submitted that the deposits were received from and in favour of Clement Quansah after the latter had duly filled in original deposit slips covering the deposits. And that the amounts were credited to the account of the person named in the deposit slips. Counsel submitted further that it is a well-established principle of the law of tort that a person cannot be held liable in negligence where there was no duty of care. And that there was no duty of care, express or implied owed by the defendant to the plaintiff by which the defendant was required to take reasonable care to ensure that the plaintiff’s agent/employee entrusted with plaintiff’s funds, did not defraud plaintiff. Accordingly, defendant cannot be liable for the fraudulent acts of employees of its customers. Responding to the two grounds of appeal and the points of law raised, it was submitted on behalf of plaintiff that, to accede to defendant’s invitation was to absolve the Bank from liability for breaches in payments made by third parties for the benefit of its customer. The position of the law is that a defendant would only be liable in negligence if he is under a duty to take care. What constitutes duty of care was discussed in the celebrated case of Donoghue vrs Stevenson (1932) AC 562, 580, where Lord Atkin stated the neighbor principle as follows “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor.” It has been held that there must be sufficient proximity between the parties or, the situation must be one in which the court considers it fair, just and reasonable that the law should impose a duty of care of a given scope on one party for the benefit of the other. Negligence is defined in the 17th Edition of Winfield & Jolowicz on Tort as a breach of a legal duty to take care which results in damage to the claimant. It is defined in the English case of Blyth v Birmingham Waterworks Co (1856) 11 Ex 781 at 784, as the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. In Heaven v Pender (1883) 11 QBD 505, Brett MR delivered himself as follows “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 recognize that if he did not use ordinary care and skill in his own conduct with regard to those circumstances, he would cause danger of injury to the person or property of the other, a duty arises to use ordinary skill and avoid such danger.” It is also trite learning that a Bank must strictly comply with the mandate given by the customer in respect of its account. If the bank mistakenly pays the money on wrong mandate, it would be held liable for the loss. See Kelly vrs. Solari (1841)152 ER 24 at 26. See also Rowland v National West Bank [1978] 1 WLR 798 where it was held that “by entering into the banker/customer relationship, the bank agrees to act as the customer’s agent in banking transactions and to exercise the degree of care and skill expected of an agent.” In the more current case of Barclays Bank PLC V Quincecare ltd, [1992] 4 ALL ER 363, it was held that the Bank was an agent of the customer and that as an agent, the Bank owe fiduciary duties to the customer. In that case, the learned justices referred to Bowstead on Agency (15th Edition) pages 156 to 160 and continued thus “Prima facie every agent for reward is bound to exercise reasonable care and skill in carrying out the instructions of his principal: Bowstead p 144. There is no logical or sensible reason for holding that bankers are immune from such an elementary obligation. In my judgment, it is an implied term of the contract between the bank and the customer that the bank will observe reasonable skill and care in and about executing the customer’s orders.” We have read submissions by both counsel on the two grounds of the appeal, and in our view, the germane issue for our consideration is whether in carrying out the duty of receiving money for payment into a customer’s account, the banker owes a duty to the customer to ensure that the funds received are lodged into that customer’s specified account. We shall address the issue before us within the context of the law as hereinbefore discussed. We are further guided in this exercise by the principle that an appeal is by way of rehearing, see Akufo-Addo vs Catheline (1992) 1 GLR 377, accordingly, in addressing the issue, we shall review the entire evidence before us and make our own conclusions were necessary. It is in evidence that both the original and duplicate deposit slips, bore the signature and stamp of defendant’s Tellers. It is also in evidence that although the original deposit slip bore the name of Clement Quansah, the duplicate bore the name of the plaintiff and the funds were paid into the account of plaintiff’s employee, Clement Quansah. This state of affairs is clearly irregular, more so when evidence shows that both the original and the duplicate deposit slips were stamped and signed by defendant’s Tellers. We uphold submissions of learned counsel for plaintiff, that in carrying out the duty of receiving cash on behalf of its customer, the Banker owes a duty of care to its customer to ensure that the money received was lodged in the customer’s account by complying with due procedure. It goes without saying that it is the duty of the bank to act with skill and care to ensure that funds meant for its customer’s account are lodged into the specified account. It is in evidence that defendant’s representative identified the signatures and stamp on the duplicate copies of the deposit slip as those of Defendant’s Tellers. The testimony of defendant’s representative at pages 197 to 198 also shows that exhibits MNKB-1 SERIES were the duplicate copies of the pay slips which defendant’s tellers gave to Clement Quansah. It is also worth noting that testifying on exhibits NMKB 1 series, plaintiff’s representative told the court in cross examination that the information on the original deposit slip did not tally with information on the duplicate, particularly with respect to the name and account number. See pages 153 and 154 of the ROA. And that, when the Tellers were invited to the Police Station during the Police investigations, they all confirmed that the signatures and stamps on the duplicate were their true stamps and signatures. Defendant who contended that Police investigations revealed that Clement Quansah altered the deposit slips after they had been processed by the Tellers and the duplicate copy handed over to him, failed to produce evidence of the said Police Report to induce a favorable ruling on the issue. Plaintiff’s representative told the court that at the Police station, Clement Quansah explained in the presence of the four tellers, that he usually left the column on the duplicate, blank and that the tellers stamped and signed the slips without first checking. And that had the tellers followed the basic procedure of receiving money and crediting into the customer’s account, they would have averted the situation. This testimony remained unchallenged in cross examination. Cross examination of plaintiff’s representative on the issue continued at page 155 of the ROA as follows: Q The person who made these deposits the subject matter of this suit was Clement Quansah and his details appear on the original. That is correct. A That is correct. So you would expect naturally that Clement Quansah’s name should be that which should appear on the duplicate and if that had happened, he could not have brought it to the plaintiff as the evidence of the transaction meant for the plaintiff. In our respectful opinion, where the money received by the Bank was paid into an account not authorized by the customer, there is prima facie case of negligence. Plaintiff has discharged the burden imposed by section 15(2) of the Evidence Act, 1975, (Act 323), to the effect that “Unless and until it is shifted, the party claiming that a person did not exercise a requisite degree of care has the burden of persuasion on that issue.” The onus shifted to the Bank to produce evidence in rebuttal; a duty defendant failed to discharge. It is obvious from the evidence adduced at the trial that the failure of defendant’s staff to scrutinize both the original and duplicate slips, facilitated the perpetuation of the fraud. It is also significant to note that none of defendant’s four Tellers was presented to rebut plaintiff’s testimony. In the circumstances, where it is being alleged in defence, that Clement Quansah subsequently filled in the blank space in the duplicate, the only inference that can be drawn is that, the Tellers were negligent in failing to notice the blank space left by Clement Quansah; a conclusion which corroborates plaintiff’s testimony and confirms the court’s conclusion that defendant’s tellers failed to scrutinize the documents presented to them by Clement Quansah. It is for these reasons that we hold that the trial court’s finding of negligence is supported by the law and the evidence adduced at the trial, and shall not be disturbed. GROUND (III) is rehashed thus, “THE COURT BELOW ERRED IN LAW WHEN IT FAILED TO FIND THAT PLAINTIFF/RESPONDENT WAS CONTRIBUTORILY NEGLIGENT FOR THE FRAUDULENT ACTS OF ITS EMPLOYEE. This ground was argued under the following particulars of error (i) that “The evidence before the court confirmed that plaintiff/respondent failed to notify defendant that it did not receive the requisite alerts (normally issued to defendant’s customers after each deposit) after plaintiff sent its employee to deposit its funds with defendant; and (ii) that “Plaintiff/respondent also owed a duty to itself to take reasonable care to ensure that it did not suffer loss from the fraudulent acts of its employees such as promptly notifying defendant that it had not received the customary alert on each occasion that plaintiff entrusted its employee with funds to be deposited in plaintiff’s account with defendant.” Counsel referred us to the ruling at page 267 of the ROA and submitted that the issue “whether or not the plaintiff failed to exercise any or adequate diligence in the operation of its account with the defendant,” was raised by defendant as an issue for trial, but it was not included in the list of issues set down by the pre-trial judge for trial. And that the issue was raised suo motu and addressed by the trial judge in his judgment. It was submitted that the trial court however, wrongly applied the principles. Counsel invited us to rule on the issue of contributory negligence in favour of defendant although same was not specifically pleaded. Counsel referred us to a plethora of cases including Banahene v Shell Ghana limited (J4/34/2016) [2017] GHACA 36 (06/04/2017) which held that where an issue founded on negligence was not pleaded but evidence was admitted without objection, and the evidence is not rendered inadmissible on legal grounds, the court cannot ignore it, unless it would result in a miscarriage of justice. And that there was enough evidence on record in support of a defence of contributory negligence. On authority of Banahene (supra), counsel urged us not to ignore same. Responding to this ground of the appeal, it was submitted on behalf of plaintiff that to uphold counsel’s submissions that plaintiff was contributorily negligent, was to impose a duty on the customer of the Bank, and that such a duty is not grounded in law. Urging us to reject the plea, counsel forcefully argued that notwithstanding the existence of a Fraud Prevention Unit within defendant’s outfit, it was the vigilance of the plaintiff which led to the detection of the fraud. The submission on contributory negligence is grounded on the testimony of plaintiff’s representative in cross examination that, plaintiff stopped relying on the SMS alert because it was not working well and was unreliable. And that he directed the staff to file the deposit slips manually so that they could be used to check the transactions. It was submitted on behalf of the defendant that having decided not to rely on the SMS Alerts and to do a manual check of the deposit slips, plaintiff failed to diligently check to ensure that deposits shown on the deposit slips reflected in its accounts. Counsel referred the court to pages 144-146 of the ROA, paragraphs 7 to 9 of the statement of defence (at page 129 of the ROA), and plaintiff’s Reply to the statement of defence at page 134 of the ROA to demonstrate that even after the discovery of the fraud perpetrated by its employee Clement Quansah, plaintiff continued to use him to make deposits on its behalf. Counsel invited us to rule that the finding by the trial court that plaintiff exercised adequate diligence in the operations of its account, is not supported by the evidence and that the trial court wrongly applied the law. He implored us to rule that even if defendant was found liable in negligence, plaintiff was partly liable for the losses suffered. Contributory negligence is established when the evidence shows that plaintiff’s injuries were caused partly by the negligence of the defendant and partly by plaintiff’s own negligence. In other words, plaintiff’s negligence should have contributed to the incident/act complained of, and his lack of care should be a contributory factor to the damage suffered. Where contributory negligence is alleged, it is the duty of the court to interrogate whether a case of contributory negligence exists. If the enquiry reveals overwhelming evidence that the legal cause was partly the fault of the plaintiff the claim is established. In Hawkins v Ian Ross (Castings) ltd [1970] 1 All ER 180, it was held that “a person is guilty of contributory negligence if he ought reasonably to have foreseen that if he did not act as a reasonable prudent man, he might be hurt himself and in his reckonings he must take into account the possibility of others being careless.” In Davis v Swan Motor Co, [1949] 2 KB 291, where a man was injured riding in a dangerous position on the outside of a dust cart, it was held that he failed to take reasonable care of his own safety. Denning LJ posited at page 326 that two principal criteria of responsibility; causation and blameworthiness must be taken into account in making a determination of contributory negligence. The legal luminary stated, “Although those negligent acts were the cause of the collision, what was the cause of the damage to the deceased man? He was as the judge found, in a position which he must have known was a very dangerous position in defiance of the dictates of common sense. If he had not been in that position, he would not have been injured. His position was certainly one of the causes of the damage…..” In Kotiawusu v Goka [1992] 1 GLR 302 CA the Court of Appeal in its determination of contributory negligence, referred to the above pronouncement of Denning LJ in Davis v Swan Motor Co (supra) and held that the plaintiff’s want of care contributed to his injuries. From our research, the test is whether or not the act/event complained of was reasonably foreseeable. And whether the plaintiff acted reasonably in taking the risk leading to the accident/event. In effect, whether or not the plaintiff was contributorily negligent is a question of law and fact. Applying the law to the facts of the instant case, it is our considered opinion that it cannot by any stretch of imagination, be said that by failing to check its SMS messages, plaintiff was contributorily negligent. The purpose of the messages which was intended to keep the customer informed on transactions on its account, is not a substitute for defendant’s common law duty of care owed plaintiff. We have come to this conclusion because the SMS messages were sent to plaintiff after the conclusion of the transaction at the bank. Accordingly, there is no correlation between the two. Applying the causation and blameworthiness test espoused by Denning LJ in Swan case (supra) to the evidence adduced at the trial, we rule that there is no nexus between the SMS alert messages and defendant’s failure to scrutinize the deposit forms. The appeal fails on this ground also. Our attention was also drawn to statutory protection offered Banks under section 81 of the Bills of Exchange Act 1961 (Act 55). Under the heading “Protection to Collecting Bank” the section provides, “Where a banker in good faith and without negligence (a) receives payment for a customer of a cheque, whether crossed or uncrossed; or (b) having credited a customer’s account with the amount of such a cheque, receives payment thereof for himself; and the customer has no title or a defective title, to the cheque, the banker does not incur any liability to the true owner of the cheque by reason only of having received payment thereof.” Explaining “good faith” section 90 of the Act stipulates, “A thing is deemed to be done in good faith within the meaning of this Act where it is in fact done honestly whether it is done negligently or not.” Referring to this section of Act 55, it was submitted on behalf of defendant that, being himself a customer of defendant, there was no way the Tellers could have known that the funds deposited by Clement Quansah belonged to plaintiff and that the tellers acted in good faith. We have read the relevant sections of the Act and rule that given the fact that the instant case involved cash transactions, the Act does not apply. The section was intended to offer protection to bankers in transactions involving bills of exchange and other such instruments. The ruling in the Malaysian case of Leolaris Sdn Bhd v Bumiputra Commerce Bank Bhd [2013] 7 MLJ, drives home this point. In that case, the court referred to a pronouncement in the English case of Auchteroni & Co ltd v Midland Bank ltd [1928] All ER 627, and held that the requirement of good faith must have nexus with the payment out on the cheque or instrument. It was held that good faith envisages that the bank acted in accordance with prescribed procedure and with bona fides in honouring the cheque/instrument, such that it was in no way complicit in the act of forgery. The test requires the bank to prove as a prerequisite, that it acted in accordance with prescribed procedure and suggests that a lapse in the Banks procedure disentitles it to the defence under good faith. As earlier discussed, being a cash transaction, defence under section 81 of Act 55 does not avail defendant. Arguing GROUND (IV) of the appeal, it was submitted THAT THE COURT BELOW ERRED WHEN IT FOUND THAT PLAINTIFF WAS NOT VICARIOUSLY LIABLE FOR THE ACTS OF ITS EMPLOYEE (CLEMENT QUANSAH). The ground was argued under the following particulars of error; that “The court below misdirected itself with regards to the proper issue to be determined in so far as the criminal conduct of plaintiff’s employee (Clement Quansah) was concerned in relation to plaintiff’s duty to itself to take reasonable care that it does not suffer loss from the criminal conduct of its employees.” Vicarious liability is a legal doctrine that assigns liability for an injury to a person who did not cause the injury but who has a particular legal relation to the person who negligently caused the injury. The doctrine finds expression in the legal maxim, “He who acts through another, acts himself.” The master is not liable for his servant’s tort unless it fell within the course of the servant’s employment. The act, the performance of which led to the event/act or injury/wrong must be expressly or impliedly authorized by the employer, or incidental to something the servant was employed to do. See Ewudziwa v AG [1982-83] GLR 625. The authors of Winfield and Jolowicz on Tort explained the doctrine further when they stated at page 879 of their authoritative book that for vicarious liability to apply, the employer should stand in a certain relationship with the tortfeasor and the employee’s tort should be referable in a certain manner to that relationship. There must exist the relationship of master servant, or agent principal, and the tort must have been committed by the servant against the injured claimant, in the course of his employment. It must be emphasized that not every relationship of principal and agent creates vicarious responsibility in the principal for acts of the agent. If the relationship between the parties is that of two independent contractors, rather than employer-employee, the principal is generally not liable for the acts of the agent. The expression “In the course of employment”, requires that there must be correlation between the wrongful act and the employment. The claimant must demonstrate that the fraud happened during the time he was executing duties for the benefit of the employer or doing something related to those duties. He must be doing exactly those things for which the employer encouraged him to do, when the offence was committed. Explaining the course of employment at page 658 of Salmond on Torts 14th edition, the learned author stated that “a master is not responsible for the wrongful act done by his servant unless it is done in the course of his employment. It is deemed to be so done if it is either (1) a wrongful act authorized by the master or (2) a wrongful and unauthorized mode of doing some act authorized by the master. It is clear that the master is responsible for acts actually authorized by him; for liability would exist in the case even if the relation between the parties was merely one of agency and not one of service at all. But a master as opposed to the employer of an independent contractor, is liable even for acts which he has not authorized provided they are so connected with acts which he has authorized that they may rightly be regarded as modes – although improper mode – of doing them.” Expatiating on vicarious liability and scope of employment, in his book Winfred & Jolowicz on Tort (supra), the learned author stated at page 898 that, an act done may still be in the course of employment even if it was expressly forbidden by the employer. The prohibition by the employer of an act or class of acts will only protect him from liability which he would otherwise incur if it actually restricts what it is the servant is employed to do; the mere prohibition of a mode of performing the employment, is of no avail. The learned author noted that the question to address is “what was the job on which he was engaged for his employer.” In our local case of Attorney General v Dadey [1971] 1 GLR 228, the Court of Appeal ruled that the question whether or not an unauthorized act by a servant was within the scope of his employment or outside his employment was one of fact. And that the test is; was the employee doing something he was employed to do. If so, however improper the manner in which he was doing it, whether negligently or even fraudulently, the master was liable. Our understanding is that the act complained of, must be sufficiently work related, to attract vicarious liability. It has been submitted on behalf of defendant that the court below misdirected itself on the duty of the plaintiff to take reasonable care to ensure that it did not suffer loss from the criminal/fraudulent actions of its employees. Counsel argued that the question the trial judge was called upon to address was whether an employee authorized by his employer to make cash deposits into the business account of his employer was within his course of employment. And that, had the court properly directed itself on this issue, it would have found that Clement Quansah was acting in the course of his employment and as such his employer was vicariously liable for the fraud he committed. This proposition by counsel calls for a close examination of the doctrine of vicarious liability and when it is applicable. We shall start our discourse by addressing the reasons advanced by the trial court for rejecting the plea of vicarious liability. Addressing the issue “whether or not the plaintiff is vicariously liable for the acts of the employee, Clement Quansah,” the trial judge delivered himself at page 268 of the ROA as follows: “Clement Quansah was the employee of the plaintiff. From the evidence he has been convicted and sentenced by a criminal court. What he did in relation to the slip was criminal in nature. That act did not fall in the normal course of his employment with the plaintiff. Even though he was an employee at the time of the act, it was a crime he committed and that would not be acting in the course of his employment, consequently, I find the plaintiff not vicariously liable for the acts of Clement Quansah.” While affirming the conclusions of the trial court, we deem it necessary to comment on the reasons for the conclusions on two grounds: (1) the ruling that the employee was not acting within the course of his employment, because his acts were criminal in nature, is not a true statement of the law; (2) given the facts of the case, the doctrine of vicarious liability does not arise at all. The principle which emerges from a long line of decisions is that vicarious liability can extend to the fraudulent acts or omissions of a servant, if they occur in the course of his employment or within the scope of his authority. If the servant was conducting the business which he had a right to conduct, the employer/principal was liable, and it was irrelevant that the employee/agent acted with a dishonest purpose for his own benefit. In other words, the employer is not relieved of liability merely because the conduct of the employee is deemed fraudulent/criminal and was intended for his personal benefit. Whether or not the employer was liable for the act of its employee, depends on whether the said act was done in the course of his employment, and not whether it was criminal in nature. In our research on the subject, we came across several cases where employers were held liable for the fraud or crimes committed by their employees in the course of their employment. To mention a few, see Lloyd v Grace, Smith & Co [1912] AC 716 at 742, where the claimant, Mrs. Lloyd delivered the title deeds of her Cottages to the Managing Clerk of a firm of Solicitors, who defrauded her. The House of Lords unanimously held that an employer is liable for the fraud of its employee if that dishonesty or fraud occurred within the course of the employment. The court found the law firm liable because the Clerk was acting as the representative of the firm and they had invited the claimant to deal with him over her property. This position of the law was followed by the Court of Appeal in Morris v CW Martin & Sons ltd [1966] 1 QB 716. The plaintiff took her mink stole to the defendant for cleaning. An employee received and stole the fur. The trial judge held that the defendants were not liable because the theft was not committed in the course of employment. The decision was overturned on appeal, and the defendant was held liable on grounds that the employee converted the fur in the course of his employment. Referring to the principle enunciated in Lloyd v Grace (supra), Lord Diplock ruled “If the principle laid down in Lloyd v Grace Smith is applied to the facts of the case, the defendant cannot escape liability for the conversion of plaintiff’s fur by their servant. They accepted the fur as bailees for reward in order to clean it. They put Morrissey as their agent in their place to clean the fur and take charge of it………….. The manner in which he conducted himself in doing that work was to convert it. What he was doing, albeit dishonestly, he was doing it in the scope or course of his employment and defendant as his masters are responsible for his tortious act.” Considering the ruling of the trial court that the employer was not liable because of the criminal acts of the employee, we thought it particularly necessary to refer to Smith & Hogan on Criminal Law, for guidance on the issue. At page 140, the learned authors, posited that an employer is liable in tort for the actions of its servant committed in the course of his employment where the acts involve forgery, obtaining by deception, assault, and battery, manslaughter and so on. But observed that in none of these cases would the employer/master be criminally liable simply on the ground that the employee/servant was acting in the course of his employment. We rule that an employer is liable for the criminal acts of its servant committed in the course of his employment. Having said that, the question to address at this stage is whether the doctrine is applicable given the facts of this case. The question receives an answer in the negative because, applying the doctrine as discussed to the facts of the instant case, it is our respectful view that the facts do not fit into the mould of vicarious liability. A careful examination of the doctrine would reveal that a party cannot be vicariously liable to itself. It must be borne in mind that the rationale for the doctrine is that generally, victims sue employers for harm caused by their employees because the former has more money than the latter. Accordingly, where an employee injures a third party during the course of his employment, that third party is entitled under this doctrine to bring an action against the employer, and not the employee, for relief. In our research, we have not come across any law which makes an employer vicariously liable for injuries/damages suffered by reason of acts of its own employee in the course of employment. The reason is not farfetched, the employer/employee relationship is regulated by a contract of employment which avails the employer. A careful reading of all the cases cited by counsel for defendant, and those hereinbefore discussed on the subject, would reveal that the injured claimants are third parties, and not the employer/principal. Take for example, Lloyd v Grace v Smith & Co (supra) and Morris v CW Martin & Sons ltd (supra) where the court upheld the plea of vicarious liability, the victims were not the employers. Similarly, in the local case of Akortsu v State Insurance Corporation [1972] 2 GLR 22, (a judgment of the High Court, of persuasive force), it was held that where a servant, acting within the scope of his authority commits fraud against a third party, he fixes liability on his principal, even if the fraud was committed for the sole benefit of the servant. In this case also, the claimant was an injured third party. Concluding on this ground of the appeal, suffice it to say that in ascertaining whether or not the doctrine of vicarious liability is applicable, it is necessary to consider whether the injured person is a third party to the employer/employee relationship, and most importantly, whether the employee committed the tortious act, within the course of his employment. We rule that where, as in the instant case, the injured person is the employer himself, the doctrine does not apply. Vicarious liability is a tool in the hands of the injured third party against the employer, and does not avail a party who is not the injured or who has been found negligent as in the instant case. The appeal fails on this ground also. GROUNDS V & VI Submitting in grounds (v) and (vi) of the appeal that damages and costs awarded against defendant was excessive, counsel referred us to page 269 of the ROA where in entering judgment for plaintiff, the trial court awarded Ghc500,000.00 as damages, and costs of Ghc300,000.00 against defendant. By this ground of the appeal, defendant is calling upon us to interfere with the trial court’s assessment of damages. In considering this ground of the appeal, we are mindful of the caution in Societe Generale De Compensation v Moshie Ackerman [1972] GLR 413, holding 7 thereof, where this court reechoed the position of the law as earlier stated in Karam v Ashkar [1963] 1 GLR 38 as follows “An appellate court will generally only interfere with damages awarded by a trial court, if (a) either wrong principles of law were applied and (b) it can be shown that the assessment was so extremely high or so very low as to make it in the opinion of the appellate court, and entirely erroneous estimate of the damages to which plaintiff was entitled.” To induce a favourable ruling from this court, the onus is on defendant who is seeking our intervention, to bring his case within the ambit of any of principles hereinbefore cited. In discharging this duty, counsel for defendant drew our attention to the principles enunciated in the celebrated case of Hadley v Baxendale [1854] 9 Ex 341, and submitted that a claimant was to recover only losses which reasonably arose naturally from the breach or which were within the contemplation of the parties. And that “it was not reasonable under the circumstances for the parties to have foreseen that Clement Quansah would have acted fraudulently at the time of contracting.” Counsel also referred us to the Supreme Court cases of Karam v Ashkar (supra) and Delmas Agency ltd v Food Distributors International ltd [2007-2008] 2 SCGLR 748, and submitted that plaintiff was contributorily liable for the loss suffered and that it failed to mitigate its losses, and was only entitled to nominal damages if at all. On his part, counsel for plaintiff prayed that general damages awarded should not be disturbed. He referred the court to the injury sustained by plaintiff in running its business as a result of the negligence of the defendant, and drew the court’s attention to plaintiff’s prayer for general damages in the sum of five million Ghana cedis, endorsed on its writ of summons. On the issue of general damages, the trial court judge cited the case of Delmas Agency (supra), and delivered itself thus “From the forgoing having found there has been negligence leading to a breach of duty of care owed the plaintiff, it is obvious that some injury will ensue and must be compensated for.” The basic principle for the measure of damages is that there should be restitution in intergrum. The principle is that where an injury is to be compensated by damages, the claimant is entitled to that sum of money which will put him in the same position or as close to it as he would have been in if he had not sustained the injury. We have given careful consideration to submissions of both counsel under this ground of the appeal and applying the principles on award of damages and reviewing the evidence adduced at the trial, we observe that safe an assertion that plaintiff was entitled to compensation for injury suffered as a result of the breach of duty of care by defendant, no justifiable reason was advanced by the trial court for the award of the Ghc500,000.00. In the circumstances, we are in complete agreement with counsel for defendant that damages in the sum Ghc500,000.00 is indeed, excessive. It is also our view that having entered judgment for plaintiff for the recovery of the sum of Ghc109,290.00, plus interest thereon at the prevailing bank rate, from 31st of August 2015 till date of final payment, we rule that the award of damages in the sum of Ghc500,000.00, (which is far in excess of the amount recoverable), is unjustifiable in law; more particularly since punitive damages is not one of the reliefs sought and no evidence was adduced to support such an award. We are satisfied that the learned trial court wrongly execised his discretion in making the award. Appellant has sufficiently made a case for us to interfere with the exercise do the trial court’s discretion, which hereby do. We uphold the appeal on this ground and set aside the award of Ghc500,000 damages. It is our respectful view that in the circumstances, Ghc40,000.00 is adequate compensation. Award of costs under Order 74 (1) of the High Court (Civil Procedure) Rules, 2004 (CI 47) is at the discretion of the court. The rule provides “………. The cost of and incidental to proceedings in the court shall be at the discretion of the court, and the court shall have full power to determine by whom and to what extent the costs are to be paid.” The essence of awarding costs is provided under Order 74 rule 2(3) as follows: “Without prejudice to the powers and discretion of the court, an award of costs shall ordinarily be designed to a) Compensate for expenses reasonably incurred and court fees paid by the party in whose favour the award is made; and b) Provide reasonable remuneration for the lawyer of that party in respect of work done by the lawyer. Guidelines for assessing costs are set out in Rule 2(4) as follows: a) The amount of expenses including travel expenses, reasonably incurred by that party or that party’s lawyer or both in relation to the proceedings; b) The amount of court fees paid by that party or that party’s lawyer in relation to the proceedings; c) The length and complexity of the proceedings; d) The conduct of the parties and their lawyers during the proceedings; and e) Any previous order as to costs made in the proceedings. Apart from these guidelines, the Ghana Bar Association (GBA) also has a scale of fees intended to guide lawyers in charging fees. In the unreported case of Lexcom & Associates vrs Alhaji Yusuf Ibrahim, Pier Hotel Ltd And J. L Morrison Sons & Jones Ltd, the Court of Appeal noted that the scale of fees is a standard yardstick binding on all lawyers when they have to charge fees for different categories of services rendered to clients. My understanding is that the GBA scale of fees is not binding on the court. Where the court is called upon to determine costs payable, it will consider all the circumstances of the case as set out under the guidelines provided under Order 74 in coming to a conclusion. What constitutes reasonable remuneration for work done was discussed by the Court of Appeal in Bank of Ghana v Nyarko [1973] 2 GLR 265 where the court held that although costs was at the discretion of the court, it must bear a reasonable relation to the amount of work that the preparation and the conduct of the suit must have involved. The court ruled that costs must be reasonable and justifiable. In exercising its discretion, the court must take a number of factors into consideration, including the number of witnesses called, length of their evidence, adjournments, documents filed, length of the trial, whether there were complicated issues to be settled and whether there was a trial of any sort at all. The courts are directed to apply the rules and principles in the award of costs, on case by case basis taking into consideration the peculiar circumstances of each case and award costs as the justices of the case may determine. In GATCO Chempharam v Pharmadex Gh. Ltd. [1999-2000] 2 GLR 262 at 275, the Court of Appeal per Twumasi J. A noted that in awarding costs, the court must be fair to both parties. In addressing this ground, this court is guided by the principles hereinbefore discussed. We are also guided by the position of the law that the appellate court can only interfere where it is shown that discretion was wrongly exercised. Costs would also be set aside by the appellate court where it is shown that the award was manifestly excessive. See Borkloe v Nogbedzi [1982-83] GLR 1003 CA and also Bank of Ghana v Nyarko (supra). We have perused the ROA for any justification for the award of costs of Ghc300,000.00 and find none. It is significant to note that no reasons were given by the court for the award. The statement of claim was filed on 16th January 2017. Trial commenced on 24th of May 2018 and concluded on 27th of May 2019 and judgment was delivered on 12th of November 2019. There is also no evidence on record to show that plaintiff’s witnesses were outside the jurisdiction and travelled to Ghana at their own expense for the trial. Counsel also did not provide this court with any justification for the quantum of costs awarded. Applying principles hereinbefore discussed and with the authority of Borkloe v Nogbedzi as our guide, we uphold the submission of counsel for defendant that costs of Ghc300,000 awarded to the plaintiff was excessive and set same aside accordingly. Taking into consideration the the fact that only one witness was called by the plaintiff, we shall reduce cost to Ghc20,000.00. The final ground of appeal argued before us is the omnibus ground that the judgment is against the weight of evidence. The pith of submissions is that the trial judge did not give adequate consideration to or examine the entire evidence before him. And that had the trial judge meticulously reviewed the evidence adduced at the trial as borne out by the ROA, he could not have come to the conclusion he did. Counsel submitted further that the trial court’s conclusion is untenable, more so when plaintiff failed to prove beyond reasonable doubt that the forgery occurred after tellers had completed their duty of cross- checking. Safe to add to our discourse that counsel’s submission that the trial court ought to have found fraud, based on the criminal proceedings against Clement Quansah, does not detract from the duty of care owed by defendant to its customer, plaintiff herein, no new points of law were raised or discussed under this final ground of the appeal worth our consideration. In conclusion, it is our judgment that the findings and conclusions of the trial court are supported by the evidence on record and the law. Accordingly, safe for the reduction of general damages from Ghc500,000.00 to Ghc40,000 and costs from Ghc300,000.00 to Ghc20,000, the judgment of the trial court is sound and shall not be disturbed. We dismiss the appeal and affirm the judgment of the trial court. SGD NOVISI ARYENE (MRS) (JUSTICE OF APPEAL) CONCURRENT JUDGMENT BRIGHT MENSAH JA: I have had the benefit of reading the lead judgment of my noble sister, Novisi Aryene JA. Whilst I agree entirely with her analysis and evaluation of the evidence as well as the conclusions reached I nevertheless want to add a few words of my own on the award of costs. The lower court in the instant appeal after entering judgment for the plaintiff on his claim for Ghc102,290.00, allowed interest on the principal sum; awarded Ghc50,000.00 general damages and costs of Ghc300,00 in addition. The ground of appeal on the award of the costs is couched: “The award of the sum Ghc300,000.00 as costs against defendant is excessive.” An award of costs in every case is a call on a court to exercise a judicial discretion. Exercise of discretion is at large and depends on case-and-case basis. It is reiterated that there are no binding precedents in exercise of judicial discretion as each case has to be decided on its own merit provided that the judge or judicial officer took into consideration, all the necessary facts and circumstances of the case; the judge or the judicial officer was not biased or capricious or that he did not take into account extraneous matters. See: Agyeman v Ghana Rly & Ports Auth. (1969) CC 60 C/A. On the authorities, an appellate court cannot substitute its own discretion for the court exercising a discretion. Nevertheless, there may be circumstances justifying questioning the exercise of judicial discretion. The principles governing exercising judicial discretion and the power of an appellate court to interfere in the exercise of a court’s discretion were extensively considered in Sappor v Wigatap (2007-2008) SCGLR 676 wherein the Supreme Court set the perimeters of the rules as follows: “……….. [A]n appellate court would [only] interfere with the exercise of a court’s discretion where the court below applied wrong principles or the conclusions reached would work manifest injustice or that the discretion was exercised on wrong inadequate material. Arbitrary, capricious and un- informed conclusions stand in danger of being reversed on appeal.” Much earlier the Supreme Court speaking through a single judge, Crabbe JSC reiterated the grounds upon which an exercise of judicial discretion may be impeached to include: i) where it can be demonstrated that the judge or judicial officer violated the duty to be fair and candid; ii) where the discretion was exercised capriciously or arbitrary; iii) that the judge or judicial officer was biased either by resentment or prejudice; iii) the trial judge did not act in accordance with due process of law. See: R v Registrar of High Court; Exparte Attorney General (1982-83) GLR 407 @ 420 SC It bears emphasis that the award of costs in the High Court though discretionary, is regulated by Order 74 of the High Court (Civil Procedure) Rules, 2004, CI 47. Order 74 r 1(1) that gives the power to the court to award costs provides: (1) Subject to this Order, the costs of and incidental to proceedings in the Court shall be at the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid. In awarding costs, the court is guided by the following factors provided for in rule 2(3) & (4) of Order 74: (3) Without prejudice to the powers and discretion of the Court, an award of costs shall ordinarily be designed to (a) compensate for expenses reasonably incurred and court fees paid by the party in whose favour the award is made; and (b) provide reasonable remuneration for the lawyer of that party in respect of work done by the lawyer (4) In assessing the amount of costs to be awarded to any party, the Court may have regard to (a) the amount of expenses, including travel expenses, reasonably incurred by that party or that party's lawyer or both in relation to the proceedings; (b) the amount of court fees paid by that party or that party's lawyer in relation to the proceedings; (c) the length and complexity of the proceedings; (d) the conduct of the parties and their lawyers during the proceedings; and (e) any previous order as to costs made in the proceedings. In summary, therefore, costs are awarded incidental to trial and it is principally to compensate a successful party for expenses incurred. Every bit of expenses cannot be quantified. The court is therefore empowered to award costs, depending on the length of the trial, industry put in the case by the lawyers, among other factors as enumerated supra. It is worth repeating that award of costs is discretionary depending on the factors and merit of each case. The general rule, however, is that the discretion has to be exercised according to reason and practice. In SCOA Motors v Koranteng (1967) GLR 264 the court stated the law that: “…………It was an improper exercise of discretion to have made an order for costs in an amount which was the equivalent of the limit of the district court’s jurisdiction when the actual dam- ages awarded were nominal. Such costs were more in the nature of punishment to the unsuccessful party than recompense to the successful party.” Applying the principle posited herein to the instant appeal, it cannot be over-emphasized that the award of costs of Gh¢300,000.00 by the lower court was excessive and in the nature of punishment to the defendant/appellant. The primary claim in the case was for Gh¢109,290.00 which the lower court found for the plaintiff/respondent. Additionally, the court awarded interest thereon from 31st August 2015 till date of final payment. The ground of appeal is allowed. The award by the lower court is hereby set aside. In substitution therefor, we make an award of Gh¢20,000.00 as costs in favour of the plaintiff/respondent. SGD P. BRIGHT MENSAH (JUSTICE OF APPEAL) SGD SENYO DZAMEFE (JUSTICE OF APPEAL) I agree COUNSEL EMMANUEL BRIGHT ATOKOH FOR RESPONDENT MISS MARGARET OWUSU FOR APPELLANT 34