The scenario involves a claim of negligent advice by a branch manager, Serwaa Broni, leading to financial loss for a customer, Kwame Kumchacha. As an expert in Ghanaian banking law with over 20 years in compliance and risk management at banks like GCB Bank, I will analyze the legal issues and the bank’s potential liability, drawing from relevant laws such as the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930), principles of negligence under common law, and vicarious liability. The analysis is structured for clarity, emphasizing practical implications in Ghana’s banking sector post-2017 cleanup, where governance and customer protection are paramount.

Key Legal Issues for the Bank:

1. Nature of the Banker-Customer Relationship and Duty of Care (5 Marks):
   • The banker-customer relationship is primarily contractual, governed by the account opening mandate and implied duties under common law. Under Act 930, banks owe a duty of confidentiality and reasonable care in operations (e.g., Section 24 on licensing and public information), but this does not typically extend to investment advice unless the bank positions itself as a financial advisor.
   • Here, Serwaa Broni’s advice on purchasing the house goes beyond standard banking services (e.g., account management or payments). In Ghana, as in common law jurisdictions, banks may owe a duty of care for advice if it creates a special relationship, per the principle in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 (adapted in Ghanaian cases like those before the Supreme Court). The issue is whether the advice was given in the bank’s official capacity or as personal opinion. Practically, in Ghanaian banks, managers are trained under BoG’s Corporate Governance Directive 2018 to avoid unsolicited advice to prevent such liabilities, especially post-UT Bank collapse due to poor governance.
2. Negligent Misstatement or Misrepresentation (5 Marks):
   • The claim centers on negligent misstatement: Serwaa assured the property was a good buy and that the bank would lease it. For liability, Kumchacha must prove: (i) a duty of care existed (proximity and foreseeability of harm); (ii) breach (advice was careless, e.g., no due diligence on property value); (iii) causation (loss directly from reliance); and (iv) damage (GHS 2.5 million loss).
   • In Ghana, under the Torts Act (as applied in cases like those in the High Court), illiterate customers like Kumchacha may receive heightened protection, but reliance must be reasonable. The assurance about leasing ties to bank operations, but if unauthorized, it may not bind the bank. Real-world example: During the 2017-2019 banking cleanup, similar unauthorized commitments led to losses, prompting BoG to enforce stricter internal controls.
3. Vicarious Liability of the Bank (5 Marks):
   • If Serwaa acted in the course of employment, the bank is vicariously liable under common law principles (e.g., Lister v Hesley Hall Ltd [2001] UKHL 22, applied in Ghana). As branch manager, advising on transactions (even to regularize Kofi Brokeman’s overdraft) appears within scope, especially since payment was through the bank.
   • However, if the advice was ultra vires (beyond authority), the bank may argue it’s not liable, per Section 35 of Act 930 on governance. Pressure from head office to regularize overdrafts is common in Ghana (e.g., under BoG’s Capital Requirements Directive), but it doesn’t justify misleading customers. Practically, banks like Ecobank Ghana mitigate this via compliance training.
4. Conflict of Interest and Fiduciary Duties (3 Marks):
   • Serwaa’s motivation (helping Kofi Brokeman) suggests a conflict, breaching fiduciary-like duties under common law and BoG’s directives (e.g., Cyber and Information Security Directive 2020 on ethical conduct). This could expose the bank to regulatory penalties from BoG, beyond civil claims.
5. Defenses and Mitigation (2 Marks):
   • The bank could defend by arguing no duty for investment advice, contributory negligence (Kumchacha should have sought independent valuation), or that the loss stems from economic hardships (post-DDEP 2022-2024 effects on property markets in Ghana). Practically, settle out-of-court to avoid reputational damage, as seen in post-cleanup disputes.

Is the Bank Liable for Mr. Kumchacha’s Losses? (5 Marks – Conclusion):

• Likely yes, on vicarious liability grounds, as Serwaa acted in her managerial role. However, liability may be partial if reliance was unreasonable. The bank should investigate internally (per BoG guidelines), respond within 10 days denying full liability but offering mediation, and reinforce policies to prevent recurrence. In practice, Ghanaian courts (e.g., in similar High Court cases) favor customers in such scenarios for consumer protection, aligning with sustainable banking principles. Total potential exposure: GHS 2.5 million plus costs, but mitigated via insurance or settlement.