Legalpedia Citation: (2025-04) Legalpedia 51030 (CA)

In the Court of Appeal

Wed Apr 9, 2025

Suit Number: CA/G/61/2023

CORAM

Ali Abubakar Babandi Gumel Justice of the Court of Appeal

Ugochukwu Anthony Ogakwu Justice of the Court of Appeal

Mohammed Danjuma Justice of the Court of Appeal

PARTIES

ALL STATES TRUST BANK PLC (IN LIQUIDATION)

APPELLANTS

BIU COMMUNITY BANK LIMITED

RESPONDENTS

AREA(S) OF LAW

ALL STATES TRUST BANK PLC (IN LIQUIDATION) v. BIU COMMUNITY BANK LIMITED CA/G/61/2023 (In the Court of Appeal, Gombe Judicial Division) On Wednesday, April 09, 2025

SUMMARY OF FACTS

This case stemmed from a banker-customer relationship between the parties. The Respondent (Biu Community Bank Limited) maintained Account Number AC2505000152 (later changed to 0251201000116) with the Appellant (All States Trust Bank PLC) and conducted banking transactions based on instructions and mandate given to the Appellant. The Appellant subsequently became distressed, was wound up, and the Nigeria Deposit Insurance Corporation became its statutory liquidator.

In discharging its functions as liquidator, the NDIC wrote to the Respondent demanding payment of an alleged debt of N16.03 million. The Respondent contested this indebtedness. After a reconciliation of accounts, the demand was reduced to N10.9 million.

The Respondent continued to dispute the debt and claimed that the reconciliation exercise actually revealed unauthorized withdrawals and payments from its account amounting to N39.07 million. Contending that the Appellant had breached the contract, fiduciary relationship, and duty of care arising from their banker-customer relationship, the Respondent (with leave of court) instituted proceedings at the Federal High Court, Maiduguri Judicial Division.

The Respondent sought declarations that the unauthorized withdrawals and payments constituted breach of contract and fiduciary duty, and an order for payment of the sum of N39,073,711.52. In response, the Appellant filed a counterclaim for the sum of N10,913,388.52, being the amount it claimed the Respondent was indebted to it from an overdraft facility, with interest and an order for foreclosure of legal mortgage if payment was not made.

After a full trial, the lower court held that the Respondent had proved its case, granted the reliefs sought, and dismissed the Appellant’s counterclaim. Dissatisfied, the Appellant appealed to the Court of Appeal.

HELD

  1. The appeal was dismissed for lacking merit.
  2. The Court held that the Respondent properly pleaded its case and the Appellant was not misled as to the gravamina et postulata (grievances and demands) of the Respondent.
  3. The Court found that the Appellant’s relationship with the Respondent was that of banker and customer, which imposed a duty of care and fiduciary obligations on the Appellant.
  4. The Court upheld the lower court’s finding that the Appellant failed in its duty by allowing funds to be withdrawn from the Respondent’s account contrary to the mandate, thus constituting breach of contract and fiduciary duty.
  5. The Court affirmed that Exhibits N and R5, along with the testimony of the Appellant’s witness (DW1), amounted to admission of double debits, unauthorized debits, and wrong interest charges on the Respondent’s account.
  6. The Court rejected the Appellant’s contention that the lower court did not consider its counterclaim, finding that the lower court had duly considered and evaluated all evidence before arriving at its decision.
  7. The Court ordered the Appellant to pay costs of the appeal assessed at N500,000.00.

ISSUES

  1. Whether the trial Court was right to have granted the Respondent’s claim for N39,073,711.52 when the Respondent failed to specifically plead same with material particulars in its pleadings especially as circumstances leading to the said debt bothers on fraud?
  2. Whether the trial Court was right to have relied on Exhibit N and R5 to make a finding of admission of unauthorized debits, double debits and wrong interest charges on the Respondent’s account?
  3. Whether the trial Court was right to have dismissed the Appellant’s Counter-Claim without considering it on the merit and whether same does not constitute a breach of the Appellant’s right to Fair Hearing?
  4. Whether the trial Court’s judgment is not against the weight of evidence in the light of the Appellant’s oral and documentary evidence placed before the Court and whether same did not occasion miscarriage of justice?

RATIONES DECIDENDI

BANKER-CUSTOMER RELATIONSHIP — DUTIES AND OBLIGATIONS OF A BANKER

The banker/customer relationship between the Appellant and the Respondent imposed certain duties and obligations on the Appellant for which it would be answerable where it fails in the performance of the said duties and the performance of the said obligations. Most importantly, the bank must be prudent and act in a satisfactory manner in the discharge of its contractual obligations to its customer. I restate that the lower Court held on the evidence on record that the Appellant was not prudent and did not act in a satisfactory manner in the way it allowed withdrawals to be made from the Respondent’s account in a manner contrary to the mandate. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

DUTY OF CARE — BANKER’S DUTY TO EXERCISE REASONABLE CARE

Without a doubt, a banker has the duty to exercise reasonable care and skill regarding its customer’s affairs. The law is that a bank has a duty under its contract with its customer to exercise reasonable care and skill in carrying out its part regarding the operations within its contracts with its customer. The duty to exercise reasonable care and skill extends over the whole range of banking business within the contract with the customer and includes interpreting, ascertaining, and acting in accordance with the instruction of the customer.– Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

BREACH OF DUTY — CIRCUMSTANCES CONSTITUTING BREACH OF BANKER’S DUTY

In circumstances where it has been alleged that a bank was in breach of its fiduciary duty and duty of care, as in this case, the circumstances must be such that establishes that the bank was not prudent or did not act in a satisfactory manner, in which case there would have been a breach of contract, since a prudent banker will never ignore the instruction given by the customer. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

TRUST AND CONFIDENCE — BASIS OF BANKER-CUSTOMER RELATIONSHIP

The banker/customer relationship is one rooted in trust and confidence. This is the only reason a person would entrust his hard-earned money to a bank in the belief that the money would be safe, properly managed and available on demand. It is on account of this that a fiduciary relationship exists between the bank and the customer, and the bank therefore owes the customer a duty to exercise a high standard of care in the management and control of the customer’s money, arising from the contractual relationship between them.– Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

OBJECT OF PLEADINGS — PURPOSE OF PLEADINGS IN LITIGATION

The Appellant has rightly restated that the object of pleadings is to give the adverse party notice of the case he is to meet. See ISHENO vs. JULIUS BERGER PLC (2008) LPELR (1544) 1 at 24, OREDOYIN vs. AROWOLO (1989) LPELR (2756) 1 at 60-61 and A-G ABIA STATE vs. A-G FEDERATION (2022) LPELR (57010) 1 at 66-68. However, such a general restatement of the law is merely platitudinal; it must be demonstrated that the Respondent’s pleadings did not comply with the aim, purpose, and object of pleadings.” – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

ADMISSION — EFFECT OF ADMISSION AGAINST INTEREST

The law remains that facts admitted need no further proof. BUNGE vs. GOV. RIVERS STATE (2006) 12 NWLR (PT 995) 573 at 600, AJIBULU vs. AJAYI (2013) LPELR (21860) 1 at 19-20, BRONWEN ENERGY TRADING LTD vs. OAN OVERSEAS AGENCY NIGERIA LTD (2022) LPELR (57306) 1 at 51 and ALADUM vs. OGBU (2023) LPELR (59995) 1 at 18. With the said admission against interest, the lower Court justifiably found in favour of the Respondent against the Appellant.” – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

WITHHOLDING EVIDENCE — PRESUMPTION AGAINST PARTY WITHHOLDING EVIDENCE

The Appellant having failed to avail the Respondent with all the documents by which the withdrawals were made, and which as the banker were in its custody, cannot be heard to contend that the amount claimed was not proved as it will amount to the Appellant benefitting from its adjudged wrong and which the lower Court rightly held that it amounted to withholding evidence.– Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

BENEFITTING FROM WRONGDOING — PROHIBITION AGAINST BENEFITTING FROM OWN WRONG

By the principles of equity, a person cannot be allowed to benefit from his own wrong. In the discharge of its adjudicatory functions, the Court is under the bounden duty to prevent injustice and avoid rendering a decision that would enable a party to escape from his obligation, evade the just desserts, or otherwise profit from his own wrongful act. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

FAIR HEARING — LIMITATION ON APPLICATION OF FAIR HEARING PRINCIPLE

The doctrine of fair hearing requires that a party must be given the opportunity to put forward his case fully and freely and to call all witnesses and tender all documents necessary for his case for a fair and just decision to be reached in the matter. The Appellant was afforded this opportunity, and it fully utilised the same at the lower Court. There is no basis on which deprivation of the right to fair hearing can be raised on the diacritical facts of this matter. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

JUDGMENT INTERPRETATION — PROPER APPROACH TO READING A JUDGMENT

Let me hasten to state that the judgment of a Court is to be taken as a single decision. It is not read in instalments convenient to the party who is complaining against the judgment. In the same way, the appellate Court will not take the paragraphs or pages of the judgment in isolation or quarantine, neither will it allow an appellant to read the judgment in convenient instalments in order to underrate or run down the judgment. The whole judgment must be taken together as a single decision of the Court. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

FINDINGS OF FACT — APPELLATE COURT’S APPROACH TO TRIAL COURT’S FINDINGS

The primary duty of the Judge at nisi prius is perception of evidence, evaluation of evidence and ascription of probative value thereto by making the requisite findings of facts which entails both perception and evaluation. GUARDIAN NEWSPAPER LTD vs. AJEH (2011) 10 NWLR (PT 1255) 574 at 592, WACHUKWU vs. OWUNWANNE (2011) LPELR (3466) 1 at 50-51 and ONI vs. JOHNSON (2015) LPELR (24545) 1 at 26-27. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

BURDEN OF PROOF ON APPEAL — APPELLANT’S DUTY TO PROVE TRIAL COURT’S ERROR

The onus is on an appellant to satisfy the appellate Court that the decision on appeal is wrong. Where this is not done, the decision appealed against will be allowed to stand. MACAULAY vs. TUKURU (1881-1911) 1 NLR 35 at 40, AKINLOYE vs. EYIYOLA (1968) NMLR 92 at 95, OBISANYA vs. NWOKO (1974) 6 SC 69 at 80, WOLUCHEM vs. GUDI (1981) 5 SC 291 at 326-330 and OBODO vs. OGBA (1987) 1 NSCC (VOL. 18) 416 at 421. – Per UGOCHUKWU ANTHONY OGAKWU, J.C.A.

BREACH OF CONTRACT BY BANK — LIABILITY FOR UNAUTHORIZED TRANSACTIONS

Consequently, Appellant having made payment and withdrawal from the account of the Respondent with it upon the unauthorized signatures or authorization of the Respondent, the Appellant is liable in breach of contract and therefore liable for the loss incurred by the Respondent. In the case of FIRST BANK V. ORONSAYE (2019) LPELR 47205 (CA), this Court held that: ‘The contractual relationship imposes a duty of care on the bank the breach of which impose on the bank liability of negligence.’– Per MOHAMMED DANJUMA, J.C.A.

CASES CITED

STATUTES REFERRED TO

  1. Evidence Act, 2011, Section 20
  2. Evidence Act, 2011, Section 167(d)
  3. Constitution of the Federal Republic of Nigeria, 1999 (as amended)

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