Legalpedia Citation: (2023-04) Legalpedia 75323 (CA)

In the Court of Appeal

Mon Apr 17, 2023

Suit Number: CA/L/366/2018

CORAM

MUHAMMED LAWAL SHUAIBU JCA

JOSEPH EYO EKANEM JCA

FOLASHADE AYODEJI OJO JCA

PARTIES

FIRST BANK OF NIGERIA LIMITED

APPELLANTS

PRISCILLA OGWEMOH

RESPONDENTS

AREA(S) OF LAW

APPEAL, BANKING LAW, CONSTITUTIONAL LAW, CONTRACT, EVIDENCE, PRACTICE AND PROCEDURE

 

SUMMARY OF FACTS

The respondent vide a letter dated February 6, 2008, (Exhibit “P12”) applied for a Margin Loan Facility from the appellant and the appellant offered the respondent a N20,000,000.00 margin loan which was accepted by the respondent by her letter dated February 20, 2008. The terms and conditions of the margin loan (Exhibit “P11”) is that the appellant availed the respondent the facility for the purchase of multi-scrip shares (that is, shares of different companies) namely Standard Alliance Assurance Ltd, Access Bank Plc and Equity Assurance Plc.

As required under the MLA (Exhibit “P11”) the respondent also provided certain units of Union Bank and Guaranty Trust Bank’s shares purchased with facility and shares deposited as the appellant’s 30% contribution pledged with appellant as security for the Facility granted under the MLA (Exhibit “P11”).

The respondent case at the lower Court, was that the appellant induced her to enter the MLA and that the appellant also breached the terms of the MLA which allegations, the appellant vehemently denied.

At the conclusion of the trial, the trial judge entered judgment for the plaintiff. Dissatisfied, the Appellant took his grievances to the Court of Appeal hence the instant appeal.

HELD

Appeal allowed

ISSUES

Ø Whether the lower Court was right when it held that it has jurisdiction to entertain the suit?

Ø Whether the lower Court was right when it held that the appellant breached the terms of the MLA and granted the reliefs sought by the respondent?

Ø Whether the trial Court erred when it found that the appellant misrepresented its skills and induced the respondent into signing the margin loan agreement which made her lose all her investments in the U-first product?

RATIONES DECIDENDI

JURISDICITION – JURISDICTION OF THE FEDERAL HIGH COURT

Section 251(1) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) delineates the jurisdiction of the Federal High Court and circumscribes the jurisdiction to eighteen items. These are the matters that are exclusively reserved for the Federal High Court. In MOBIL PRODUCING (NIG) UNLIMITED VS SUFFOLK PET. SERVICE LTD. (2020) 9 NWLR 9PT. 1728) 1 @ 18-19.

The Supreme Court was very emphatic that in the exercise of its exclusive jurisdiction, the Federal High Court can only orbit within the universe of the enumerated issue and others as may be conferred upon it by an Act of the National Assembly.

In an earlier decision of the Court in NDIC VS OKEM ENT. LTD (Supra), the apex Court while interpreting Section 251 (1) (d) of the Constitution aforesaid, has held that it will be unreasonable to read the proviso therein as totality denying jurisdiction to the Federal High Court in an area where the main paragraph (d) has already conferred jurisdiction. What the proviso has done was simply to remove “exclusively” of the Court’s jurisdiction in dispute between an individual customer and his bank in respect of transactions between individual customer and the bank. In otherwords, on matters of dispute between an individual customer and his bank, the Federal High Court has concurrent jurisdiction with the State High Court.

It was rightly posited that in determining whether a Court had jurisdiction in a matter or not, the Court will examine or consider the nature of the plaintiff claim as disclosed in his writ of summons and the statement of claim. In the case of AVIATION LOGISTIC & MANAGEMENT LTD VS UNITED BANK FOR AFRICA CAPITAL PLC & ORS (2018) LPELR-44790 (CA), this Court opines that when issue of jurisdiction is raised, it is the claim of the claimant as endorsed on the writ or statement of claim that must be looked at and in so doing, the defence of the defendant, no matter how strong, is of no moment. However, it is sometimes necessary for the Court to hear some evidence first for the purpose of determining the issue of jurisdiction. – Per M. L. Shuaibu, JCA

JURISDICTION – HOW JURISDICTION COULD BE DETERMINED

The reason for the lower Court for also relying on the exhibit already admitted i.e. Exhibit “P11” is not farfetched. The jurisdictional challenge was only raised at the close of the trial and it is my view that in such circumstance, the issue of jurisdiction could be determined both on the pleadings and evidence led. – Per M. L. Shuaibu, JCA

THE BUSINESS OF BANKING – THE BUSINESS OF BANKING DEFINED

Now the key issue is whether the respondent’s claim as endorsed in the writ of summons and the statement of claim falls within the jurisdiction of the lower Court. Put differently, is the respondent’s claim connected with or pertains to banking and/or a banker/customer relationship? The business of banking, as defined by law and custom, consists in the issue of note payable on demand intended to circulate as money when the banks are banks of issue, in receiving deposits payable on demand, in discounting commercial paper, making loans of money on collateral security, buying and selling bill of exchange, negotiating loans, and dealing in negotiable securities issued by Government, State and National and Municipal and other Corporation. – Per M. L. Shuaibu, JCA

BANKING TRANSACTION – WHAT CONSTITUTES A BANKING TRANSACTION

The plank of the appellant’s complaint is that the respondent’s action did not arise out of its banker/customer relationship because same was hinged on breach of margin loan agreement and that the respondent was induced into signing the agreement by appellant’s misrepresentation. However, holistic examination of the respondent’s claim as well as the reliefs sought before the lower Court leaves no one in doubt that the respondent is the customer of the appellant, a bank. And that the appellant sold a package “U-First Product” to the respondent, a customer which culminated into the execution of the margin loan agreement Exhibit “P11”. Thus, the dispute arose as a result of that relationship and was consummated based on banker/customer relationship.

In S.B.N. LTD. VS DE LLUCH (Supra), the Supreme Court has held that in its tenor and intendment, Section 251 (1) (d) of the 1999 Constitution embraces all possible conceivable matters touching on banking, whether on issue of tort or contract. That being the position, the conclusion reached by the learned trial judge to the effect that since the appellant granted loan facility to the respondent to purchase shares, the transaction clearly shows banker/customer relationship, and thus a banking transaction can hardly be faulted. – Per M. L. Shuaibu, JCA

 

FRAUDULENT MISREPRESENTATION – MEANING OF FRAUDULENT REPRESENTATION

The term fraudulent misrepresentation or representation connotes, a false statement that is known to be false or is made recklessly without knowing or caring whether it is true or false and that it is intended to induce a party, to detrimentally rely on it. See IKPA V. STATE (2018) 4 NWLR (PT. 1609) 174 @ 208.

Furthermore, the law compels a party that grounds his case on misrepresentation to supply particulars with dates and items where necessary. And for a party who pegs his claim on fraudulent misrepresentation to succeed, he must prove its elements and the representation must be a statement of existing fact, the representation must be material and unambiguous and the representee must show that he/she acted in reliance on the representation. See AFEGBAI V. A.G EDO STATE (2001) 14 NWLR (PT.976) 270. – Per M. L. Shuaibu, JCA

 

BURDEN OF PROOF – BURDEN OF PROOF WHEN CRIME IS ALLEGED IN A CIVIL MATTER

It is elementary that the burden of proof in a civil case is on the party who will lose if no evidence is adduced at all.

And by virtue of Section 135 (1) of the Evidence Act, 2011, if the commission of a crime by a party to any proceeding, civil or criminal, it must be proved beyond reasonable doubt. – Per M. L. Shuaibu, JCA

 

COURTS – CONDUCT OF THE COURTS IN RELATION TO CONTRACTS BETWEEN PARTIES

Parties to an agreement retain the commercial freedom to determine their own terms. Where there is a contract regulating an agreement between the parties, the main duty of the Court is to interprete the contract, to give effect to the wishes of the parties as expressed therein. See NIKA FISHING LTD VS LAVINA CORP. (2008) 16 NWLR (PT.1114) 509. It is also settled that Courts cannot re-write, import into or export out of a contract any term or condition which, the parties did not in their agreement state to be part of what they intended. O.H.M. VS APUGO & SONS LTD (1990) 1 NWLR (PT.192) 652, OLATUNDE VS OBAFEMI AWOLOWO UNIVERSITY (1998) 5 NWLR (PT. 549) 178 and VITAL INVESTMENT LIMITED VS CAP PLC (2022) 4 NWLR (PT.1829) 205.

Before interrogating the pertinent clauses of Exhibit “P11” dealing with the supposably the obligation to monitor the respondent’s investment and making margin call, it is also pertinent to note that in construing the provisions of statute and by necessary implication, a document, where words are clear and unambiguous, it is the words used that prevail and not what the Court says the provision means, unless where giving a literal interpretation might lead to absurdity. See MOBIL OIL (NIG) LD VS FEDERAL BOARD OF INLAND REVENUE (1977) 3 SC 53. – Per M. L. Shuaibu, JCA

 

EXTRINSIC EVIDENCE – EXTRINSIC EVIDENCE CANNOT VARY/CONTRADICT THE TERMS OF WRITTEN DOCUMENTS

I have earlier held the view that the issue of the appellant’s skills and expertise as a condition precedent for entering the margin loan facility was not engraved in the agreement and it is trite that extrinsic evidence is not allowed to add to, vary or subtract from or contradict the terms of written document. – Per M. L. Shuaibu, JCA

EXTRINSIC EVIDENCE – EFFECT OF EXTRINSIC EVIDENCE WHEN TERMS OF CONTRACT ARE REDUCED INTO WRITING

Parties are bound by the terms of their contract and if any dispute should arise with respect to the contract, the terms of the written document which constitutes their contract are invariably the guide to resolving the dispute. See ABC Transport Co. Ltd v Omotoye (2019) 14 NWLR (Pt. 1692) 197, 213.

Furthermore, when the terms of a contract are reduced into writing, extrinsic evidence is inadmissible to add to, vary, subtract from or contradict the terms. See Egharevba v Osagie (2009) 18 NWLR (Pt. 1183) 299, 310 and Awala v NITEL Plc (2019) 15 NWLR (Pt. 1695) 372, 395. – Per J. E. Ekanem, JCA

 

BURDEN OF PROOF – BURDEN OF PROOF WHEN FRAUD IS ALLEGED IN A CIVIL/CRIMINAL PROCEEDING

…the allegation of fraudulent misrepresentation made against the Appellant is criminal in nature which requires proof beyond reasonable doubt. See MOHAMMED VS. WAMMAKO (2018) 7 NWLR (PT. 1619) 573, SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED VS. OLAREWAJU (2008) LPELR-3046(SC), ODOFIN VS. ONI (2001) LPELR-2226(SC).

In TRADE BANK PLC VS. PHARMATEK INDUSTRIAL PROECTS LIMITED (2020) 8 NWLR (PT. 1725) 124 AT 159, PARAGRAPHS F-H, the Supreme Court, per Kekere-Ekun, JSC held as follows:

“My Lords, the law is settled that where a party alleges fraud, in any proceedings, civil or criminal, not only must the particulars be specifically pleaded, the allegation must be proved beyond reasonable doubt. The burden of proof is on he who makes the allegation. See Otukpo v. John & Anor (2012) 7 NWLR (Pt. 1299) 357, Agi v. P.D.P. (2017) 17 NWLR (Pt. 1595) 386, Ikpeazu v. Otti (2016) 8 NWLR (Pt. 1513) 38; Section 135 of the Evidence Act.” – Per F. A. Ojo, JCA

 

CASES CITED

STATUTES REFERRED TO

1.  Constitution of the Federal Republic of Nigeria 1999 (as amended)
2. Bank and Other Financial Institution Act
3. Evidence Act, 2011

CLICK HERE TO READ FULL JUDGMENT