FIRST CITY MONUMENT BANK LIMITED V YUSUF SABITU

Legalpedia Citation: (2025-06) Legalpedia 87660 (CA)

In the Court of Appeal

Holden at Abuja

Fri Jun 13, 2025

Suit Number: CA/ABJ/CV/677/2023

CORAM

Joseph Olubunmi Kayode Oyewole-Justice of the Court of Appeal

Okon Efreti Abang-Justice of the Court of Appeal

Ishaq Mohammed Sani-Justice of the Court of Appeal

PARTIES

FIRST CITY MONUMENT BANK LIMITED

APPELLANTS

YUSUF SABITU

RESPONDENTS

AREA(S) OF LAW

AREAS OF LAW: BANKING LAW, CONTRACT LAW, DAMAGES, FIDUCIARY DUTY, CONSTITUTIONAL LAW, PROPERTY RIGHTS, EXEMPLARY DAMAGES, SPECIAL DAMAGES, LITIGATION COSTS, BANKER-CUSTOMER RELATIONSHIP, EVIDENCE LAW

SUMMARY OF FACTS

The Respondent, a customer of the Appellant bank (First City Monument Bank Limited), discovered that his account was restricted and he was unable to operate it from 2nd February, 2022. Efforts to get the Appellant to lift the restriction failed. The Respondent approached the High Court of FCT via originating summons seeking a declaration that the bank’s action was unlawful and unconstitutional, an order lifting the restriction, and damages totaling N30 million (N20 million exemplary damages and N10 million general damages), plus N1,605,000 as litigation costs.

The Appellant filed a counter-affidavit claiming it had traced proceeds of fraud to the Respondent’s account and argued the action was an abuse of process due to a pending Lagos High Court action. The trial court was unimpressed with the bank’s defense and gave judgment for the Respondent, awarding him N5 million as exemplary damages and N1,605,000 as litigation costs, while ordering the restriction to be lifted. The restriction had lasted for 393 days before it was lifted following the court judgment.

HELD

The appeal partially succeeded.
The Court upheld the award of N5 million as exemplary damages, finding it justified given the bank’s unilateral and high-handed restriction of the customer’s account without court order.
The Court set aside the award of N1,605,000 as litigation costs, holding that the Respondent failed to provide evidence of actual payment of the claimed solicitor’s fees.
The Court emphasized that banker-customer relationships are both contractual and fiduciary, with banks owing duties of care to customers.
The Court criticized the bank’s “arrogant display of power without any regard for the rule of law.”
Parties were to bear their respective costs.

ISSUES

Whether or not the trial Court was right to have awarded the excessive sum of N5,000,000.00 (Five Million Naira) as exemplary damages against the Appellant when there is no evidence to show before the trial Court that the Respondent is entitled to same. (Distilled from ground 1)?
Whether or not the trial Court was right in its award of the sum of N1,605,000.00 (One million, six hundred and five thousand Naira) as cost of litigation against the Appellant. (Distilled from ground 2)?

RATIONES DECIDENDI

UNCHALLENGED FINDINGS – EFFECT OF NOT APPEALING:

“In the two grounds of appeal herein, the Appellant is challenging the award of damages and cost thereby leaving all the findings of the lower Court which preceded the awards intact. The implication of this is that the unchallenged findings are deemed accepted.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

BANKING CONDUCT – ARROGANT DISPLAY OF POWER:

“All these point to an arrogant
display of power without any regard for the rule of law. It is highly
condemnable and cannot be justified under any excuse.” – Per JOSEPH
OLUBUNMI KAYODE OYEWOLE, J.C.A.

EXEMPLARY DAMAGES – CRITERIA FOR AWARD:

“The Court will award exemplary damages where a Defendant’s action has been malicious, cruel and extremely high handed just as in the present instance.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

BANKER-CUSTOMER RELATIONSHIP – FIDUCIARY NATURE:

“This submission fails to take proper cognizance of a banker customer relationship which although contractual puts the banker in a fiduciary relationship with the customer to whom it owes a duty of care.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

BANK’S UNILATERAL ACTION – JUDICIAL RESPONSE:

“Where the banker in disregard of due process, takes the law into its hands to unilaterally impede the due operation of the customer’s account, the Court will not hesitate to come down hard against such a banker.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

LITIGATION COSTS – EVOLUTION OF LAW:

“The position that cost of legal services incurred by a successful litigant cannot be recovered is no longer the position of the law.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

SOLICITOR’S FEES – REQUIREMENTS FOR RECOVERY:

“The principle of law is that a successful party is entitled to be indemnified for costs of litigation which includes charges incurred by the parties in the prosecution of their cases. It is akin to claim for special damages. Once the solicitor’s fee is pleaded and the amount is not unreasonable and it is provable, usually by receipts, such a claim can be maintainable in favour of the claimant.” – Per AKOMOLAFE-WILSON, JCA in NAUDE & ORS VS SIMON

COSTS CLASSIFICATION – TWO CATEGORIES:

“It is abundantly clear from the foregoing that costs fall into two broad species, namely the necessary expenses in the proceedings made by a party and costs in terms of the litigant’s ‘time and efficient in coming to Court.’ The former category includes filing fees, and solicitor’s fees. This category belongs to the realm akin to special damages. They are easily ascertainable by producing, for instance receipts.” – Per EJEMBI EKO, JCA in LONESTAR DRILLING NIG. LTD. V. NEW GENESIS EXECUTIVE SECURITY LTD

SOLICITOR’S FEES – REASONABLE COMPENSATION PRINCIPLE:

“Under Nigeria laws expenses incurred on services of counsel are reasonably compensated, thus costs will be awarded on the ordinary principle of genuine and reasonable out of pocket expenses and normal counsel cost is usually awarded for a leader and one or two juniors.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

PROOF OF PAYMENT – REQUIREMENT FOR RECOVERY:

“The position of the law that this head of claim can only succeed where it is shown to have been expended via evidence such as payment receipts was reinforced in AJIBOLA VS ANISERE & ANOR and KLM ROYAL DUTCH AIRLINES VS IDEHEN.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

FAILURE TO PROVE PAYMENT – CONSEQUENCES:

“The Respondent did not adduce any evidence that he paid the claimed solicitor’s fees and cannot therefore justify its award as incurred expenses. This award must accordingly be set aside.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.

MODERN PRACTICE – INCLUSION OF SOLICITOR’S FEES:

“In more recent times, it is common for solicitors to include their fees for prosecution of cases and pass same to the other party as part of claims for damages, which have been awarded by the Courts once the claims are proved.” – Per NAUDE & ORS VS SIMON

EXEMPLARY DAMAGES – JUSTIFICATION IN BANKING CASES:

“I therefore see no justifiable basis to interfere with the award of exemplary damages made by the lower Court in this instance and I resolve the issue against the Appellant and in favour of the Respondent.” – Per JOSEPH OLUBUNMI KAYODE OYEWOLE, J.C.A.