MANOR CONCESSIONS LTD & ANOR V GUARANTY TRUST BANK PLC

CORAM

PARTIES

1. MANOR CONCESSIONS LTD.2. MAFENI NORBERT APPELLANTS

RESPONDENTS

AREA(S) OF LAW

SUMMARY OF FACTS

The 1st Appellant a company operates a Corporate/Business Current Account with the Respondent a bank. While the 2nd Appellant, a businessman and the Managing Director of the 1st Appellant Company, maintained his own current account No. 7206923110 with the Respondent bank at the same branch office. In 2004, the 1st Appellant entered into a contract with one of its customer, a Messrs. Distributed Powers Systems for the supply of a quantity of 10,000 metric tons of Automobile Gas Oil (10,000 MT of A.G.O.). The 1st Appellant Company made arrangement with a Messrs.’ Cheyne Petroleum to deliver the product. Access Bank Plc. agreed with 1st Appellant Company to partly finance the supply contract with credit facility of N 33,450,000.00, a banker’s cheque/draft for the sum of N33, 450,000.00 on 07-05-04 was issued. The Respondent bank did not honor the banker’s Cheque/draft on the premise that the police had written her to withhold or stay action on the operation of the 1st Appellant’s account pending the result of criminal investigation involving alleged fraudulent acts of the Appellants with respect to operation of the said account. Consequently, the Appellant lost the contract for non performance on the part of the 1st Appellant Company which resulted to a loss of the profit she would have realized from the transaction. The 2nd Appellant who also issued a cheque for the sum of N20,000 on his business account with the Respondent bank in favour of one Ajayi Taiwo was also dishonoured upon presentation when there was sufficient funds the account hence the Appellants sued the Respondent bank at the court below claiming the sum of N81, 480,000.00 for loss of profit together with interest thereon from the alleged wrongful dishonor of the said cheque/draft procured by the 1st Appellant Company from the Access bank; while the 2nd Appellant claimed the sum of N5 million general damages together with interest thereon for injury to his credit and business reputation resulting from the alleged wrongful dishonor of the cheque. The trial Court dismissed the action on the grounds that the interposition of the order from the police to temporarily suspend the operation of the 1st Appellant Company’s business/corporate current account pending police investigation of alleged fraudulent acts of the Appellants affecting the account entitled the Respondent bank to stop the 1st Appellant Company from withdrawing the funds in question at the material time; and that the 2nd Appellant did not prove that the cheque was actually presented at the counter and wrongfully dishonoured by the Respondent bank. Not satisfied with the judgment of the court, the Appellant appealed to the Court of Appeal, and the Respondent also Cross Appeal.

HELD

Appeal Allowed.

ISSUES

Whether the learned trial judge was right in law in holding that the respondent acted rightly in complying with the orders of the Nigerian police to stop the withdrawal of funds on the draft no. 96566 purchased by the 1st appellant and any other withdrawal on the account of the 1st appellant pending conclusion of investigation into alleged fraudulent activities of the appellants – grounds 1, 2 & 5. Whether the learned trial judge was right in law in dismissing the appellants’ claims when there was uncontradicted oral and documentary evidence that the 1st appellant suffered a loss of n81,480,000.00 as a direct consequence of the unlawful act of the respondent in refusing to honor the said bank draft no. 96566 purchased by the 1st appellant – ground 7.? Whether the learned trial judge was right in law in holding that there was no evidence that exhibit 11, which was a Cheque issued by the 2nd appellant was presented for payment at the respondent/bank when there was unchallenged and uncontradicted that the said Cheque was presented by Taiwo Ajayi for payment on 7th may 2004 at the Awolowo road, Ikoyi, Lagos branch of the respondent/bank – ground 3. Whether the learned trial judge was right in law in holding that even if exhibit 11 was presented for payment, the cheque could not have been given value by the respondent because of the order of the Nigerian police to stop all transactions on the appellants’ account – ground 4. Whether the learned trial judge was right in law in holding that even if exhibit 11 was presented for payment, the Cheque could not have been given value by the respondent because of the order of the Nigerian police to stop all transactions on the appellants’ account – ground Whether the learned trial judge was right in law in failing to award damages in favor of the 2nd appellant for wrongful dishonor of exhibit 11 by the Respondent. CROSS APPEAL Whether given the evidence elicited through the cross examination of the 1st Appellant, the learned trial Judge was right in holding that the cross appellant abandoned his defence