Legalpedia Citation: (2024-04) Legalpedia 54978 (CA)

In the Court of Appeal

Holden at Abuja

Fri Apr 12, 2024

Suit Number: CA/A/122/2018

CORAM

Joseph Olubunmi Kayode Oyewole Justice of the Court of Appeal

Abba Bello Mohammed Justice of the Court of Appeal

Peter Chudi Obiorah Justice of the Court of Appeal

PARTIES

1.MEAK INVESTMENT LIMITED

2. ABEL ABIA-BASSEY

APPELLANTS

KEYSTONE BANK PLC (FORMERLY PLATINUM HABIB BANK PLC)

RESPONDENTS

AREA(S) OF LAW

SUMMARY OF FACTS

However, the Respondent did not execute the sale as instructed. The Respondent claimed that the Appellants had subsequently applied for a rollover of the overdraft and requested an increase to N5,000,000.00, still using the same share certificates as collateral. The Respondent granted this request, thereby invalidating the initial instruction to sell the shares.

As a result, the 1st Appellant initiated legal action against the Respondent, seeking a declaration that the Respondent was negligent in failing to comply with the instructions of March 18, 2008, in accordance with standard banking practices. The Appellant authorized the Respondent to sell the shares used as collateral for the overdraft facility.

After the hearing, the lower court dismissed both the claim and counterclaim of the parties. Dissatisfied with this decision, the Appellants filed an appeal with this Court via a Notice of Appeal containing three grounds of appeal. The Respondent, with the Court’s permission, filed a notice of cross-appeal containing two grounds of appeal.

HELD

Appeal dismissed

Cross-Appeal allowed

ISSUES

 Whether the learned trial Court was right to hold the respondent not negligent?

 Whether the Honourable Court was right to have held the appellants to be in possession of the share certificates?

 Whether the Honourable trial Court properly evaluated the evidence presented by the parties?

 Whether or not the trial Court was right to dismiss the counter-claim of the cross-appellant for failure to prove the counter-claim? (Cross-Appeal)

RATIONES DECIDENDI

NEGLIGENCE – MEANING OF NEGLIGENCE

The question now is whether the non-compliance by the Respondent with the instruction of the Appellants to sell the shares is negligence for which it will be liable in damages to the Appellants?

In Diamond Bank Ltd v. Partnership Investment Co. Ltd & Anor (2009) LPELR-939(SC) at page 18 paras. C, Ogbuagu, JSC intoned:

“What is Negligence? In Black’s Law Dictionary, 8th Edition at pages 1062 to 1063, twenty eight (28) types or categories of negligence, are stated therein. At page 1061 thereof, negligence is generally defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation; any conduct that falls below the legal standard established to protect others against unreasonable risk of harm, except for conduct that is intentionally, wantonly, or wilfully disregardful of others’ rights.”

Furthermore, in Hamza v. Kure (2010) LPELR-1351(SC) at pages 14-15 paras. F – B, the Supreme Court speaking through Muhammad, JSC held that:

“As far back as 1856, Lord Alderson B., defined negligence to be the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. See BLYTH V. BIRMINGHAM WATERWORKS COMPANY. [1856] 11 Exch. 781 at 784. It may consist in omitting to do something which ought to be done or in doing something which ought to be done either in a different manner or not at all. Where any of the situations happens, then liability will accrue against the defendant. Before the accrual of liability, however, the basic requirement of the law is that the defendant must owe a duty of care to the plaintiff. Where there is no such notional duty to exercise, negligence will have no legs to stand and any claim premised thereon will fail.” – Per P. C. Obiorah, JCA

NEGLIGENCE – MEANING OF NEGLIGENCE

…Drawing inspiration from the above lucid authorities and in simple form, negligence is the failure or omission to do something which a reasonable man, guided by considerations which ordinarily regulates the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do and which causes harm or damages to another person. See Donoghue v. Stevenson (1932) AC 562 at 580; Okwejiminor v. Gbakeji & Anor (2008) LPELR-2537(SC); Abusomwan v. Merchantile Bank of Nigeria Ltd. (1987) 3 NWLR (Pt. 60) 196 at 198; Anyah v. Imo Concorde Hotels Ltd (2002) LPELR-512(SC); Ojo v. Gharoro & Ors (2006) LPELR-2383(SC) and Universal Trust Bank of Nigeria v. Ozoemena (2007) LPELR-3414(SC). – Per P. C. Obiorah, JCA

NEGLIGENCE – BURDEN OF PROOF IN A CLAIM FOR NEGLIGENCE

The law therefore places a burden on the plaintiff to prove that the defendant was negligent. In so doing, the plaintiff is expected to prove three essential ingredients as follows:

1. That the defendant owed him a duty of care;
2. That the duty of care was breached; and
3. That the plaintiff suffered damages arising from the breach.

It is the responsibility of the Appellants, as plaintiffs, to prove the above ingredients based on balance of probability and/or preponderance of evidence with cogent evidence as to the specific act or acts of the defendant which resulted in the negligence and not merely on conjecture and speculation or half-truths or concealment of facts. – Per P. C. Obiorah, JCA

NEGLIGENCE – ESSENTIAL INGREDIENTS FOR THE TORT NEGLIGENCE

The law therefore places a burden on the plaintiff to prove that the defendant was negligent. In so doing, the plaintiff is expected to prove three essential ingredients as follows:

1. That the defendant owed him a duty of care;
2. That the duty of care was breached; and
3. That the plaintiff suffered damages arising from the breach.

It is the responsibility of the Appellants, as plaintiffs, to prove the above ingredients based on balance of probability and/or preponderance of evidence with cogent evidence as to the specific act or acts of the defendant which resulted in the negligence and not merely on conjecture and speculation or half-truths or concealment of facts. – Per P. C. Obiorah, JCA

INTEREST – WHETHER A BANK IS ENTITLED TO CHARGE INTEREST ON A LOAN

It is trite law that a bank is entitled to charge interest on any loan until the credit facility granted the customer is liquidated. See Asikpo v. Access Bank PLC (2015) LPELR-25845; UBN Ltd. v. Salami (1998) 3 NWLR (PT 543), (1998) LPELR-6189 (CA) and UBN PLC v. Ajabule & Anor (2011) LPELR-8239(SC). – Per P. C. Obiorah, JCA

INTEREST – WHETHER THE BANK IS ENTITLED TO CHARGE REASONABLE INTEREST WHERE THERE IS NO AGREEMENT AS TO RATE OF INTEREST

Even where there is no express agreement as to rate of interest, the bank is still entitled to charge reasonable interest on the basis of established custom that a bank is a profit making commercial venture and not a charitable organization. See Barclays Bank of Nigeria Ltd v. Alhaji Maiwada Abubakar (1977)10 SC.13. Agbabiaka v. First Bank (2019) LPELR-48125(SC). – Per P. C. Obiorah, JCA

INTEREST – DUTY OF BANKS TO PROVE RATE OF INTEREST WHERE SAME IS NOT SPELT OUT IN A CONTRACT /AGREEMENT

However, where the bank interest is the subject of litigation as in the instant case, it behoves on the bank to plead and lead evidence on the rate or other facts that will enable the Court to see how it arrived at the amount claimed as simple or compound interest. It cannot be sufficient for the bank to name any figure or amount of money and proclaim it as compound interest. The law is that he who asserts must prove as enshrined in Sections 131, 132 and 133 of the Evidence Act, 2011.

In the case of Veepee Industries Ltd v. Cocoa Industries Ltd (2008) LPELR-3461(SC) at page 20 paras. C-D, Muhammad, JSC held that:

“Rate of interest of any bank cannot be treated with levity or uncertainty. Speculation will not help to arrive at the exact bank rate. Thus, any claim on a rate of interest, except where concrete agreement between the parties is owned up by them or where there is positive and unequivocal admission by a party, that rate of interest has to be proved by admissible evidence.”

Continuing at page 21 paras. F-G, the learned Jurist stated:

“I consider essential that the rate of interest charged from time to time and the type of interest, whether simple or compound, should be disclosed by admissible evidence to make it possible for the Court to ascertain and verify the correctness of the charges on account of interest and, consequently, the correctness of the total amount claimed in the writ of summons.” – Per P. C. Obiorah, JCA

ADMISSION – WHETHER A FACT ADMITTED NEEDS TO BE PROVED

It is trite law that a crucial fact which is admitted needs no proof and same would be taken as established. See Agbanelo v. U.B.N. Ltd(2000) 7 NWLR (Pt. 666) 534 549 and Adusei & Anor v. Adebayo (2012) LPELR-7844(SC). – Per P. C. Obiorah, JCA

STANDARD OF PROOF – STANDARD OF PROOF IN CIVIL PROCEEDINGS

Civil cases are determined on preponderance of evidence with the imaginary scale tilting in favour of the party with the more credible evidence see ELIAS VS OMO-BARE 1982 5 SC. 25. – Per J. O. K. Oyewole, JCA

NEGLIGENCE – AN ESSENTIAL PRE-REQUISITE FOR SUCCESS IN A CLAIM OF NEGLIGENCE

It is trite that in an action founded on the allegation of negligence, the proof of breach of a duty of care owed the claimant is an essential pre-requisite to its success. See U.T.B. v OZOEMENA (2007) LPELR-3414(SC) at 13 – 14. paras. G – C: and A.B.C. (TRANSPORT CO.) LTD v OMOTOYE (2019) LPELR-47829(SC) at 23. paras. A C. – Per A. B. Mohammed, JCA

ADMISSION – WHETHER THE RESPONDENT IS ENTITLED TO RELY ON AN ADMISSION BY THE APPELLANTS

This, is a clear admission against interest on the part of the Appellants which the Respondent is entitled to rely on to defeat the Appellants’ case. See ABALAKA v AKINSETE & ORS (2023) LPELR.60349(SC) at 25 – 27. paras. F – B: and KAMALU & ORS v UMUNNA & ORS (1997) LPELR-1657 (SC) at 27. paras. C— F. – Per A. B. Mohammed, JCA

CASES CITED

STATUTES REFERRED TO

1. Evidence Act, 2011
2. Court of Appeal Act
   

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