Bank Of The North Limited v. Central Bank Of Nigeria (1972)
LawGlobal-Hub Lead Judgment Report
LEWIS, J.S.C.
In Suit No. LD/634/68 the plaintiffs’ amended particulars of claim read:-
“The plaintiff’s claim against the defendant is for 88,800pounds with interest thereon at 4 per cent per annum from the 2nd February, 1968 to judgment or alternatively for a declaration that the defendant is not entitled to debit the plaintiff’s account with the said sum of 88,800pounds which is due and owing to the plaintiff.”,
and paragraphs 3-7 of the statement of claim read:-
“3. By a confidential directive to the plaintiff dated the 23rd December, 1967 the defendant notified the plaintiff that all currency notes issued by the defendant for the years 1959 and 1965 received by the plaintiff before the 23rd January, 1968 and paid into the defendant before the 30th January, 1968 would be treated as legal tender for the purposes of crediting the plaintiff’s account with the defendant or exchange of new notes to the plaintiff by the defendant.
- Paragraph 7 of the defendant’s said letter stated:-
‘The legal status of the 1959 and 1965 issues of notes will be withdrawn with effect from the close of banking business on the 22nd January, 1968 and deposits or exchanges of the old notes will cease. However, the Central Bank will continue to accept deposits and undertake exchanges of the old notes for Banks up to the close of business on the 29th January, 1968. These deposits and exchanges will be limited to notes received by the Banks on or before the 22nd January, 1968. No deposits/exchanges of notes will be accepted from or undertaken for Banks by the Central Bank or its agents after the close of business on the 29th January, 1968.’
- At all material times the plaintiff maintained a current banking account with the defendant and between the 23rd January, and the 26th January, 1968 the plaintiff paid into its account with the defendant currency notes issued in 1959 and 1965 to the value of 88,800ponds in accordance with the said letter.
- All the said currency notes had been received by the plaintiff before the close of banking business on the 22nd January, 1968.
- The defendant duly credited the said plaintiff’s banking account with said payments, but on the 2nd February, 1968 without the plaintiff’s authority debited the plaintiff’s said account with the sum of 89 ,049pounds 5s-d of which 88,800pound had been received by the plaintiff as aforesaid.”,and paragraphs 11-14 of the statement of defence read:-
“11. As regards paragraph 5 of the statement of claim the defendant Central Bank agrees that plaintiff’s bank maintained a current banking account with the defendant Central Bank and that between 23rd January, 1968 and the 26th January, 1968 the plaintiff’s bank paid into its account with the defendant Central Bank currency notes issued in 1959 and 1965 to the value of 88,800ponds, but denied that the said payments were made in accordance with the directive of the special circular letter aforementioned in paragraph 6 herein which letter contained the directive from the defendant Central Bank to banks in the Federation to make such payment or payments and on the basis of which the issuance was to be made.
- In particular the defendant Central Bank denies that the said currency notes now in dispute between the parties were received by the plaintiff-bank after the aforementioned date and not in or before the said date.
- The defendant Central Bank originally credited the plaintiff-bank’s account with the said payments, but says that such credit was made under a mistake of fact which mistake of fact was induced and made by the plaintiff-bank not disclosing to or informing the defendant Central Bank of the true and actual dates of receipt by it of the said old currency notes now in dispute between the parties. and the defendant Central Bank states further thereon that in accordance with banking practice the banker does not have or need to seek the customer’s authority before debiting the latter’s account with any money mistakenly credited in the relevant customer’s account.
- The plaintiff’s bank did not submit any return or returns in respect of the said sum of 88,900pounds now in dispute in the manner contained in a directive to all banks in the Federation made and issued on 23rd December, 1967 by the defendant Central Bank with respect to exchanges or deposits of 550pounds and over and in particular with respect to signing and completing particulars of such transactions and returning the forms each day.”
On the 10th October, 1969, Sowemimo J., after a very full and careful review of the evidence, found that the plaintiffs had not established either of their claims and accordingly dismissed the action with 75 guineas costs tto the defendants.
The plaintiffs have now appealed to this Court and Mr. Impey on their behalf first argued together grounds of appeal that read:-
“(1) The learned trial judge erred in failing to consider, deal with or answer the plaintiffs’ contention that in any event the defendants were under the obligation to redeem all the old currency notes forming the subject matter of the plaintiffs’ claim upon demand and that by reason of sections 21 and 23 of the Central Bank of Nigeria Act, Cap. 30 the plaintiffs must be entitled to the relief claimed.
(2) The learned trial judge erred in failing to consider the effect of the admissions by the defendants’ witnesses that none of the said old currency notes were lost stolen mutilated or imperfect.”
Mr. Impey started by referring us to sections 21 and 23 of the Central Bank of Nigeria Act (Cap. 30 of the Laws of the Federation of Nigeria and Lagos, 1958) which read:-
“21. (1) Notes issued by the Bank shall be legal tender in Nigeria at their face value for the payment of any amount.
(2) Coins issued by the Bank shall, if such coins have not been tampered with, be legal tender in Nigeria at their face value up to an amount not exceeding ten pounds in the case of coins of denominations of not less than sixpence and up to an amount not exceeding one shilling in the case of coins of a lower denomination.
(3) Notwithstanding the provisions of subsections (1) and (2) the Bank shall have power, on giving not less than three month’s notice in the Gazette, to call in any of its notes and coins on payment of the face value thereof and any such notes or coins with respect to which a notice has been given under this clause shall, on the expiration of the notice, cease to be legal tender, but, subject to the provisions of section 23, shall be redeemed by the bank upon demand.”
“23. No person shall be entitled to recover from the Bank the value of any lost, stolen, mutilated or imperfect note or coin. The circumstances in which, and the conditions and limitations subject to which, the value of lost, stolen, mutilated or imperfect notes or coins may be refunded as of grace shall be within the absolute discretion of the Bank.”
He then submitted that reliance was never placed on section 23 in the pleadings by the defendants and that anyway not only was it not proved that the notes which the plaintiffs paid into their account with the defendants were “stolen, mutilated or imperfect notes” but there were in fact clear admissions to the contrary. He therefore relied in particular on the provisions of section 21 (3) that even if notice was given in calling in notes so that they ceased to be legal tender they would still be redeemable by the Central Bank. He further submitted that the position was not altered by the Central Bank (Currency Conversion) Decree, 1967 (Decree No. 51 of 1967) section 1 of which reads:-
“1. (1) Where any existing currency is altered by the Central Bank, the Commissioner for Finance shall cause to be published in die Gazette and in such other manner as he may direct or require, notice fixing a date (in this Decree hereafter referred to as “the conversion date”) after which all currency then issued and mentioned in the notice shall cease to be legal tender in Nigeria; but currency which is of the class or classes mentioned in the notice and is issued, held or in circulation in Nigeria immediately before the conversion date shall be replaced by the new currency to the equivalent value pursuant to this Decree:-
(a) If presented to the Central Bank by any person not more than 19 days after the conversion date, or
(b) if thereafter within a further period of 14 days (but no further) the Governor of that Bank approves an application for conversion as a special case.
(2) In the application of subsection (1) any provision of the Central Bank of Nigeria Act inconsistent therewith shall be read subject to this subsection.
(3) Currency not in accordance with the altered shape and design which is held outside Nigeria by any person shall, on and after the conversion date, be accepted for exchange with new currency under this Decree only with the approval of the Governor of the Central Bank of Nigeria given generally, or subject to such terms as he may think fit to impose, after consultation with the Commissioner for Finance.”
Moreover, section 1(2) according to him showed that it was only provisions inconsistent with the Central Bank of Nigeria Act that must be read subject to the Decree and, in his submission, none were here, as nowhere in section 1 of Decree No. 51 of 1967 was it stated that old notes were not redeemable, only that new currency would replace old currency in certain circumstances. He further relied on the well-established principle enunciated in Halsbury’s Laws of England, Third Edition, Volume 36, paragraph 627 which reads:-
“627. Unless it is clearly and unambiguously intended to do so, a statute should not be construed so as to interfere with or prejudice, established private rights under contracts or the title to property, or so as to deprive a man of his property without his having an opportunity of being heard. In particular, an intention to take away property without giving a legal right to compensation for the loss of it is not to be imputed to the legislature, unless that intention is expressed in unequivocal terms.”,
and on Metropolitan Asylum District v. Hill (1881) 6 A.C. 193 where lord Blackburn at page 208 said:-
“It is clear that the burden lies on those who seek to establish that the Legislature intended to take away the private rights of individuals, to show that by express words, or by necessary implication, such an intention appears. There are not express words in this Act, and I think the weight of argument is rather against than in favour of such an implication.”
Finally, on these grounds of appeal, he argued that though section 1(1)(a) of Decree No. 51 of 1967 did not apply to the facts of this case, section 1(1)(b) did. He however submitted that paragraph 7 of exhibit A issued by the defendants and which reads:-
“7. Legal Tender Status of Existing Notes:-
The legal tender status of the 1959 and 1965 issues of notes will be withdrawn with effect from the close of banking business on 22nd January, 1968 and deposits or exchanges of the old notes should no longer be accepted or undertaken from the commencement of banking business on the 23rd January, 1968 as from which day the liability of the Central Bank to redeem the old notes will cease. However, the Central Bank will continue to accept deposits, and undertake exchanges, of the old notes for banks up to the close of business on 29th January, 1968. These deposits and exchanges will be limited to notes received by the banks on or before 22nd January, 1968.
No deposits/exchanges of notes will be accepted from, or undertaken for, banks by the Central Bank or its agents after the close of business on 29th January, 1968.”, was inaccurate as by the Currency Conversion (Substituted Date) Notice 1968, the 3rd January, 1968 was fixed as the currency conversion date under section 1(1) of Decree No. 51 of 1967 so that as from that date, not the 22nd January, 1968 as stated in paragraph 7 of exhibit A, the old notes ceased to be legal tender but otherwise, in his submission, the plaintiffs had complied with the requirements of exhibit A.
Now, in our view it is clear that though Mr. Impey is right that Decree No. 51 of 1967 does not mention the redemption of old notes such as is provided for in section 21(3) of the Central Bank of Nigeria Act, it is precisely that which by implication is contemplated when it is providing that in special circumstances under section 1(1)(b) of Decree No. 51 of 1967 old currency may be replaced by new currency within the period of 14 days from the expiry of the 19 days mentioned in section 1(1)(a) of that Decree, that is to say within 14 days after the 22nd January, 1968 in the present case. As section 1(2) of Decree No. 51 of 1967 specifically provides that inconsistent provisions of the Central Bank of Nigeria Act must be read subject to Decree No. 51 of 1967 we think section 21(3) of the Act (Cap. 30) must be read subject to the provisions of the Decree as to how new currency may be issued in place of old currency whether it is described as being “replaced” or “redeemed”. In other words, only if the plaintiffs could establish that they had complied with the terms of section 1(1)(b) of Decree No. 51 of1967 could they succeed here. Whilst we would agree with Mr. Impey that the legal position as to the status of the notes in question as legal tender is erroneously stated in paragraph 7 of exhibit A that exhibit was only a directive from the defendants as to the basis upon which they would accept old notes for replacement by new notes after the 22nd January, 1968 and, as such, irrespective of the erroneous statement therein as to the basis of legal tender, it must otherwise be treated as a proper directive for the purposes of Decree No. 51 of 1967.
That takes us to the next two grounds of appeal argued together namely:-
“(3) The learned trial judge erred in refusing to examine the question raised by the defendants as to whether the defendant had any lawful justification to refuse to redeem the said old currency notes notwithstanding any failure on the part of the plaintiff to comply with one or more conditions imposed by the Bank for redemption.
(6) The learned trial judge misdirected himself in holding that his decision must depend on whether the plaintiff established it has complied with the defendants direction as to the recording of the names and addresses of the depositors of amounts of over 500 pounds when he should have considered firstly whether or not such a failure constituted any defence to the action.”
It was here Mr. Impey’s submission initially that exhibit T which read:-
“Suit No. LD/634/68 Bank Central Bank of Nigeria, Tinubu
of the North Ltd. v. Central Square, Lagos, Private Mail Bag,
Bank of Nigeria. 12194
Cables Cebank:
Telephone: ……………
23rd December, 1967 .
Dear Sirs,
The New Nigerian Currency Notes
Consequent upon the issue of new Nigerian Currency Notes, you are required to comply with the following formalities:-
(i) In respect of all persons (individuals) wishing to exchange old ” Nigerian Currency Notes for new ones, particulars are to be obtained as per attached form;
(ii) completed forms referred to in (i) above in respect of exchange of 500pounds and over should be forwarded to the Central Bank at the close of business each day.
Yours faithfully,”
was not a valid instruction as all that the Central Bank of Nigeria could do was to approve an application for conversion under section 1(1)(b) of the Decree and it could not impose conditions upon which it would act. After further argument however he abandoned this submission, very rightly in our view, as to our mind if a discretion whether or not to approve something is given to someone then the person exercising the discretion can require conditions to be fulfilled before he is willing to exercise that discretion in favour of an applicant.
Finally, Mr. Impey argued on the facts that the plaintiffs had discharged the onus of establishing that they had received the 88,000pounds of notes in question prior to the 22nd January, 1968 which they had then paid into the defendants on the 23rd January, 1968. The learned trial judge, however, as we have said, made a most careful and thorough review of the evidence and we do not see that he was in any way shown to have come to wrong conclusion thereon.
It was the misfortune of the plaintiffs that the manager who was alleged to have received the 88,000pounds the money being, be it noted, uncounted and merely accepted by the manager as to the amount on the word of the depositor which to our mind was a banking procedure so incredible that in itself it must have cast doubt on the whole transaction had left the service of the plaintiffs so that they did not call him to give evidence though, apart from any difficulty they might have had in finding him, they may well have had their own good reasons for not seeking to bring him to court in view of his behaviour.
Be that as it may, we think the learned trial judge was entitled to come to the conclusion that he did that the plaintiffs had not made out their case that they had complied with the required procedure for replacing old notes with new ones. Indeed, although the learned trial judge did not advert to it it seems to us that section 1 (1)(b) of Decree No. 51 of 1967 contemplates an application to the Governor of the Central Bank for approval for conversion as a special case and requires his approval to such application and we do not see that this was ever established here.
Without proof of some additional directive from the Central Bank, which was not forthcoming, showing that the Governor accepted the procedure adopted as compliance with section 1(1)(b) we do not think that the mere payment over the counter of the Central Bank of 88,000pounds was either an application as such or an approval by the Governor as such within the purport of section 1(1)(b).
This however is merely an additional reason as on the facts the learned trial judge in any case found, as we have said we think he was entitled to do, that the procedure required and laid down by the Central Bank for conversion had not been complied with. The appeal accordingly fails and is dismissed with 44 guineas costs to the respondents.
SC.118/1970
