Chief S. N. Muomah V. Spring Bank Plc. (2008)
LawGlobal-Hub Lead Judgment Report
ADAMU JAURO, J.C.A.
This is an appeal against the ruling of the High Court of Justice Lagos State, sitting in the Lagos Judicial Division in Suit No. LD/1344/04 delivered on the 17th day of February 2005, by Hon. Justice A. A. Phillips.
The claim of the appellant as plaintiff, against the respondent in the court below, is as contained in paragraph 24 of the Statement of Claim, as follows:-
“(a). The sum of N1,625,000.00 (One Million Six Hundred and Twenty Five Thousand Naira) being the value of the Bank cheques purchased by the plaintiff from the defendants, which cheque was never cashed but instead, placed in an escrow account and N30,527.65 (Thirty Thousand Five Hundred and Twenty Seven Naira, Sixty Five kobo) being the credit balance in the plaintiffs account No.202411 with the defendants Bank as at 31st December, 1997.
(b). Interest on the said sums of N1,625,000.00 and N30,527 65 at the rate of 25% per annum from 20th June, 1994 until the plaintiffs account is fully re-credited”.
Pleadings were filed and exchanged, thereafter the respondent filed a motion dated 12th August, 2004 seeking for the dismissal of the suit on the ground that it was statute barred. Affidavits were exchanged, arguments of counsel taken via written addresses and in its ruling, the court dismissed the suit having found it to be statute barred.
The facts of this case giving rise to this appeal, are simply put and briefly stated as follows. The appellant who was the plaintiff in the court below, alleged that he was a customer of the respondent, African Continental Bank Plc now Spring Bank Plc (substitution made pursuant to an order of this court dated 14th May, 2007), at their Festac town branch, with account number 202411. That on or about the 20th June, 1994 the appellant purchased a bank cheque in the sum of N1,625,000.00 through the said account from the respondent’s Festac branch in favour of one Festus E, Abasili. The appellant alleged that he lost the said bank cheque and immediately reported same to the respondent’s Festac town branch manager, who insisted that the appellant should wait for the mandatory six months period for the cheque to go stale before re-crediting his account with the value of the lost cheque and that he would block the cheque. The appellant further alleged that he wrote the respondent on 22nd December, 1997 to re-credit his account, which it failed to do. Several letters were later exchanged between the appellant and the respondent before 17th June, 2004 when the appellant filed in this suit at the Lagos State High Court. The suit as earlier stated was dismissed for being statute barred.
Aggrieved and distressed by the ruling dismissing the suit, the appellant lodged in this appeal against it on the 17th day of March, 2005 vide his notice of appeal of the same date containing six grounds of appeal. The appeal was duly entered pursuant to an order of this court for departure granted on the 14th day of May, 2007. The six grounds of appeal are to be found on pages 89 to 91 of the bundle of documents forming the records of this appeal. The said grounds of appeal shorn of their particulars are hereby reproduced thus:
“(i). The learned trial judge erred in law in dismissing the action on the ground that the claimant/appellant should have brought this action on or before 31st day of December, 1994 being the date the Bank cheque went stale, without determining when the cause of action accrued.
(ii). The learned trial judge erred in law in dismissing the suit on the ground that it is statute barred not minding the clear acknowledgment by the defendants in their letter of 21st January, 2004 Exhibit F” to the claimants counter affidavit deposed to on 30th September, 2004 that the Bank cheque in question had not been paid.
(iii). The learned trial judge misdirected himself in dismissing the suit by only considering the first claim of the claimant which relates to the lost cheque of N1,625,000 and failed to consider the second claim of the claimant
(iv). The learned trial judge misdirected himself on the facts and special circumstances of this case in the following passage of his judgment to wit:
“I find that I cannot agree with the argument of learned counsel for the claimant that the date the cheque got lost is immaterial for the simple reason that if, as at the time the said report, the manager of his branch of the Defendant’s bank told him that he would have to wait for 6 months for the draft to go stale before she could take any action on his report of the loss of the cheque it can reasonably be presumed on the basis of these facts that the claimant would have known at the expiration of that period whether or not the cheque had been cashed as a prudent man of business.
All the facts deposed to in the Counter Affidavit to this application go to no issue as I find them to be mere afterthoughts.”
“I find it hard to believe that a business man would wait from December 1994 until 1/4/03 a period of 9 years to ascertain whether a Bank draft had been honoured before taking legal action against his bank and based on the above fact, I am of the considered view that this action ought to have been instituted on or before 31st December, 1994 at the very latest-see pages 5-6 of the ruling.”
(v). The learned trial judge erred in law in failing to hold that the failure of the defendant bank to respond to the claimant’s series of inquiries on the state of his account was premeditated fraud by the defendant which led to the claimant’s mistake or assumption that the N1,625,000.00 was in a suspense account on his behalf.
(vi). The decision is against the weight of affidavit evidence before the court.”
In strict compliance with the rules of this court, the learned counsel for the appellant and the respondent filed and exchanged their respective briefs of argument. On 3rd April, 2008 being the day of hearing the appeal, the learned counsel for the appellant applied to withdraw his reply brief having been filed out of time and also abandoned grounds five and six of his grounds of appeal. Consequently the appellant reply brief and grounds five and six of the grounds of appeal are hereby struck out. Learned counsel for the appellant thereafter adopted his brief of argument dated 24th May, 2007 and filed on 8th June, 2007 and urged the court to allow the appeal and grant the relief contained in his notice of appeal. Learned counsel for the respondent also adopted his brief of argument dated 4th July, 2007 and urged this court to dismiss the appeal.
The appellant in his brief of argument distilled three issues as apt and germane for determination from the grounds of appeal, namely:
“(i). Whether from the claimants claim in the lower court and the statement of claim the learned trial judge was right in holding that the suit was statute barred. (Grounds 1 and 3) Oil.
(ii) Whether the Respondent’s letter of 21st January, 2004 exhibit F to the claimants counter affidavit amounts to an acknowledgment of the debt even after it had been statute barred. (Ground 2)
(iii). Whether the learned trial judge misdirected herself(sic) himself on the facts and the special circumstances of the case by failing to consider the epileptic condition of the defendant bank from 1994 to 2002.” (Ground 4)
The respondent on the other hand, adopted all the three issues identified by the appellant, and formulated an additional issue making it the fourth namely:
“Whether the Plaintiff/Appellant suit is competent.”
The issues identified for determination by both parties are identical, save for the additional fourth issue Formulated by the respondent which appears to be a summary of all the issues and thereby making his issues appear proliferated. I have meticulously studied the ruling which is the subject matter of this appeal, the briefs of argument filed by the parties and I am of the view that this appeal revolves around ascertaining the actual date of the cause of action in order to determine whether the suit is statute barred or not.
“This can be aptly covered by issue number one identified for determination as formulated by both parties. Hence this appeal will be treated on the said issue solely, to wit:
“Whether from the claimant claim in the lower court and the statement of claim the learned trial judge was right in holding that the suit was statute barred.”
In arguing the issue under consideration; the appellant started by defining the phrase ’cause of action’. In support of the definition reference was made to the cases of Omotayo Vs NRC (1992) 7 NWLR (Pt. 254) 471 at 474 and Julius Berger Nig Plc Vs Omogui (2001) FWLR (Pt. 64) 305 at 317; where it was defined to mean factual situation giving a person right to a judicial relief. Learned counsel further submitted that it is trite law, that in determining when a cause of action accrued, the court should only consider the writ of summons and the statement of claim.
Learned counsel further contended that paragraphs 6 to 16 of the statement of claim gave the following sequence of events:
(i). Appellant purchased Bank Cheque for the sum of N1,625.000 from the respondents on 26th June, 1994.
(ii). Appellant lost the said cheque and reported to the respondent verbally in 1994 and in writing on 22nd December 1997.
(iii). That respondent Bank were out of business and taken over by Nigerian Deposit Insurance Corporation after June, 1994 to December 2002.
(iv). That several correspondences were made concerning the lost cheque including respondents letter dated 4th October, 2002 (page 68 of bundle of documents) confirming the receipt of appellant’s letters and that they were investigating the report and claim.
(v). The respondents letter of 1st April, 2003 (page 65 of the bundle of documents) informing the appellant of the outcome of their investigation and denying liability.
Based on the above sequence of events and relying on Omotayo V. N.R.C (Supra), learned counsel contended that the cause of action accrued on 1st April 2003, when the respondent informed the appellant the outcome of their investigation and denied liability. In further support of this contention reference was made to the case of Fred Egbe Vs Adefarasin (1987) 1 SC 1 at 20, where reference was made to Turburville Vs. West Ham Corporation (1950) 2 KBD 208, where the court held that plaintiffs cause of action did not accrue until they received notice of rejection of their claims on 25th February, 1946.
The second limb of the appellant’s submission relates to the claim for N30,527,65 being the outstanding balance as contained in paragraphs 12, 23 and 24(a) of the statement of claim. Learned counsel contends that the outstanding balance is supported by ACB Verification form No. 189, as contained on page 27 of the bundle of papers. Based on the authority of Yusuf Vs. Co-operative Bank Ltd (1994) 7 NWLR (Pt.359) 676 at 681, counsel submitted that the appellant is entitled to any amount outstanding in his account on demand and can never be statute barred. Consequent upon the foregoing, learned counsel urged this court to set aside the ruling of the court below and hold that the suit is not statute barred.
Learned counsel for the respondent on this part, also contended that in determining whether an action is statute barred or not, resort must be made to the writ of summons and statement of claim. In line with this submission, learned counsel made reference to paragraph 24(a) and (b) of the statement of claim containing the reliefs sought by the plaintiff. The relevant dates, counsel contended in the aforementioned paragraph are that the claimants claims “as at 31st December 1997; and “interest from June 20, 1994 until plaintiffs account is fully re-credited” Learned counsel further submitted that each of the dates namely 20th June 1994, 22nd December, 1997 and 31st December, 1997 is beyond six years and therefore in contravention of the Limitation Law. As the dates were beyond six years, counsel contends that Section 8(1) (a) of the Limitation Law has been breached and the suit statute barred. In support of this contention, reliance was placed on the case of Adekoye Vs. FHA (2004) 4 NWLR 215.
Learned counsel further submits that time cannot begin to run from 1st April, 2003 based on the respondent’s letter denying liability, as it was made in the course of correspondences and meetings and did not raise a fresh cause of action. Learned counsel therefore contends that lime begun to run when the plaintiff first complained of the lost cheque in 1994 and demanded that his account be re-credited. It was the contention of counsel that time begins to run from the time first demand was made. In support of this contention, Learned counsel calls in aid the following cases:- Julius Berger Nig Plc Vs R. I. Omogui (Supra); Egbe Vs Adefarasin (Supra) and Eboigbe Vs NNPC (1994) 5 NWLR (Pt. 347)649 at 654. Learned counsel further submitted that the cause of action in this case accrued upon the lapse of six months with out re-crediting the account of the appellant. In support of this submission, further reference was made to the cases of Adekoya Vs FHA (Supra) and Mercantile Bank Nig Ltd Vs Feteco Nig Ltd (Supra). Learned counsel did not however respond to the second limb of the appellant’s submission as regards the outstanding balance in the account. In concluding learned counsel urged this court to hold that the action is statute barred and dismiss the appeal.
This appeal revolves around the application of Section 8(1) (a) of the Limitation Law of Lagos State Cap. 118 Laws of Lagos State 1994 which provides thus:
“1. The following action shall not be brought After the expiration of six years from the date on which the cause of action Accrued:-
(a) actions founded on simple contract.”
The limitation of actions law is the pivot upon which the wheel of litigation rotates and the ruthless watchman that guards the gates to the sanctuary of justice. The statute of limitation is therefore regarded as an act of peace based on the principle that long dormant claims have more of cruelty than justice in them, as the defendant might have lost the evidence to disprove a stale claim and persons with good causes of action should pursue them with reasonable diligence. The reasoning of the statute of limitation is that greater injustice is likely to be done by allowing stale claims then by refusing them a hearing on the merit. This court has had occasions to make pronouncements as to the wisdom and rationale behind statute of limitations.
See P.N. Uddoh Trading Co. Ltd Vs Sunday Abere & Anor (1996) 8 NWLR (Pt. 467) 479 at 492, Nwadiaro V. Shell Dev. Co. Ltd (1990) 5 NWLR (Pt. 150) 322 at 339 at 339 and Mercantile Bank Nig Ltd V Feteco Nig. Ltd (Supra). See also “Nigerian Law of Limitation of Actions” by E.E. Apeh.
As earlier indicated in this judgment, this appeal will be resolved based on the lone issue earmarked for determination.
A convenient starting point will be by defining the phrase ’cause of action’. Black’s Law Dictionary defined cause of action to mean” fact or facts which give a person a right to judicial redress or relief against another.” It is therefore the factual situation which gives a person the right to a judicial relief. See Omotayo V NRC (supra), Julius Berger Nig. Plc V. Omogui (001) FWLR (Pt. 64) 305, Bello Vs A-G Dye State (1986) 5 NWLR (Pt. 45) 828, Union Bank of Nigeria Plc Vs Romanos C. Omeodouagu (2004) 6-7 SC 146 and Egbe Vs Adefarasin (Supra). A cause of action therefore arises when there is in existence a person who can sue and another who can be sued and when all facts have happened which arc material to be proved to entitle the plaintiff to succeed.
It is trite as submitted by both counsel that in determining whether a suit is statute barred or not, the court is expected to examine the writ of summons and the statement of claim vis a vis the date of filing the suit. The crux of the matter in this appeal is the determination of the precise date upon which the cause of action arose as it is from then, that time wilt begin to run. See IKINE Vs EDJERODE (1996) 2 NWLR (Pt. 431) 468 at 470.
In the present case at hand it is the accrual date of the cause of action that is the bone of contention.
The contentions of the respondent as to the accrual date of the cause of action are two fold. The first is that the cause of action accrued on or before 31st December 1994 as held by the court below, that is to say immediately after the expiration of the six months meant for the cheque to go stale. In support of this contention learned counsel relied on Julius Berger Nig Plc Vs Omogui, to the effect that time begins to run when the first demand was made. The second limb of the respondents submission is that the relevant dates emphasized on both the writ and statement of claim are that the claimants claim “as act 31st December 1997; and interest from June, 20th 1994” based on which counsel contended that the two dates and 22nd December 1997 are beyond six years when compared with the date of filing the action. On the other hand, the appellant insisted that the cause of action accrued on 1st April 2003 when the respondent communicated the outcome of their investigation and denied liability to the appellant.
Undeniably there is a cause of action which is the return of the monetary value of the appellants lost cheque. In determining when the cause of action arose, it will be apposite to call in the aid of the sequence of events as contained in paragraphs 6 to 16 of the statement of claim as summarized hereunder:-
(1). Appellants purchased Bank Cheque for N1,625,000 from respondents on 26th June 1994.
(2) Appellant lost the said cheque and reported to the respondent verbally in 1994 and in writing on 22nd December 1997.
(3). That the respondent Bank closed shop and were out of business until December 2002.
(4). Several correspondences were made concerning the lost cheque including respondents letter dated 4th October 2002 (page 68 of the record) confirming the receipt of appellants letter and that they were investigation the claim.
(5). The respondents letter of 1st April 2003 (page 65 of the records) informing the appellant the outcome of their investigation and denied liability.
of their investigation
At this stage I wish to refer back to the case of Julius Berger Nig Plc Vs Omogui (Supra) relied on by respondents counsel to support the submission that accrual of cause of action is from the date when first demand was made. I wish to state that the principle in Julius Berger Nig Plc V Omogui (Supra), is not only a demand, but a demand coupled with a refusal to comply with the demand. In the said case, the Supreme Court held that the cause of action accrued when the respondent demanded for the return of his Styre diesel tanker and the appellant refused releasing same. The principles are identical with the case of Tuburville V West Ham Corporation (Supra), that is to say there must be a rejection of the claim communicated to the plaintiff before time will commence running.
In the present case at hand from the sequence of events outlined above, there has never been a denial or rejection of the claim communicated to the appellant until 1st April 2003. The failure to re-credit the account after expiry of six months did not amount to a rejection of the claim.
The respondent by their letter of 1st April 2003, which I believe was not an April fool, communicated the outcome of their investigation and denied liability to the appellant. By communicating the letter denying liability to the appellant, all facts necessary in the case have crystallized and the cause of action can be said to have accrued on that day. See Julius Berger Nig Plc V Omogui(Supra). The argument of the respondent as to the date emphasized in paragraph 24(a) and (b) of the statement of claim is of no moment as it does not signify the accrual date of the cause of action.
Consequent upon the foregoing, I hold that the cause of action in this suit arose on the 1st April 2003, and time therefore begins to run from that date.
The present suit having been filed on 17th June, 2004 is therefore not in breach of Section 8(1) (a) of the Limitation Law of Lagos State. Consequently the lone issue for determination must and is hereby resolved in the negative, against the respondent in favour of the appellant. I therefore hold that the suit is not statute barred.
Before drawing the curtain, I wish to say a word or two with regards to the second aspect of the appellants claim, relating to the outstanding balance of N30,525,65 in his account. The position of the law is that, the relationship between a Banker and its customer is that of a debtor and creditor, founded on simple contract, hence a customer is entitled to any amount standing in his account. This position of the law has been adumbrated in a plethora of judicial authorities. See Yusuf V Co-operative Bank Ltd (1994) 7 NWLR Pt. 676 at 681. There is no evidence to the effect that a demand for the outstanding balance was made, and turned down by the respondent. Indeed the respondent in paragraph 14 of their affidavit at page 53 of the bundle of documents, stated that the plaintiff had never been prevented from operating account No. 202411. In the circumstances, cause of action for the outstanding balance cannot be said to have accrued. As the accrual of the cause of action marks the commencement of computation, the outstanding balance cannot be said to be statute barred. The court was therefore wrong for failure to consider or say anything on that aspect of the claim. It was like throwing away the baby along with the bath water.
The appeal is therefore meritorious and is hereby allowed. The ruling of the Lagos State High Court dated 17th February 2005 in Suit No. LD/1344/04 delivered by Hon. Justice A. A Phillips is hereby set aside. In its place it is hereby ordered that this case be remitted to the Hon. Chief Judge Lagos State for re-assignment to another Judge for expeditious hearing on the merit.
Cost of N30,000 is hereby awarded against the respondent in favour of the appellant.
Other Citations: (2008)LCN/2830(CA)
