Societe Bancaire (Nigeria) Limited V. Margarida Salvado Delluch (2004)

LAWGLOBAL HUB Lead Judgment Report

PATS-ACHOLONU, J.S.C. 

The respondent (the plaintiff) entered into a business relationship with one Francis Philips whereby the latter promised to secure a contract for the respondent worth $55m for the construction of the Central Bank of Nigeria between, 1992/94. The plaintiff/respondent claimed that she was induced to part with the total sum of $500,000.00 which was later paid into the appellant’s bank.

The respondent heard nothing else from the said Francis Philips and to her greatest chagrin and shock she realized too late that she had been made to part with her money under false pretences as it turned out.

The money was paid into the joint account of Anthony Jiwueze and Francis Philips in the appellant’s bank. The respondent averred that the appellants were negligent in opening an account for Mr. Philips and Jiwueze without keeping to or observing the laid down standard of care and procedure in the opening and operation of an account, and that the bank did not behave in a manner expected to be followed by a prudent bank by so readily allowing Mr. Philips and Jiwueze to open an account.

At the High Court the appellant raised a preliminary objection to the fact that the State High Court has no jurisdiction stating that the subject matter of the action is a banking matter but not being one of bank and customer relationship. The High Court per Akinsanya, J. after listening to the arguments of both counsel, dismissed the suit for lack of jurisdiction, whereupon the appellant appealed to the Court of Appeal. The appellate court found merit in the appeal and allowed it and set aside the ruling of Akinsanya, J. holding that the State High Court is competent to adjudicate on the claims on this matter.

The defendant as the appellant in this case appealed to this court and framed two issues which are as follows:

1. Is it correct, as held by the Court of Appeal, that “the High Court of Lagos State still has jurisdiction” under section251(1)(d) of the 1999 Constitution “to entertain any claims connected with bank and banking except such claims were connected with fiscal measures or revenue of the Federal Government of Nigeria” .(italics ours)
2. Does this appeal fall within the sole proviso in section 251(1)(d) of the 1999 Constitution, in which circumstance the Lagos State High Court would be seized of jurisdiction

The respondent on the other hand argued that the case being one of negligence simpliciter and having nothing to do with banking matters in stricto sensu ought not to come within the provision of section 251 (1)(d) of the 1999 Constitution being no more than a simple case of tort, and therefore as she contended, is within the jurisdiction of the State High Court. The respondent company formulated only one issue which is:

Whether the Court of Appeal was right in holding that the High Court of Lagos State has jurisdiction over this action being an action which raises an issue of negligence in the ordinary course of banking practice and business only and not relating to any matter of fiscal measure or revenue of the Federal Government.

To my mind the issues framed by the appellant collapse into one issue as set out by the respondent.

The appellant’s counsel has written a 31 page brief on this very simple matter in which he exhaustibly discussed Fiscal measures and policies and revenue of the Federal Government in relation to the history of vesting of powers in the Federal High Court. He further discussed very much at length such case as Jammal Steel Structures Ltd. v. African Continental Bank Ltd. (1973) NSCC 619 and also Bronik Motors Ltd. v. Wema Bank Ltd. (1983) 1SCNLR 296; (1983) NSCC 226.

Obviously when this brief was written the judgment of this court on NDIC v. Okem Ent. Ltd. (2004) 10 NWLR (pt. 880) 107, had not been given, otherwise the appellant’s brief which is in a form of treatise and which is very verbose, would not have been so written. It is instructive that the Supreme Court exhaustively discussed the two cases of Jammal Steel Structures and Bronik Motors cases in NDIC v. Okem Ent. Ltd. (supra). Now the issue then is this, should the action be commenced in the High Court in this sort of case. For us to understand the nuances of the matter in controversy, let me go back to section 251 (1)(d) of the Constitution which states as follows:

“Notwithstanding anything to the contrary contained in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act or the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other court in civil causes and matters connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters or credit promissory notes and other fiscal measures: Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank”

It is agreed by both sides that the respondent was not a customer of the appellant. If that is so what then was the respondent in relation to the bank. The appellant argued that the lodging of the money falsely or fraudulently removed from the respondent and paid into the account of the alleged fraudsters in the appellant’s bank, could only be a civil cause or matter connected with or pertaining to banking. The respondent replicando argued with gusto and unction that there is no way the criminal lodgment of the money in the appellant’s bank could be described as something connected with or pertaining to banking. I believe that the expression “connected with or pertaining to” involves or imports the state of affair where the matter in issue involves a transaction which is peculiar to a banking operation and can only be carried on by the bank or a financial institution. It equally connotes the operational duties of a bank in respect of or in relation to its functions within the limits of its licence. The appellant’s case can be said to be that the lodgment of the money by Philips and Jiwueze in the account in the appellant’s bank has situated the bank in relation to the respondent a state of responsibility of now holding and being a repository of the respondent’s money. The respondent argued otherwise that the complaint of the respondent is nothing more than a simple case of negligence.

From the analysis of the respondent’s argument in her brief as she strives to make out an issue of negligence it is to be implied that the appellant owes a duty of care or to be assumed to owe a duty of care to the respondent. When does a duty of care arise Actually a duty of care has its origin on the concept of forseability. This principle was first enunciated in Heaven v. Pender (1883) 11 QBD 503 at 509, where Brett M. R. said: