Standard Trust Bank Limited V. Barrister Ezenwa Anumnu (2007)
LawGlobal-Hub Lead Judgment Report
OLUFUNLOLA OYELOLA ADEKEYE, J.C.A.
By a writ of Summons and Statement of claim filed on 18/7/02 the plaintiff – Barrister Ezenwa Anumnu claimed against the defendant Standard
Trust Bank as follows-
“Wherefore the plaintiff claims against the defendant the sum of N10,000,000.00 (Ten Million Naira) being damages for wrongful dishonour of the plaintiffs said cheque No 1408231 or in the alternative the sum of N10,000,000 being damages for negligence in the wrongful dishonour of the plaintiff’s said cheque.”
The facts of the case before the trial court according to the pleadings of the parties were that the plaintiff as a customer of the defendant bank operated the current account No: 04012150901116 at the Garki Business office, Yola Street Garki Abuja. The account was in the name of his legal firm – Joint Heirs Chambers. On the 30th of April 2002 – there was a credit balance of N607, 954.77 in the account. The plaintiff issued cheque No. 01408231 drawn on this account for a sum of N601, 000.00(Six Hundred and One Thousand Naira) to one of his major client at the time Mr. Bimbo Oguntunde. This was in the course of his business as a legal practitioner and he was the sole signatory to the account. Upon presentation of the cheque by Mr. Oguntunde, it was returned unpaid and marked OCR – Meaning – “Drawer Confirmation Required”). The return of the cheque invoked the displeasure of Mr. Bimbo Oguntunde which he expressed and threatened to lodge a complaint about the plaintiff to the Disciplinary Committee of the Nigerian Bar Association. Mr. Bimbo Oguntunde had issued cheques to third parties on the strength of Exhibit A – while those cheques were consequently returned unpaid. The client returned the cheque and insisted on following the plaintiff to the bank to collect cash equivalent of the amount as he was of the impression that the Respondent had misappropriated his money. On the 7th of May 2002, when he issued another cheque in the presence of his client Bimbo Oguntunde for a sum of N601, 000.00 the cashier informed him that the money on the cheque could not be paid because of deductions, a sum of N3, 005 to cover COT and another N1, 050 as charges on the returned cheque from the plaintiff’s Account. The deduction of N1, 050 confirmed that the cheque was dishonoured. The plaintiff gave evidence of a cheque in the sum of N600, 000.00 which he issued in favour of one Mr. Uche Durike on 28/3/02 which was paid without the drawer’s confirmation.
The defendant justified the action in its defence with evidence about the banks policy that any cheques above N100, 000.00 must be pre-confirmed by the drawer while the Respondent failed to confirm Exhibit A, the cheque issued for N601, 000,00. The plaintiff owed it a duty to inform the appellant that he had issued a cheque above N100, 000 which he failed to comply with hence Exhibit A was dishonoured. The plaintiff had never in the course of their business transaction issued a third party cheque above N60, 000 hence the steps taken by the defendant to refer the cheque back for his confirmation. The defendant maintained that referring a cheque back to drawer and marked DCR- i.e. Drawer Confirmation required is one of “Model reasons for dishonouring a cheque. The defendant denied injuring the credibility of the plaintiff or being in anyway negligent in the manner it dishonoured and marked DCR on Exh. A.
Besides Exhibit A the cheque drawn on the account of the plaintiff with the defendant, the plaintiff in the course of trial tendered other documents as Exhibits B-G. In the considered judgment of the trial court, the learned trial judge held in the ultimate paragraph as follows:-
“The plaintiff need not prove actual loss in contract neither does he needs to establish actual damage in libel because it is actionable libel, from the above cases; the plaintiff is entitled to substantial damages.”
The plaintiff told the court that the drawee of Exhibit A was his major client; the client terminated the client and lawyer relationship between him and the plaintiff. The loss of the client is a great blow to the plaintiff’s legal practice. He was subjected to humiliation by the major client who threatened to report him to the Chairman of Nigerian Bar Association Abuja Branch for Disciplinary action. Apart from the fact that Exh A was dishonoured ”Drawer Confirmation Required” was endorsed on same which portray the plaintiff as dishonourable. The court hereby accesses the damages to be paid to the plaintiff as N3, 000,000(Three Million Naira).
In awarding the plaintiff the sum of N3,000,000.00 the court has taken into consideration the value of Naira or the purchasing power of Naira which has come to its lowest level because of what is usually refer to as RUN AWAY inflation.”
Being dissatisfied with the foregoing decision the defendant henceforth to be referred to as the appellant, the Standard Trust Bank Limited appealed to this court.
The appellant complied with processes of appeal as stipulated in the Court of Appeal Rules 2002. At the hearing of the appeal the appellant adopted and relied upon the appellants brief filed on 19/4/06 in which four issues were distilled for determination as follows:-
(1) Whether the claim as formulated by the plaintiff/Respondent is valid to entitle him to the judgment of the lower court?
(2) Whether the damages of N3, 000,000.00 is not erroneous and excessive when the claim is for either breach of contract or alternatively for negligence.
(3) Whether the learned trial judge was right in law in holding that the term “Drawer Confirmation Required” “Drawer Attention Required” and “Refer to Drawer” mean same thing (grounds 2 and 3).
(4) Whether the judgment is not against the weight of evidence considering the clear and uncontroverted evidence as to the meaning of the endorsement of Drawer Attention Required,”
In the Respondents Brief deemed filed on 10/10/06 two issues were distilled for determination as follows:-
(I) Whether the lower court was right in entering judgment in favour of the Respondent having regard to the peculiar facts and circumstances of this case.
(II) Whether the damages of N3, 000,000,00 awarded by the lower court in favour of the Respondent, a legal practitioner is erroneous and/or excessive.
It is noteworthy that though the two issues raised by the respondent embrace all the four issues formulated by the appellant – it is however in my view equitable to consider this appeal on the appellants four issues –
ISSUE NO. ONE
Whether the claim as formulated by the plaintiff/Respondent is valid to entitle him to the judgment of the lower court?
The appellant referred to the claim against the Respondent for a sum of N10, 000,000.00(Ten Million Naira) for damages for wrongful dishonour of the plaintiff’s cheque or in the alternative same amount being damages for negligence in wrongful dishonour of the said cheque. It is the contention of the appellant that a claim cannot be at large it must come under the head special damages or general damages. The learned trial judge in his judgment mixed everything up and awarded damages to be paid to the Respondent as N3,000,000.00 without reference to the claims for N1,050 the amount paid on the dishonoured cheque or the sum of N3,005 deducted from the account of the respondent as COT = which are in the nature of Special Damages. The learned trial judge took evidence of special damages and awarded a lump sum as general damages. The appellant referred to the cases of Osuji V Isiocha 1989 3 NWLR pt 111 pg 623 at pg 636 and Shell Petroleum Development Co Nig Ltd V Tiebo Rill 19964 NWLR pt 445 pg 657 and requested that the issue be resolved in favour of the appellant.
The Respondent replied at paragraph 4. 1.7 of the Respondents brief and submitted that the action of the Respondent was based on breach of contract for wrongful dishonour of his cheque – Exh A. The Respondent did not claim special damages. The Respondent indicated this in the final paragraph of the statement of claim.
The Respondent did not make a claim for special damages the lower court could not have granted same. The categorisation of damages into special and general damages is inapt in cases of breach of contract. The cases Osuji V Isocha and Shell Petroleum Development Company Nigeria Limited V Tiebo cited by the appellant on the categorisation of damages into special and general damages are cases founded on tort and therefore inapplicable in cases of breach of contract. The Respondents action is founded on breach of contract by a banker to its customer. The principles of law governing cases of tort are different from those governing cases of breach of contract.
The Respondent referred to the cases of Ekpenyong V Nyong 1975 2SC 71 Okongwu V NNPC 19894 NWLR pt 115 pg 296 NPMB V Adewunrni 1972 1 All NLR pt 2 pg 433 Urnoetuk V UBN Plc 2002 3 WLR pg 62 Kabel Metal Nig ltd V Gabriel Ativie 2001 26 WRM 64 at pg 80
ISSUE NO. TWO
Whether the damages of N3, 000,000.00 is not erroneous and excessive when the claim is for either breach of contract or alternatively for negligence?
The appellant submitted on this issue that the learned trial judge was wrong in relying on factors referred to in the judgment as libelous, breach of contract, Negligent and wrongful in awarding the respondent N3,000,000.00 damages. The damages of N3, 000,000.00 is excessive when the actual financial losses of the appellant are N3,005 as COT and N1, 050 as commission charged on the returned cheque. The learned trial judge made an award under general damages whereas the loss suffered by the Respondent is ascertainable. The award of N3, 000,000.00 made in the circumstance of this case is high as there is no evidence to support the loss suffered by the Respondent – and moreover such loss could have been claimed as special damages. The Respondent is in the circumstance entitled to nominal damages.
Reliefs demanded alternatively are not granted cumulatively. An appellate court will interfere with the award of damages where it acted on wrong principle or the award is arbitrary. This court is urged to set aside the award.
The appellant cited cases as follows:-
Connet Shipping Agencies ltd V Babbit ltd 220 FWLR (40) 1630 P.T.I. V Mesimone 1995 6 NWLR pt 402 pg 474 Ajao V Ademola 2005 All FWLR 256 at 1239 Uwa Printers Ltd V Investment Trust Ltd 1988 5 NWLR pt 92 pg
The Respondent replied and submitted that the learned trial judge had ample evidence upon which it relied to make the award. The learned trial judge did not make any award based on special damages which was not claimed by the Respondent. The respondent led evidence to establish that he is a person in business, and that the wrongful dishonour of his cheque has caused damage injury and loss to his reputation and business.
The law is that a businessman which has been interpreted to include legal practitioners is entitled to recover substantial damages for the wrongful dishonour of his cheque without pleading or proving actual damages.
Damages in such a situation are at large depending on the circumstances of the breach of contract or dishonour of cheque warrant although there is no proof of actual loss. For this reason the general rule established in Hedley V Baxendale 1884 EX 341 is not usually applied to cases of breach by banker and its customer. The court based the award of N3, 000,000.00 to the Respondent on this principle. The Respondent also disputed that the learned trial judge granted substantive and alternative claims cumulatively. The Respondent claimed damages for wrongful dishonour of Exh A. The respondent gave evidence of what he suffered through dishonour of the cheque both in his legal practice, COT and administrative charges on the dishonoured cheque. The respondent claimed for them and the lower court awarded damages to cover them. The relationship of the appellant and respondent was based on contract, the breach of which was occasioned by the negligence of the appellant in failing to honour Exh A in accordance with the contract. The respondent argued that the amount is not excessive taking into consideration the social status of the Respondent and low purchasing power of the Naira. The award of damages is a matter for the discretion of the lower court and the appeal court will not lightly interfere with same merely because it would have granted a different award. On this issue the Respondent cited cases as follows-
African Continental Bank V Dike 2000 5 NWLR pt 675 pg 441 Salami V Savannah Bank of Nigeria Ltd 1990 2 NWLR pt 130 pg 106
Hirat Aderinsola Balogun V National Bank of Nigeria 1978 All NLR 63 at pg 70
Usman V Abubakar 2001 16 WRN pg 140 Leaders & Co V Bamaiyi 200442 WRN 91 at pg 112 Adamu V Olugbode 2001 13 WRN 135
Acme Builders Ltd V Kaduna State water Board 1999 2 NWLR pt 590 pg 288
ISSUE NO. THREE
Whether the learned trial judge was right in law in holding that the term “Drawer Confirmation Required” “Drawer Attention Required” and “Refer to Drawer” mean same thing.
The appellant held that the evidence before the learned trial judge on this issue which is clear and uncontroverted is from an expert a Chartered Accountant and the Resident compliance officer of the Appellant James Ogogo who testified that the import of DCR is that there is money in the account but the account holder need to confirm payment to the holder of the cheque or drawee. Another witness Oyedele Adegboyesa attached to the Central Bank as a senior manager in Banking Operations explained the meaning of DCR written on a cheque as Drawer’s Confirmation Required. The Bank that wrote DCR on a cheque wants to exercise additional caution before paying the cheque, hence will like to know whether the drawer of the cheque actually wants the cheque to be paid. The drawer may not have withdrawn such a big amount before or that the drawer has been presenting cheques for payment by himself in the bank. It does not mean that the drawee has no money in the bank. The evidence was not controverted by the respondent. The cases relied upon by the court to hold that Drawer Confirmation Required has the same meaning as Drawer Attention Required and Refer to drawer-
Access Bank PLC V M.F.C.C.S. 2005 3 NWLR pt 913 pg 460 at pg 476 and African Continental Bank V Dike 2000 5 NWLR pt 675 pg 441 talked about “Drawer Attention Required or Refer to Drawer”. The court however admitted in the judgment that there is a difference between Reconfirmation and dishonouring a cheque. The findings of the learned trial judge on this issue is perverse and the appeal must be allowed on this issue.
The Respondent submitted by way of reply to the foregoing that the interpretation of those phrases by court was mere obiter dictum made by the way. In actual fact the effect of marking Drawer Confirmation Required, Drawer Attention Required or Refer to Drawer or any other reason stated in Exh G is the same – the cheque will be returned unpaid. The court in the circumstance when it is called upon to evaluate the situation has a duty to consider whether or not the dishonour of cheque can be justified. The court in this instance found that the dishonour of Exh A by the appellant by marking DCR thereon is wrongful. The appellant failed to establish that it informed the Respondent of its policy that cheques issued in favour of a third party in excess of N100, 000 should be confirmed. The appellant has a duty to disclose to the Respondent all the terms and conditions regulating the operation of his account. Such cannot be applied to his detriment, if it was kept away from him. The purported policy of the appellant that all cheques above N100, 000.00 should be confirmed was not brought to the notice or attention of the Respondent. While the cheque Exh A was marked DCR dishonoured and returned unpaid a previous cheque in the sum of N600, 000.00 issued by the Respondent to a third party on 28/3/02 was honoured and paid without recourse to the Respondent for confirmation. The improper use of the word DCR on Exh A resulted in a Breach of Contract. The learned trial judge was right in entering judgment in favour of the Respondent.
ISSUE NO. FOUR
Whether the judgment is not against the weight of evidence considering the clear and uncontroverted evidence as to the meaning of the endorsement of Drawer Confirmation Required.”
On this issue the appellant adopted its submission under Issue NO.2 and regardless of the abundant evidence that Drawer Confirmation Required is not the same thing as Drawer Attention Required or Refer To Drawer – the learned trial judge held in his judgment that they mean the same thing which finding is against the weight of evidence. The learned trial judge also found that the act of the appellant was libelous as the respondent neither pleaded any libel nor did he bring any witnesses to establish libel. The judgment is against the weight of evidence hence this court is urged to set aside the judgment of the lower court dated 18/10/05 and dismiss the Respondents case with costs.
The Respondent however replied that the findings of the lower court in this issue is unassallable. The findings do not have a vitiating effect on the judgment nor is the judgment against the weight of evidence. This issue is to be resolved in the affirmative.
I have given a painstaking consideration to the submission of the appellant and the Respondent. I find the undermentioned salient facts of common ground and undisputed-
(a) That the Respondent, Barrister Ezenwa Anumnu is a customer of the appellant – the Standard Trust Bank limited and operated the Current Account number 0401215091116 in the name of his legal practice Joint Heirs Chambers.
(b) That the Respondent was the sole signatory to the account.
(c) On 30/4/02 the Respondent issued a cheque No.0148231 in the sum of N601, 000.00 (Six hundred and one thousand naira) Exh A in favour of one of his mayor client at the time – Mr. Bimbo Oguntunde.
(d) At the time he issued the cheque to this client, there was in his account a credit Balance of N607, 954.77.
(e) Upon presentation of the cheque by the client Bimbo Oguntunde through his banker it was returned unpaid and marked OCR – Drawer Confirmation required.
(f) The Respondent collected the cheque and came to the bank accompanied by the client to collect cash equivalent of the cheque on 7/5/05.
(9) On that date he was informed by the cashier that the sum of N601,000.00could not be paid due to administrative deductions from the account so he withdrew a sum of N600,000,00 only.
(h) The administrative charges deducted were COT a sum of N3,005 and N1, 050 as charges on the returned cheque Exh A.
(i) The sum of N1, 050 charged on the cheque Exh A confirmed that the cheque was dishonoured.
The bone of contention between the patties arising from the dishonoured cheque was the stand and defence of the appellants as revealed in the evidence of its two witnesses DW1 and DW2 who were vast and properly conversant with banking operations that:-
(1) As a policy of the appellant cheques issued for any sum above N100, 000 must be pre-confirmed by the drawer- while the word DCR endorsed on the cheque Exh A required him to confirm issuing the cheque which he failed to do.
(2) The Respondent owed a duty to inform the appellant that he had issued the cheque Exh A for N601, 000 far above the N100,000 limit which he failed to discharge.
(3) The appellant maintained that the Respondent prior to issuing the cheque Exh A had not issued any third party cheque over and above N60, 000 hence the appellant dishonoured the cheque and referred it to the Respondent for confirmation.
The appellant tendered before the trial court the list of model reasons for returning unpaid cheque as Exh G.
The Respondent tendered Exhibits (1-4 which reflected that the respondent issued a cheque in the sum of N600,000.00 in favour of Mr. Uche Durike on 28/3/02 which the appellant paid without recourse to the Respondent for his confirmation. The respondent contended that there was no information about this policy of the bank in his Account opening package Exh 1, E2 and F neither was any information subsequently passed to him in the process of his banking transaction with the appellant until Exh A was dishonoured.
The trial court found in favour of the Respondent on his evidence and awarded him general damages to the tune of N3, 000,000.00. The appellants claim before the trial court was for N10, 000,000.00.
This brings me to consider the first issue for determination which reads:-
“Whether the claim as formulated by the plaintiff/Respondent is valid to entitle him to the judgment of the lower court?”
The crux of the submission of the appellant on this issue is that the claim of the Respondent lacked specification as damages must either be special damages or general damages. The Respondent proved only special damages in the form of specific sums of money levied by the appellant on his account by way of administrative expenses N1, 050 and N3, 005 as COT. The learned trial judge awarded all the cumulative damages and offered a sum of N3, 000,000.
I have to restate the Respondents claim made in the alternative in the writ and statement of claim and which reads:-
“Whereof the plaintiff claims against the defendant the sum of N10, 000/000 being damages for wrongful dishonour of the plaintiffs said cheque NO.1408231 or in the alternative the sum of N10, 000/000 being damages for negligence in the wrongful dishonour of the plaintiff’s said cheque.”
I have to advert my mind at this stage to the fact that this matter emanated from the transaction between a banker and its customer which relationship is founded upon contract. The legal relationship between a bank and a customer based on contract is that of creditor and debtor, or principal and agent. The creditor/principal being the customer and debtor/agent being the bank. The contractual relationship imposes a duty of care on the bank the breach of which will impose on the bank a liability for negligence.
The role of bankers and their predominant business is the receipt of monies on current or deposit account and the payment of cheques drawn by as well as the collection of cheques paid by a customer. The receipt of money from and on account of his customer by a bank constitutes the banker the debtor of the customer and the banker undertakes to pay only part of the money thus due from him to the customer against written orders of the customer. The relationship is equally that of principals and agent so that a cheque drawn on the banker by the customer represents the order of the principal to his agent to payout of the principal, money in his hands, the amount stated on the cheque to the payee endorsed on the cheque.
Afribank (Nig) Plc V A. I. Investment ltd 2002 7 NWLR pt 765 pg 40
Access Bank Plc V Maryland Finance Company and Consultancy Service 2005 3 NWLR pt 913 pg 460 Balogun V N. 8. N. 1978 3SC 155
In effect a banker is under a duty to honour cheques drawn on it by a customer who has sufficient funds with the bank to cover the amount endorsed on the cheques. Where a bank refuses to pay a customer’s cheque such a refusal, failure or neglect by the banker to honour cheques in such circumstances constitutes breach of duty for which the bank will be liable in damages. The extent or nature of damages is that actually resulting from the breach of contract.
African Continental Bank Ltd V Dike 2000 5 NWLR pt 675 pg 441
Salami V Savannah Bank Nigeria Limited 1990 2 NWLR pt 130 pg 106
Access Bank Plc V M.F.C.C.S. 2005 3 NWLR pt 913 pg 460
On a perusal of the pleadings I observe that the Respondent claimed for damages and not for special damages or specific sums as COT N3,005 or N1,050 for the dishonoured cheque, after enumerating losses following dishonouring the cheque on his person and legal practice.
The court awarded damages for wrongful dishonour of Exh A.
The Rule in Hadley V Baxendale 1854 9 Exchequer 341 is usually not applied to cases of bankers to his customer as a cheque is a bill of exchange under section 2(1) Bills of Exchange Act cap 35 Laws of the Federation of Nigeria 1990. The measure of damages by virtue of section 57 of the Act shall be deemed to be liquidated damages which include:-
(a) The amount of the bill
(b) Interest thereon from the time of presentation for payment of the bill is payable on demand and from the maturity of the bill in any other case.
(c) The expense of noting or when protest is necessary and the protest has been extended, the expenses of protest.
The damages permissible here is therefore not in the nature of ordinary general damages but liquidated damages.
Union Bank of Nigeria V Scpok Nigeria Ltd 1998 12 NWLR pt 578 pg 439
U.B.A Ltd V Ademuyiwa 1999 11 NWLR pt 628 pg 570
The dichotomy of special and general damages which is not applicable to cases of breach of contract also extends to cases of dishonoured cheques.
M.P.M.C. V Adewunmi 1972 1 All NLR pt 2 pg 433
Swiss-Nigeria Wood Industries Ltd V Bogo unreported SC/14/70 of 313/70
Maiden Electronics Works Ltd V A-G Federation 1974 1 SC 53
Also different considerations govern award of general damages for an action based on contract and an action based on torts, while categorisation of damages into special and general damages are for cases founded on tort.
Okongwu V N.N.P.C. 1989 4 NWLR pt 115 pg 296 UBAV Tejumola 19864 NWLR pt 38 pg 815
Issue No. One is resolved in favour of the Respondent.
In Issue No. Two the grouse of the appellant is that the damages of N3,000,000 is erroneous and excessive when the claim is for either breach of contract or alternatively negligence.
The appellant reviewed the conclusion of the lower court as regard failure of the appellant to honour Exh A when there was sufficient money in the Respondent’s account, described by the learned trial judge as libelous, Breach of contract, negligent and wrongful. The appellant held that the sum of N3,000,000 awarded is very excessive when the financial loss of the Respondent can be ascertained and it is limited N3,005 as COT plus N1,050 as commission charged for the returned cheque which are categorised as special damages. The learned trial judge made the assessment of damages under wrong principle, and also that the appellant claimed his reliefs in the alternative but the learned trial judge made them cumulative. This court is urged to interfere with the award of damages as it was based on wrong principles. The Respondent held that the amount of N3, 000,000 awarded was justified in the peculiar circumstance of this case as there was ample evidence before the court to sustain the award. I am also mindful of the evidence on printed record both oral and documentary led by the Respondent to establish the loss to his reputation and business as a legal practitioner which the wrongful dishonour of his cheque caused.
He did not only lose a major client, this client threatened to lodge a complaint to the Disciplinary Committee of the Nigerian Bar Association about him.
The development as described by the Respondent dealt a staggering blow on his young legal practice. The account was subjected to COT and administrative charges for dishonoured cheque. His ego was bruised and reputation as a young lawyer adversely affected. The lower court took into consideration the injuries suffered by the Respondent in awarding damages.
Earlier on in this judgment I mentioned the measure of damages in cases of wrongful return of charges between a bank and his customer shall be deemed as liquidated damages – as pronounced in UBA V Ademuyiwa 1999 11 NWLR pt 628 pg 510 and U.B.A. V Scpok Nigeria Ltd 1998 12 NWLR pt 578 pg 439
A liquidated damage is a debt or either specific sum of money usually due and payable and its amount must be already ascertained or capable of being ascertained as a matter of arithmetic without any other or further investigation. Whenever the amount to which a plaintiff is entitled can be ascertained by calculation or fixed by any scale of charges or other positive data it is said to be liquidated or made clear. Again where the parties to a contract as part of the agreement between them fix the amount payable on the default of one of them or in the event of breach by way of damages such sum is classified as liquidated damages. It is in the nature of a genuine pre estimate of the damage which would arise from a breach of the contract so long as the agreement is not obnoxious as to constitute a penalty and it is payable by the party in default. The term is also applied to sums expressly made payable as liquidated damages under a statute.
Maja V Samouris 2002 7 NWLR pt 765 pg 78 Iwueke V I. B. C. 2005 17 NWLR pt 955 pg 447 Befareen Pharm. Ltd V African Int. bank Ltd 2005 17 NWLR pt 954 pg 230
In recent times and in majority of cases the courts have not only exercised their discretion in actions for breach of contract by a banker to its customer in favour of awarding substantial damages, but they are also now awarded “at large” “within reason” of any such sum as they consider in the circumstance of the breach of contract or dishonour of cheque warrant although there is no proof of actual loss.
Hirat Aderinsola Balogun V National Bank of Nigeria 1978 All NLR 63 at pg 70
Salami V Savannah Bank Nigeria limited 1990 2 NWLR pt 130 pg 106
Courts have equally taken into consideration the low purchasing power of the Naira or global inflation.
Usman V Abubakar 200116 WRN 160 pg 175
In the case of Access Bank Plc V Maryland Finance Company and Consultancy Service 2005 3 NWLR pt 913 pg 460 – the court held at pg 476-477 paragraphs F-H that-
“The measure of damages in an action against a banker for breach of contract to honour a cheque that has been drawn by a customer against his account would depend on the status or station in life of customer.” If the customer is able to prove that by reason of the said breach he has suffered considerable damages to his reputation and generally to his business he will be entitled to substantial damages. ”
In African Nig Plc V A. I. Investment Lt 2002 7 NWLR pt 765 pg 40 the court held that-
“Where a banker wrongfully dishonours a customer’s cheque the successful plaintiff is entitled to damages arising from the breach of contract and general damagesfor libel.”
A claim could be made in the alternative contemplating an action for breach of contract and libel. The learned trial judge used the terminology libelous, breach of contract, negligent and wrongful to describe the failure of the appellant to honour the cheque Exh A after citing cases which expressed the opinion differently and individually that to dishonour a cheque when a customer has adequate funds in his account to pay is defamatory and its imputation is to the Respondents credit
Access Bank Plc V M.F.C.C.5. 2005 3 NWLR pt 913 pg 463 Dike V African Continental Bank Ltd 2000 5 NWLR pt 657 pg 446
Access Bank Plc also expressed that it is Negligent and wrongful. The case of Salami V Savannah Bank of Nig Ltd rated same as a breach of contract.
I have to emphasise also that a bank has a duty under its contract with its customer to exercise reasonable care and skill in carrying out its part with regard to the operations within its contracts with its customers. The duty to exercise reasonable care and skill extends over the whole range of banking business within the contract with the customer. This duty applies to interpreting ascertaining and acting in accordance with the instructions of the customer. It is clear that in the opinion of the learned trial Judge the appellant was in breach of the duty of reasonable care and skill it owed to the appellant its customer
Agbanelo V UBN Ltd 2000 7 NWLR pt 666 pg 534, ACB Ltd V Dike 2000 5 NWLR pt 675 pg 441-
It is settled law that an alternative award is an award that can be made instead of another. Where a plaintiff is uncertain whether the facts he relies on would entitle him to a relief in addition to a first relief or merely as an alternative relief he can claim the subsequent relief as a further or alternative relief. Further where a plaintiff on a set of facts asks for a relief and a second relief in the alternative, it is for the court to decide on the facts, whether the grant of the second relief as a further relief will not amount to double compensation.
It is only where the court finds that it could not, for any reason grant the principal claim that it would consider the alternative claim.
U.B.N V Penny-Mart Ltd 19925 NWLR pt 240 pg 228 Nwangwa V Ubani 1997 10 NWLR pt 526 pg 559 Yesufu V Kupper Int. M. V 1996 5 NWLR pt 446 pg 17 NSM CO Ltd V N.B.C. 1967 1 All NLR 35
A claim made in the alternative gives the claimant two options if the main claim fails he can move on to the alternative claim.
Any failure, neglects or refusal by the banker to honour cheques where the customer has sufficient funds constitutes a breach of duty for which the bank will be liable in damages
Salami V Savannah Bank of Nig Limited 19902 NWLR pt 130 pg 106 at pg 127
There is no basis to hold that the trial court granted substantive and alternative reliefs cumulatively in the award of damages. The award here is in respect of the main claim and not the alternative on a cursory look at the penultimate paragraph of the judgment. Finally on this issue award of damages is a matter for the discretion of the trial court. A discretion properly exercised will not be lightly interfered with by an appellate court even when the appellate court is of the opinion that it might have exercised the discretion differently. An appellate court only interferes with the exercise of discretion by the lower court where that court exercised its discretion upon a wrong principle or mistake of law or under a misapprehension of the facts or took into account irrelevant or extraneous matters or excluded relevant matters thereby giving rise to injustice.
Adejumo V Ayantegbe 1989 3 NWLR pt 110 pg 417
Unilag V Olaniyan 1985 1 NWLR pt 1 pg 156
Saraki V Kotoye 1990 4 NWLR pt 143 pg 144
Williams V Williams 1987 2 NWLR pt 54 pg 66
In attending to the protest of the appellant that the learned trial judge did not follow the correct principle in awarding a substantial and excessive sum of N3,000,000to the Respondent and review this award if necessary. I have to avert my mind to the fact that an award of damages is matter for the trial court and normally an appeal court will not interfere with such award unless:-
(a) where the trial court has acted under a mistake of law
(b) Where it acted under a misapprehension of facts
(c) Where it has acted in disregard of principles
(d) Where it has taken into account irrelevant of law matters or failed to take into account of relevant matters or
(e) Where injustice would result of the appeal court does not Interfere
(f) Where the amount awarded is excessively high or ridiculously low
(g) Where the award has failed to take into consideration the naira.
UBN V Odusote Bookstores Ltd 1995 9 NWLR pt 421 pg 558
Elf (Nig) Ltd V Sillo (1994) 6 NWLR pt 350 pg 258
Onaga V Micho &. Co 1961 2 SCNLR pg 101
Douglas V Peterside 1994 3 NWLR pt 330 pg 37
SPPC Nig Ltd V Tiebo VII 1996 4 NWLR pt 445 pg 657
I do not find any of the foregoing factors applicable in the instant appeal therefore this court has no basis to interfere with the award of damages made by the lower court.
This issue is resolved in the favour of the Respondent.
The third issue for consideration by this court is the findings of the learned trial judge that the term “Drawer Confirmation Required”, Drawer Attention Required and Refer to Drawer mean the same thing.
In the interpretation of the these words I shall prefer to adopt the meaning attached to them in decided cases-
The words refer to drawer have been interpreted to amount to a statement by the bank that “we are not paying go back to the drawer and ask why or else go back to the drawer and ask him to pay”
Dike V ACB Ltd 2000 5 NWLR pt 657 pg 458
Drawer Attention Required which expression connotes non-availability of funds in the customer’s account which will equally be wrongful and defamatory to return a cheque so marked if the customer has adequate funds in his account.
Drawer Confirmation Required may be interpreted to mean let the customer confirm if he is ready to take on extra debit or indebtedness in his account. It may signify that the level of his debit balance can no longer be tolerated as opposed to the explanation of DW 1 and DW 2 that it was the policy of the bank to re-confirm any cheque issued to 3rd party which is more than N100, 000. I agree with the reasoning of the learned trial judge that
“Drawer Confirmation Required”, Drawer Attention Required and Refer to Drawer mean the same thing in banking operations as they are warnings to dishonouring a cheque. A cheque is returned unpaid after being so marked.
The connotation to a third party is that there is no fund or no sufficient fund in the account to accommodate the dishonoured cheque.
Finally the appellant wants a pronouncement of this court on whether the judgment of the lower court is not against the weight of evidence considering the clear and uncontroverted evidence as to the meaning of the endorsement “Drawer Confirmation Required”.
Where a judgment is attacked on ground of being against the weight of evidence, the Court of Appeal has a primary role to consider the Judgment and seek to know the following:-
(1) The evidence before the trial court
(2) Whether the trial court accepted or rejected any evidence upon the correct perception
(3) Whether it correctly approached the assessment of the value on it
(4) Whether it used the ‘imaginary scale of justice to weigh the evidence on either side
(5) Whether it appreciated upon the preponderance of evidence which side the scale weighed having regard to the burden of proof
Agbonifo V Aiwereoba 1988 1 NWLR pt 70 pg 325
MISR (Nig) LtdVIbrahim 1975 5SC 55
Egonu V Egonu 11-12 SC 111
The learned trial judge relied on the evidence of DW 1 and DW 2 the appellant’s official and a Senior Manager in Banking from the Central Bank of Nigeria who explained the meaning of Drawer Confirmation Required and defined same in various terms. DW 2 tendered Exh G headed List of Model Reasons for Returning unpaid Cheques and explained that DCR written on a cheque does not mean that the customer has no money in the account but the paying bank wants to exercise additional care before paying the bank.
The reasons are:-
(1) To enable the paying bank to confirm whether the amount should be paid
(2) The drawer has not withdrawn such a big amount before.
(3) The drawer has always been presenting cheque by himself and not through a third party.
He further gave evidence of the Central Bank’s directive that banks must ask their customers to reconfirm certain amounts of cheques but the value vary from bank to bank.
This was confirmed by DW1 who put the amount as N100,000 in the appellants bank.
Neither DW 1 nor DW 2 could tell when the Central Bank Directive was issued and where it could be found since it is not part of Exh G model reasons for returning unpaid cheques. The directive was not reduced into writing so is the directive about re-confirmation of any sum over N100, 000 before withdrawal.
The information was supposed to have been passed to the respondent verbally, but the officer who disseminated the information could not be located. In Exh G the list of model reasons for returning unpaid cheques Reason number thirty-six reads – No Advice. The cheque could have been marked N/A instead of DCR if the respondent did not give prior notice to the Appellant about Exh A. The respondent gave evidence of a sum of N600, 000 cheque which he issued to a third-party on 28/3/02 prior to Exh A which was paid by the appellant without the requirement of confirmation. When the Respondent went to the bank personally to cash the amount it was not possible for him to withdraw the entire N601, 000 as an amount of N3,005 had already being deducted as COT and another sum of N1,050 as administrative charges on the Returned Cheque Exh A. The court rejected the evidence of the appellant and concluded that they failed to establish any legal defence for the dishonoured cheque Exh A. He concluded that the failure to honour Exh A was libelous, a breach of contract, negligent and wrongful.
The Respondent gave evidence of the professional and economic loss he suffered in view of the dishonoured cheque.
The court gave credence to his evidence and considered his-
(1) status as a legal practitioner
(2) His growing legal practice known as Joint Heirs Chambers
(3) Loss of his major client
(4) Subjection to humiliation by his major client who threatened to report him to the Chairman of Nigerian Bar Association Abuja Branch for Disciplinary action.
The learned trial judge also took into consideration factors relied upon in the assessment of damages awarded in decided case like
Dike V African Continental Bank Supra
Access Bank Plc Supra
Salami V Savannah Bank Supra
UBN V Folarin 2003 7 NWLR pt 818 pg 22 and the galloping Inflation trend before awarding damages in the sum of N3, 000,000 in favour of the Respondent. Civil cases are decided on preponderance of evidence where parties testified before the trial court and called witnesses, the trial court is enjoined to set up an imaginary judicial scale on which it should put the pieces of evidence adduced by the parties on both sides in order to weigh the evidence, not by the number of witnesses called by the parties but by the pieces of evidence to see which side preponderates. In the instant appeal the learned trial judge discharged that duty.
Mogaji V Odofin 1978 3-4 SC 91
Okulate V Awosanya 2000 2 NWLR pt 646 pg 530
In the instant case I hold that there-is no justifiable reason for this court to disturb the assessment and award of damages made by the trial court.
Issues three and four are resolved in favour of the Respondents.
In sum the appeal lacks merit it is hereby dismissed. Judgment of the lower court is affirmed.
Other Citations: (2007)LCN/2192(CA)
