United Bank for Africa V. Mr. S. D. Folarin & Anor (2002)
LawGlobal-Hub Lead Judgment Report
CHUKWUMA-ENEH, J.C.A.
The plaintiffs’ claim against the defendant in the court below i.e. High Court of Lagos (Coram Shitta-Bey, J.) is for the sum of N10 million, being special and general damages suffered by the plaintiffs (respondents) particularised as follows:
Special Damages:
- Transportation to and from U.K. 33,000.00
- Expected profit from cancelled auction purchases and lost deposit thereon 2,000,000.00
- Hotel accommodation and feeding for 7 days at N12,600.00 per day 88,200,00
2,121,200.00
General Damages 7,878,800.00
Total: N10,000,000.00
The court below found for the plaintiffs and awarded the sum of N8,000,000.00 made up of as follows:
Special Damages:
- Transportation to and from U.K. 33,000.00
- Expected profit from cancelled auction purchases and cost deposit thereon 2,000,000.00
- Hotel accommodation and feeding for 7 days at N12,600.00 per day 88,200,00
2,121,200.00.
General Damages 5,878,800.00
Total: N8,000,000.00
The court below then added this:
“In arriving at the above award, I have taken into consideration the fact that the plaintiff’s losses were incurred in Pounds Sterling and were converted into Naira equivalent, and also the fact of the considerable de-valuation of the Naira.”
Dissatisfied with the decision the defendant/appellant appealed to this court upon an amended notice of appeal containing twelve grounds of appeal from which the appellant had distilled twelve issues for determination. And the twelve issues raised for determination are as follows:
“From Ground One of the grounds of appeal, the issue that arises is: whether there is a contractual relationship between the appellant and the 2nd respondent in the course of the transaction that led to this suit as to enable the lower court enter judgment in favour of the 2nd respondent herein against the appellant.
From Ground Two of the grounds of appeal, the issue that arises is whether there is any justiciable action in court upon a foreign bill (which the bill in question is agreed by all to be) until such foreign bill is duly protested.
From Ground Three of the grounds of appeal, the issue that arises is whether upon the wrongful dishonour of a cheque the only person entitled to have damages awarded in its favour is the “drawer” of the cheque who is the person upon which the law confers a standing to sue.
Arising from Ground Four of the grounds of appeal is whether the lower court was right to have considered the liability of the appellant to the respondent in tort when the said tortious liability was not raised by any of the parties in their pleadings and when the court did not even call on the counsel for the parties to address her on the same.
Arising from Ground Five of the grounds of appeal is whether the learned trial Judge was right in not making specific findings on the issue of who as between the appellant and Banque Nationale De Paris Plc. ought to be held in default for causing the alleged late payment to the 1st respondent of the proceeds of the foreign bill for ?10,000 and by failing to make specific findings as to the date on which this alleged late payment was made.
Arising from Ground Six of the grounds of appeal is the issue whether the damages payable to a holder of a foreign bill of exchange upon its dishonour is liquidated to be the amount of the re-exchange with interest thereon until the time of payment. The issue that arises from Ground Seven of the grounds of appeal is whether the learned trial Judge was right in awarding the sum of N2,121,200.00 as special damages to the respondents in this case.
Arising from Ground Eight of the grounds of appeal is whether the learned trial Judge was right in awarding to the respondents the sum of N8,000,000.00 as damages in this matter.
From Ground Nine of the grounds of appeal, the issue that arises is whether the learned trial Judge was right in failing, while awarding the damages, to clearly specify the sum awarded as damages in tort and the sum awarded as damages in contract. The issue arising for determination from Ground Ten of the grounds of appeal is whether the learned trial Judge was right in awarding the sum of N8,000,000.00 damages against the appellant to the respondent for loss of reputation which they alleged they have suffered.
From Ground Eleven of the grounds of appeal, the issue is whether the learned trial Judge was right when she held that in awarding the sum of N8,000,000.00 damages against the appellant, she had taken into consideration the fact that the plaintiffs’ losses were incurred in Pounds Sterling and were converted into Naira, when the said trial Judge did not state the conversion parameters. And finally, from Ground Twelve of the grounds of appeal, the issue is whether the judgment is against the weight of evidence.”
The plaintiffs/respondents also filed their respondents’ brief of argument and therein, identified six issues for determination and they are reproduced here as follows:
“1. Whether there is a contractual relationship between the appellant and the 2nd respondent in the transaction that led to this suit as to make the appellant liable to it in damages?
- Whether the transaction that gave rise to this suit is strictly an issue confined to the provisions of the Bills of Exchange Act, Cap. 35, Laws of the Federation of Nigeria, 1990?
- Whether the passing comment of the learned trial Judge constitutes an essential part of the judgment and is appealable?
- Whether the learned trial Judge was right in not making specific findings on the issue of who as between the appellant and Banque Nationale De Paris Plc., ought to be held liable for the alleged breach of contract?
- Whether the learned trial Judge was right in making the award of special and general damages?
- Whether the judgment was against the weight of evidence?”
Briefly, the facts are not seriously in controversy. The 1st respondent requested the appellant, the bankers for the respondents for a cheque for the sum of ten thousand pounds sterling payable in London on 21/9/92. The appellant did as instructed and debited the 1st respondent’s domiciliary account with the appellant. In the United Kingdom (U.K.) the 1st respondent paid the draft into his account and issued cheques for the businesses he conducted on behalf of the 2nd respondent, and paid for them based on the appellant’s said cheque he lodged in the account with his London bankers. Because the appellant’s said cheque lodged into the 1st respondent’s London account bounced, the cheque issued by the 1st respondent for various business transactions conducted in Europe fell through. And the respondents claimed they had suffered substantial losses. The appellant laid the fault on the break down of its telex machine. I think in order to give a complete picture of the facts, I have decided to reproduce the said letter exhibit “SOF1” as follows: “S. O. Folarin, Esq.,32 Abiodun Street, P. O. Box 2232, Shomolu, Lagos, Nigeria. 16th September, 1992 The Principal Manager, United Bank for Africa Plc., Falomo Branch, Ikoyi, Lagos.
Dear Sir, DFC/SAV/STG/021 Please urgently issue a bank cheque for the sum of ten thousand Pounds only(?10,000.00) in favour of Mr. S. O. Folarin. Account No. 60375292, Barclays Bank Plc., London
Payable immediately on presentation in London on or about 21st September, 1992 and debit my account accordingly.
The cheque should be ready for collection latest 18th September, 1992. Yours faithfully, (Sgd.) S. O. Folarin.”
In respect of the issues identified for determination in the matter, the appellant had on issue one repudiated any contractual relationship with the 2nd respondent and relied on the letter of application exhibit “SOF1” from the 1st respondent a Director in the 2nd respondent’s company to debunk any contract with the 2nd respondent for a bank draft that is exhibit “SOF2” raised by the 1st respondent. The appellant referred to the import of section 132 of the Evidence Act, 1999. See Salomon v. Salomon (1897) AC 22 at 31 per Lord Macnaughten. On the issue that the 2nd respondent was not also a privy to the contract it relied on Dunlop v. Selfridge (1915) AC 847 at 835; Ikpeazu v. A.C.B. Ltd. (1965) NMLR 374. On issue two the appellant relied on section 51(2) of the Bill of Exchange Act, Cap. 35 of the Law of the Federation of Nigeria to urge that until the bill was protested there was no justiciable action.
See Sea view Investments Ltd. v. Munis (1991) 6 NWLR (Pt. 195) 67.
On issue three, dealing on the person who has locus to sue in damages the appellant argued that it was only the drawer of the cheque. In Gibbons v. West minister Bank Ltd. (1939) 3 AER 577 damages were awarded to the drawer who had the right to sue and not the payee as hers. The appellant submitted that it was its place to sue as it was its cheque that was dishonoured and that any reputation that was lost was the appellant’s.
On issue four, the appellant contested whether the court below could raise suo motu the issue of negligence not pleaded and on no evidence and without the parties addressing on it – the point having been taken at the judgment stage suo motu. Reference was made to Ojo Osagie v. Adonri (1994) 6 NWLR (Pt. 349) 131 at 154 – 155 and Ajuwon v. Akaani (1992) 9 NWLR (Pt. 316) 182 at 199 on raising a point suo motu – see Seismograph Services v. Mark (1992) 7 NWLR (Pt. 304) 203 at 212. Per Uwaifo, JCA (as he then was), Koya v. UBA (1997) 1 NWLR (Pt. 481) 251. The respondents further submitted that the appellant did not particularise of the act of negligence.
On issue five, the appellant imputed all the delay in dealing with the matter of payment of the ?10,000.00 on the Banque Nationale De Paris Plc.
On issue six, the appellant referred to section 57 of the Bills of Exchange Act, Cap. 35, Laws of the Federation, 1990, to contend the award of damages should be set aside as the respondents were only entitled to ?10,000.00 as damages. See U.B.N Plc. v. Sepok Nig. Ltd. (1998) 12 NWLR (578) 439 at 472 ‘91919197 474.
On issue seven and eight on the damages awarded under the three heads, the appellant referred to the principle in Hadley v. Baxendale (1854) Exch. 341 applied in Progress Bank of Nig. Ltd. v. Ugonna (Nig.) Ltd. (1996) 3 NWLR (Pt. 435) 202 at 217 A-B to submit that the respondent did not prove the special damages strictly as no receipts for the disbursements were tendered. On the 2nd head that the award (for projected profits) of N2,000,000 could not have been contemplated by the parties and besides as the 2nd respondent was not a party to the contract for the bank draft and the respondents did not communicate to the appellant the purposes for the draft and so the projected profits were not within contemplation. The cases of Uwa Printers Ltd. v. Investment Trust Ltd. (1988) 5 NWLR (Pt. 92) 110, A.-G., Oyo State v. Fairlakes Hotel Ltd. (No.2) (1989) 5 NWLR (Pt. 121) 255 and Artra Industries (Nig.) Ltd. v. N.B.C.I. (1998) 4 NWLR (Pt. 546) 357 at 386 E – F, were cases referred to as cases where there was not credible evidence of anticipated profits.
On the award of general damages of N5 million, it was contended to be double compensation as special damages for loss of profits had been awarded under a separate head. The case of West African Shipping Agency v. Kala (1978) 11 NSCC 114 at 120, on general damages was relied upon. See unreported suit No. CA/L/340/90 BASF (Nig.) Ltd. v. Odutola Industries Ltd. delivered on 10/1/94.
On issue nine and ten the appellant relied on ACB v. Haston (1997) 8 NWLR (Pt. 515) 110 at 136E and 137 to challenge the single sum i.e. N8m damages in tort and contract. It submitted that the appellant could not be entitled to more than the value i.e. ?10,000.00 of the bill re’91919197exchanged, which they already had received. See section 5 and 6 of the Bills of Exchange Act, Cap. 35.
On issue eleven, the appellant doubted the exchange rate used in the conversion from pounds Sterling to Naira as it was not made known by the court and for this point, he referred to the unreported suit No. CA/L/169/90 Salzgitter Stahi GMBH v. Tunji Dosunmu Industries Ltd. delivered on 8/9/96. As regard issue twelve, the appellant raised the issue of weight of evidence and submitted on the whole that the weight of evidence preponderated in its favour. The court was then urged to allow the appeal.
The respondents as stated above raised six issues. Issue one, under this head the respondents argued that the 2nd respondent was his alter ego (i.e. of the 1st respondent) and that he made the trip to Europe on behalf of the 2nd respondent.
On issue two, they dealt with the positions under the Bill of Exchange Act and Contract. Under the Bill of Exchange Act, Cap. 35, Laws of the Federation, 1990, they referred to section 2(1)(c) to show that the bankers draft came under the general term of ‘prescribed instrument’ and that section 57(2) of the said Act dealt on the damages payable to the drawer. Section 51(2) of the said Act was referred to show the bank draft as not being a foreign bill. They projected the argument that the bank draft being a foreign bankers’ draft was to be treated as a foreign promissory note requiring no protest notice. The respondents were not therefore to protest the dishonour. See sections 51(2) and 72(c) of the said Act. And for damages recoverable under the said Act they referred to section 57(b) of the said Act.
On issue three, the respondents contended that the statement by the trial court that the action was in contract and tort was a passing comment, an obiter dictum and not appellable. See Abacha v. Fawehinmi (2000) 6 NWLR (Pt. 660) 228 at 297 per Ogundare, JSC.
On issue four the respondents stated the issue was as between the appellant and Banque Nationale De Paris Plc. who was in default.
On issue five, on damages, referring to Odumosu v.ACB (1976) 11 SC 55 and A.-G., Oyo State v. Fairlakes Hotels Ltd. (No. 2)(1985) 5 NWLR (pt. 121) 255, the respondents submitted that the special damages, that is, loss of profits, travel, accommodation and feeding expenses were established by credible evidence by the 1st respondent unrebutted. See ACB v. Haston (1997) 8 NWLR (Pt. 515) 110 at 136; Agbaje v. National Motors (1971) 1 UILR 119. On general damages, it was submitted that the court exercised its discretionary powers in making the award and that the damages should not be disturbed.
On issue six on weight of evidence, the respondents argued that the evidence on the two sides when weighed in the imaginary scales, tilted towards the respondents’ and that the respondents’ case was not rebutted. See NEPA v. Dr. H. O. Akpata (1991) 2 NWLR (Pt. 175) 536. Iriri v. Erhurobara (1991) 2 NWLR (Pt. 173) 252, American Cyamamid v. Vitality Pharm. Ltd. (1991) 2 NWLR (Pt. 171) 15.
They urged the court to dismiss the appeal.
The proliferation of issues in this matter, should raise some concern in view of the nature of the dispute and the pertinent issues to be resolved in it. Surely, in this regard, twelve issues for determination are a crowd. Practically every slip in the judgment gave rise to a ground of appeal and an issue for determination. Hence, too many issues were raised albeit lacking in punch and repetitive. Learned Counsel is advised to guard against the trend. The six issues by the respondents are subsumed in the appellant’s eight issues.
The first question to consider and a crucial one is the 2nd respondent’s standing to sue on the specific contract created by exhibit “SOFl” (that is the letter requesting for a bank cheque drawn by the 1st respondent), resulting in the absence of banker/customer relationship between it and appellant. Clearly it raised the issue fundamental to the 2nd respondent’s joint cause of action against the appellant. Importantly, in banking business the relationship between a bank and its customers is contractual, and by the law of privity of contract strangers to a contract are precluded from suing on it, even if the contract was made for their benefit. In Dunlop v. Selfridge (1915) AC 847, Lord Holme put the principle thus:
“My Lords, in the law of England, certain principles are fundamental. One is that only a person who is a party to a contract can sue on it. Our law knows nothing of jus quaesitum tertio arising by way of contract.
Such a right may be conferred by way of property, as for example, under trust, but it cannot be conferred on a stranger to contract as a right to enforce the contract in personanl.”
The principle has been adopted and applied in this country in LSDPC. v. N. L.& S.F. Ltd. (1992) 5 NWLR (Pt. 244) 653 at 658 per Olatawura, JSC thus:
“Generally, only parties to a contract can enforce the contract. A person who is not a party to it cannot do so even if the contract is made for his benefit and purports to give the right to sue upon it. See Ikpeazu v. A.C.B. (1965) NWLR 374, Lagos State Development and Property Corporation & Ors. v. Nigerian Land and Sea Food Ltd. (1992) 5 NWLR (Pt.244) 653 and Union Beverages Ltd. v. Pepsi Cola International Ltd. (1994) 3 NWLR (Pt. 330) 1.”
From the above cited principles the question to be resolved could be further reduced to one of privity of contract between the respondents and the appellant. To address it, I go back to the facts of this matter and they are not in dispute. On 16/9/92, the 1st respondent using his personal letter head requested the appellant to raise for collection on 18/9/92 a bank cheque in the sum of ?10,000.00 for him payable in London on presentment on or about 21/9/92 and debit his account. The appellant prepared its cheque exhibit “SOF2” in the 1st respondent’919191s name for ?10,000.00 drawn on Banque Nationale De Paris Plc., London. There is on record evidence that the 1st respondent’91s properties were lodged with the appellant as collateral for the loan granted to the 2nd respondent (but not with respect to the ?10,000.00) and that the said business trip to Europe was undertaken on behalf of the 2nd respondent but not disclosed to the appellant. The 2nd respondent was also a customer of the appellant. Relying on the foregoing, the respondents contended they had the standing to sue the appellant.
Quite clearly, even on the respondents’ own showing as recounted above, the 2nd respondent remained a total stranger in every sense of the term to the instant contract. Both parties rightly agreed the contract was founded on exhibit “SOF1”.
On a close scrutiny of it, I agree the 2nd respondent cannot maintain a joint action with the 1st respondent on it against the appellant for want of the standing to sue.
Besides, the contract cannot be altered or modified by oral evidence as that offends section 132 of the Evidence Act, 1990 and such line of action as attempted by the respondents showed a misunderstanding of the unambiguous and plain import of exhibit “SOF1”. The court below rightly rejected the move. It needs no construction. Even moreso exhibit “SOF1” – the letter to the appellant was typed on the 1st respondent’s letter head as against the company’s letter head. The cheque exhibit “SOF2” was drawn in his name. No where in exhibit “SOF1” was it stated he was acting for the 2nd respondent and its involvement in the matter was not spelt out. And I must however, add for completeness that the 2nd respondent is a separate and distinct legal entity from the 1st respondent even though the 1st respondent is the Managing Director and literally the owner of the 2nd respondent’s company and indeed, the alter ego of the 2nd respondent. That all facts both oral and documentary here point to a contract between the appellant and the 1st respondent is irrefutable. There is no ground to sustain a joint cause of action on the contract against the appellant. The tenor of exhibit “SOF1” left no doubt as to who was really contracting with the appellant. The oral evidence of the 1st respondent portrayed him as one actively acting for himself as he even confessed that he never informed the bank (i.e. the appellant) the purpose of any of his transactions. The allegation that this manner of business had been the modus on previous occasions and therefore always acquiesced in by the appellant is not borne out by credible evidence. Finally, exhibit “SOF1” was not signed for and on behalf of the 2nd respondent nor as the Managing Director of the 2nd respondent. I am satisfied that the 2nd respondent was not a party to the said contract. This crucial issue is definitely resolved in the appellant’s favour and I shall return to it anon in the concluding segment of this judgment.
Issues two, three, five and six, can be handled together being of the same pedigree. The appellant had suggested that the said bank draft being a foreign bill of exchange was required to meet the conditions precedent as provided in section 51(2) of the Bills of Exchange Act, Cap. 35, Laws of the Federation, 1990, so as to sustain the instant suit. That is to say, that the draft must firstly be protested for non-payment having been dishonoured. For if not protested, the drawer or endorser remained discharged. And therefore, the appellant couldn’t be sued without first protesting the dishonour. I think, the appellant must be mistaken in considering the instant draft drawn in the circumstances as here as a bill of exchange as defined by section 3 of the Bills of Exchange Act. See Capital and Counties Bank v. Gordon (1903) AC 240 at 250. I have no doubt that the instrument is equivalent to a promissory note. See Commercial Banking of Sydney Ltd. v. Mann (1961)AC 1 at 7. In which case, the question of protesting the bill does not arise. As the respondents founded their action in contract and not under the Bill of Exchange it is not necessary to go into the implication of sections 5(2) and n(c) of the said Act on the draft. It is common ground that the draft bounced. Exhibits “SOF4”, “SOF5” and “SOF6” were letters to the respondents to that effect and were received in evidence without objection and given legal effect. All the factors to found a sustainable action in the instant banker/customer on exhibit “SOF1” contract were in place and sufficed without assorting to their rights under the Bill of Exchange. I think this a convenient stage to examine what is a draft. A bank draft is a draft drawn by a bank upon itself, with an undertaking to pay the amount of the draft. See Agbanelo v. Union Bank of Nigeria Ltd. (2000) 7 NWLR (Pt. 666) 534 at 55 C-S; H-A, per Ayoola, JSC, U.B.A. Ltd. v. Ibhafidon (1994) 1 NWLR (Pt. 318) 90, and Lagricom Callo v. UBN (1996) 4 NWLR (Pt. 441) 185. And I may add that a draft can be drawn on another bank where as here, the drawer bank has funds (i.e. as in Banque Nationale De Paris Plc.).
However, I must emphasis that whether the instant action in contract is properly constituted does not stand on whether the said draft is a foreign bill of exchange as contended by the appellant or promissory note as found herein. Besides, suing in contract founded on exhibit “SOF1” has made it unnecessary to consider as a matter of urgency in the event of the dishonour whether it was the drawer or the payee who had to sue for damages. All the same in contracts as here only parties to it have rights and liabilities under it and can sue upon it.
Further to the foregoing, the instant action was in contract and the Banque Nationale De Paris Plc. was not sued in the action. The court below could not therefore, pronounce on who as between the appellant and the Banque Nationale De Paris Plc. was in default as it was not an issue properly on the said contract before the courtbelow. As regards section 57 (1) of the said Act, which dealt with the remedies available to a holder of a dishonoured foreign of exchange again, this question cannot arise as the respondents did not sue the Banque Nationale De Paris Plc. on the foreign bill of exchange. The damages awardable for a breach of a simple banker/customer contract as the instant one on exhibit “SOF1” have to be such as naturally flowed directly from the breach. In the circumstance, the appellant having failed to sustain the points taken above, the issues have to be resolved against it.
Under issues four, seven, eight, nine, ten and eleven, the court below considered the liability of the appellant to the respondents who were awarded N2,121,200.00 for special damages and N5,878,00.00 for general damages. The appellant had objected to the basis for the said awards on firstly as the criteria used were premised upon wrong principles, which imbued the pronouncement by the court below that the instant action was founded in both contract and tort (to wit negligence) when negligence was neither pleaded nor particularised. And secondly, that the special damages were not strictly proved, while the general damages awarded amounted to double compensation. Without venturing into the definition of damages in the abstract, it is settled that the measure of damages in contract, is determined on the principles enunciated in Hadley v. Baxendale (1854) 9 Exch. 341 at 354, which contemplated loss naturally flowing from the breach, that is to say, is incurred as a direct consequence of the breach. See Jamma Engineering v. Wrought Iron (1970) NCLR 295; Taiwo v. Princewill (1961) ANLR 240; Omonuwa v. Wahabi (1976) 4 SC 37.
In tort of negligence the measure of damages is founded on the principle of restitutio in integrum. That is to say, entitlement to such as will put the plaintiff in the position he would otherwise have been but for the happening of the act of negligence. See Liesbosch Dredger v. S. S. Edison (1933) 449 at 459. Clearly, the bases for measure of damages in contract or in tort stand on distinct pedestals. It is now settled that in cases as the instant one for wrongful dishonour of cheques, it becomes necessary to inquire further whether the conduct complained of and as found by the court also caused economic loss. And if so, such economic loss falls within the category of tortious conduct for which the court will award compensation.
I have to pause here, to set out in amplification of my view above the two limbs of the principle governing the award of damages in contract as laid down in Hadley v. Baxendale (supra) per Baron Anderson; the 1st limb runs thus:
“Where two parties have made a contract which one of, them has broken, the damage which the other party ought to receive should be such as may fairly and reasonably be considered either as arising naturally i.e. according to the usual course of things from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of it.”
The other limb of the principle per Baron Anderson not often emphasized runs thus:
“Now if the special circumstances under which the contract was actually made were communicated and thus, made known to both parties, the damages resulting from the breach of such a contract which they should reasonably contemplate would be the amount of injury which would ordinarily flow from a breach of contract under these special circumstances so known and communicated if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be suppose to have had in contemplation, the amount of injury which would arise generally and in the great multitude of cases not affected by special circumstances, from such a breach of contract.” The two limbs of the principle in Hadley v. Baxendale are applicable to the facts of this matter. And they would be brought to bear on this matter.
It is against the foregoing background that one has to examine the statement that the respondents’ action was founded in contract and tort. The respondents averred in their statement of claim that:
“The plaintiffs also suffered loss of reputation with the Barclays Bank Plc.” and went on to support it by evidence. Obvious from the evidence as found by the court is that. the 1st respondent suffered economic loss. The details of which were not set out in the claim. I think that the appellant over sighted the fact that it owed the 1st respondent on the contract a duty of care and skill in handling the issue of the draft quite apart from their banker/customer relationship. Hence it misconceived the trial court’s said pronouncement. I find nothing arise in the statement.
The standard of duty of care and skill owed by the banker has been set out in Agbanelo v. Union Bank of Nigeria Ltd.(2000) 7 NWLR (Pt. 666) 534 SC 127 at 243 per Ayoola, JSC thus: “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 operations within its contract 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. Thus, the duty applies to interpreting, ascertaining and acting in accordance with the instructions of the customer.” (See Cresswell et al; Encyclopaedia of Banking Law. 21), Salanger United Rubber Estates Ltd. v. Cradock (No.3) (1963) 2 AER 1073. In this… the 1st respondent’s specific instructions are clear. It is this breach of duty owed the 1st respondent that is at the heart of this claim. The bankers duty in this regard has also been highlighted in Pagets Law of Banking at page 312, where the learned author stated thus:
“Every authority from Polar v. Hill to Joachinson v. Swiss Bank Corporation and the Bills of Exchange Act alike, recognise that the banker’s primary function and duty is to honour his customers cheques.
Apart from this contractual obligation or as a consequence thereof, the paying banker must remember that
his customer’s credit is or may be seriously informed by the return of one of his cheques dishonoured and the smaller the cheque the greater the possible damage to credit.”
The forgoing abstracts have put the standard of duty of care and skill of a banker on a high note and just as such. Meaning that in breach of contract occasioned by negligence as in wrongful dishonor of cheques as in this matter, the banker would further be liable for the economic loss occasioned by his tortious act.
Having set out the principles to govern the appellant’s liability, if any, I now go on to examine the issue of the damages awarded to the respondents vis-a-vis the facts as found in this matter. The respondents claimed under both special and general damages and I needn’t repeat that the appellant has contended the awards. The power of this court to review and reassess damages where the trial court’s assessments are based upon wrong premises is well settled. See Okoroji v. Ezumah (1961) AER 183.
The special damages claimed, included namely transport expenses to and from the U.K. by 1st class; and hotel accommodation and feeding for 7 days, expected profits from cancelled purchases and lost deposits thereon. It is now settled that special damages have to be particularised and strictly proved by credible evidence of such a character as would suggest that the plaintiff indeed, is entitled to an award under that head. See Agunwa v. Onukwe (1962) 1ANLR 537, (1962) 2 SCNLR 275; Oshinjinrin & Ors. v. Elias (1970) 1 ANLR 153, A.-G., Oyo State v. Fairlakes Hotel Ltd. (No.2) (1989) 5 NWLR (Pt. 121) 255.
There can be no doubt, that the above mentioned expenses would flow naturally from the breach of such contract. Although, it should be mentioned that the claim for transport, accommodation and feeding expenses clearly come within the expenses that naturally flowed from the said breach and also within the contemplation of the parties, they have to be proved strictly. The court below found for the respondents for these expenses incurred by the 1st respondent personally and not from the ?10,000.00. On the facts of the matter, there were evidence in support of the finding. This court will not interfere. The 1st respondent is entitled to be refunded, I uphold them. As for the expected profits from cancelled purchases and lost deposits thereon, these in my view, fall within the second limb of damages as enunciated in Hadley v. Baxendale and are recoverable provided they were shown to be within the contemplation of the parties at the time of entering into the contract. No where on the records is how the ?10,000.00 was to be used mentioned. Indeed, it was the evidence of the 1st respondent that he didn’t. I have perused through the cases of Uwa Printers Ltd. v. Investment Trust Ltd. (supra). A.-G., Oyo State v. Fairlakes Hotel Ltd. (No.2) and Artra Industries Nigeria Ltd. v. N.B.C.I. (supra) cited by the appellant and they seem to settle that a plaintiff claiming expected or anticipated profits has to give credible evidence as to the projected profits. The claim for N2,000,000.00 is to say the least not supported by any credible evidence. They were purchases made on behalf of the 2nd respondent, who as found above was not a party to the aforesaid contract and not a proper party on the said contract in this suit. The award was therefore given on erroneous principle. It is equally two remote.
The court below awarded N5,878,800.00 as general damages. The measurement for such damages are based on the opinion of a reasonable man. The appellant has contested the basis and quantum of the award. One thing though the appellant’s basis for alleging double compensation cannot hold as the award for N2,000,000.00 for the projected profits has now been found unsustainable. The said complaint was directed against that award; having been sustained it is no longer an issue in this matter. It is settled that only a person engaged “in trade” or “in business” may recover sustainable damages for damage to business reputation. See Kpoharor v. National Building Society (1996) 4 AER 119, Gibbons v. Westminster Bank Ltd. (1939) 3 AER 572 and Hariat Balogun v. National Bank Ltd. (1978) 3 SC 155. In other cases of dishonoured cheques, the plaintiff has to plead and prove any damage suffered or is entitled to nominal damages.
In the instant matter, the sum of N5,848,800.00 was awarded to the respondents based on damage to their business reputation. But I have above already, reached the conclusion that the 2nd respondent had no standing to sue in this matter and so in this matter this item of the award cannot stand. The joinder of the respondents in the action presuppose a joinder of causes of action and this position is not supported by my conclusion on issue one. Although, it must be conceded that a misjoinder need not defeat the suit. More importantly, all the materials to reach a fair and reasonable award for the 1st respondent in this matter are before this court and in my view as it serves no purpose remitting this aspect of the claim to the lower court to determine nor order separate trials de novo I have decided to go ahead to assess the damages due to the 1st respondent under this head of the claim.
The 1st respondent gave unrebutted evidence of the damage done to his personal and business reputation as irreparable. The loss of integrity with his London banker – the Barclays Bank London, where he no longer was allowed to draw from uncleared effects nor granted credit facilities as previously was the case. And that he had lost reputation and integlity in his business – not made any easier by the fact that similar incident had happened in 1991, when the appellant caused the dishonour of his cheque. The trial court believed him and I see no reasons to disagree or interfere. Taking all the unrebutted and credible evidence as well as the surrounding circumstances arising from the breach of the said contract, I assess the 1st respondent’s entitlement to general damages under this head as N878,800.00. All told I find the 1st respondent’s entitlement to a total sum of N1,000,000.00 made up as follows:
(1) Transportation to and from U.K: N33,000.00
(2) Hotel accommodation and feeding for 7days at N26,000.00 per day N88,200.00,
Total : N121,200.00,
General damages N878,800.00 N1,000.000.00.
I have to adjourn here that, in dealing with the other issues raised in this matter, I have adequately covered issue twelve. Also I find the issues of the conversion from pounds sterling and the devaluation of the Naira as circumstantial matters and of no moment not affecting the assessment of damages in this matter. In conclusion, this appeal partly succeeds. The 2nd respondent for the avoidance of doubt has no standing to sue in this matter, not being a party to the aforesaid contract. The award of damages in favour of the respondents by the court below namely in the sum of N2,000,000.00 as expected thereon profits and N5,878,800.00 as general damages not having arisen from the breach of the said contract are hereby set aside. Otherwise, the judgment of the court below is hereby affirmed subject to the orders as to special and general damages made in favour of the 1st respondent as set out above.
I make no order as to costs.
Other Citations: 2002)LCN/1184(CA)
