Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R

NIGERIAN BANKING LAW REPORTS

[1994 – 1996]

VOLUME 6 (PART I)

To be cited as: [1994 – 1996] 6 N.B.L.R. (PART I)

Nigeria Deposit Insurance Corporation

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© 2009 Nigeria Deposit Insurance Corporation, published by LexisNexis (Pty) Ltd under licence ISSN 1595-1030 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including electronic, mechanical, photocopying and recording, without the written permission of the copyright holder, application for which should be addressed to the publisher. Such written permission must also be obtained before any part of this publication is stored in a retrieval system of any nature. Whilst every effort has been made to ensure that the information published in this work is accurate, the editors, publishers and printers take no responsibility for any loss or damage suffered by any person as a result of the reliance upon the information contained therein.

Printed and bound by Interpak Books Pietermaritzburg EDITORIAL BOARD

1. Professor J.O. Anifalaje Chairman Faculty of Law, University of Ibadan 2. Alheri Bulus Nyako Editor-in-Chief Board Secretary/Director, Legal Department N.D.I.C. 3. Michael Olufemi Olaitan Member Legal Practitioner 4. Ahmed Almustapha Member Registrar-General Corporate Affairs Commission 5. Gabriel Olukayode Kembi Member Legal Practitioner 6. Adekunle Oladapo Omowole Member Legal Practitioner Corporate Affairs Commission 7. Nasiru Tijani Member Legal Practitioner Senior Lecturer, Nigerian Law School 8. Belema A. Taribo Member Legal Practitioner N.D.I.C. 9. Moses Ter-llumun Adaguusu Member Legal Practitioner Corporate Affairs Commission 10. Dan Ike Agwu Secretary Legal Practitioner N.D.I.C.

iii LIST OF JUSTICES OF THE SUPREME COURT OF NIGERIA AS AT NOVEMBER 30TH, 2007

1. HON. JUSTICE IDRIS LEGBO KUTIGI, CON (Chief Justice of Nigeria) 2. HON. JUSTICE SYLVESTER UMARU ONU, CON 3. HON. JUSTICE ALOYSIUS IYORGYER KATSINA-ALU, CON 4. HON. JUSTICE NIKI TOBI, CON 5. HON. JUSTICE DAHIRU MUSDAPHER, CON 6. HON. JUSTICE GEORGE ADESOLA OGUN- TADE, CON 7. HON. JUSTICE SUNDAY AKINOLA AKIN- TAN, CON 8. HON. JUSTICE ALOMA MARIAM MUK- HTAR, CON 9. HON. JUSTICE MAHMUD MOHAMMED, CON 10. HON. JUSTICE WALTER SAMUEL NKANU ONNOGHEN, CON 11. HON. JUSTICE IKECHI FRANCIS OGBUAGU, CON 12. HON. JUSTICE FRANCIS FEDODE TABAI, CON 13. HON. JUSTICE IBRAHIM TANKO MUHAM- MAD, CON 14. HON. JUSTICE PIUS OLAYIWOLA ADEREMI, CON 15. HON. JUSTICE CHRISTOPHER MITCHELL CHUKWUMA-ENEH, CON

iv SENIORITY LIST OF JUSTICES OF THE COURT OF APPEAL AS AT NOVEMBER 30TH, 2007 1. HON. JUSTICE UMARU ABDULLAHI, CON (President) 2. HON. JUSTICE ISA AYO SALAMI, (OFR) 3. HON. JUSTICE JAMES OGENYI OGEBE, (OFR) 4. HON. JUSTICE RABIU DANLAMI MUHAM- MAD, (OFR) 5. HON. JUSTICE RAPHAEL OLUFEMI ROW- LAND, (OFR) 6. HON. JUSTICE MUHAMMAD S. MUNTAKA COOMASIE 7. HON. JUSTICE DALHATU ADAMU, (OFR) 8. HON. JUSTICE BABA ALKALI BA’ABA 9. HON. JUSTICE SAKA ADEYEMI IBIYEYE 10. HON. JUSTICE ZAINAB ADAMU BUL- KACHUWA 11. HON. JUSTICE SULEIMAN GALADIMA 12. HON. JUSTICE VICTOR AIMEPOMO O. OM- AGE 13. HON. JUSTICE JOHN AFOLABI FABIYI 14. HON. JUSTICE KUMAI BAYANG AKAAHS 15. HON. JUSTICE OLUFUNLOLA OYEOLA ADEKEYE 16. HON. JUSTICE M. DATTIJO MUHAMMAD 17. HON. JUSTICE AMIRU SANUSI 18. HON. JUSTICE CLARA BATA OGUNBIYI 19. HON. JUSTICE ISTIFANUS THOMAS 20. HON. JUSTICE JAFARU MIKA’ILU 21. HON. JUSTICE AMINAT ADAMU AUGIE 22. HON. JUSTICE ABUBAKAR ABDULKADIR JEGA 23. HON. JUSTICE STANLEY SHENKO ALAGOA 24. HON. JUSTICE MONICA DONGBAN- MENSEM

v 25. HON. JUSTICE NWALE SYLVESTER NGWUTA 26. HON. JUSTICE MOHAMMED LAWAL GARBA 27. HON. JUSTICE JEAN OMOKRI 28. HON. JUSTICE TIJANI ABDULLAHI 29. HON. JUSTICE UWANI M. ABBA AJI 30. HON. JUSTICE MARY PETER ODILI 31. HON. JUSTICE KUDIRAT M.O. KEKERE- EKUN 32. HON. JUSTICE MOHAMMED LADAN TSAMIYA 33. HON. JUSTICE RAPHAEL CHIKWE AGBO 34. HON. JUSTICE BODE RHODE VIVOUR 35. HON. JUSTICE SOTONYE DENTON-WEST 36. HON. JUSTICE PAUL A. GALINJE 37. HON. JUSTICE JIMI OLUKAYODE BADA 38. HON. JUSTICE OLUKAYODE ARIWOOLA 39. HON. JUSTICE O. GEORGE SHOREMI 40. HON. JUSTICE HELEN M. OGUNWUMIJU 41. HON. JUSTICE OYEBISI FOLAYEMI OMOL- EYE 42. HON. JUSTICE ADZIRA GANA MSHELIA 43. HON. JUSTICE ABDU ABOKI 44. HON. JUSTICE AHMAD O. BELGORE 45. HON. JUSTICE ALFRED P.E. AWALA 46. HON. JUSTICE JUMMAI HANATU SANKEY 47. HON. JUSTICE IBRAHIM MOH’D M. SAU- LAWA 48. HON. JUSTICE ALI A.B. GUMEL 49. HON. JUSTICE HUSSEIN MUKHTAR 50. HON. JUSTICE MOJEED A. OWOADE 51. HON. JUSTICE UZO I. NDUKWE-ANYANWU 52. HON. JUSTICE JOHN I. OKORO 53. HON. JUSTICE CHIDI NWAOMA UWA 54. HON. JUSTICE IGNATIUS IGWE AGUBE

vi SENIORITY LIST OF JUSTICES OF THE FEDERAL HIGH COURT OF NIGERIA AS AT NOVEMBER 30TH, 2007

1. HON. JUSTICE R.N. UKEJE (Chief Judge) 2. HON. JUSTICE A. MUSTAPHA 3. HON. JUSTICE D.D. ABUTU 4. HON. JUSTICE I.N. AUTA 5. HON. JUSTICE M.A. EDET 6. HON. JUSTICE A.A. ABDU-KAFARATI 7. HON. JUSTICE SOBA 8. HON. JUSTICE O.J. OKEKE 9. HON. JUSTICE S. YAHAYA 10. HON. JUSTICE A. BELLO 11. HON. JUSTICE A.O. AJAKAIYE 12. HON. JUSTICE F.F. OLAYIWOLA 13. HON. JUSTICE ADAMU HOBON 14. HON. JUSTICE J.T. TSOHO 15. HON. JUSTICE S.J. ADAH 16. HON. JUSTICE CHUKWURA NNAMANI 17. HON. JUSTICE R.O. NWODO 18. HON. JUSTICE G.C. OKEKE 19. HON. JUSTICE G.K. OLOTU 20. HON. JUSTICE J.E. SHAKARHO 21. HON. JUSTICE L. AKANBI 22. HON. JUSTICE C.M. OLATOREGUN 23. HON. JUSTICE BINTA F.M. NYAKO 24. HON. JUSTICE A. LIMAN 25. HON. JUSTICE S. YAHUZA 26. HON. JUSTICE C. ARCHIBONG 27. HON. JUSTICE I. EJIOFOR 28. HON. JUSTICE A.I. CHIKERE 29. HON. JUSTICE M.L. SHUAIBU 30. HON. JUSTICE SALIU SAIDU

vii 31. HON. JUSTICE G.O. KOLAWOLE 32. HON. JUSTICE A.O. FAJI 33. HON. JUSTICE B. BELLO ALIYU 34. HON. JUSTICE B. I MOLOKWU 35. HON. JUSTICE A.F. ADETOKUNBO- ADEMOLA 36. HON. JUSTICE CHUDI NWOKORIE 37. HON. JUSTICE M.I. AWOKULEHIN 38. HON. JUSTICE R.N. OFILI-AJUMOGOBIA 39. HON. JUSTICE L. ALLAGOA 40. HON. JUSTICE A.O. OGIE 41. HON. JUSTICE BABS KUEWUMI 42. HON. JUSTICE UMAR M. GARBA 43. HON. JUSTICE NYAURE BABA 44. HON. JUSTICE A.R. MOHAMMED 45. HON. JUSTICE T. ABUBAKAR

viii THE NIGERIAN BANKING SYSTEM 1. The Development of Banking in Nigeria The historical development of the financial system in Nige- ria dates back to 1892 when modern banking business commenced and a formal and institutional channel of saving mobilization was introduced into the economy with the establishment of the African Banking Corporation (ABC). The operation of ABC was later taken over in 1894 by the British Bank of West Africa (which later became Standard Bank) and subsequently, First Bank of Nigeria. Owing to the colonial heritage, the pioneer commercial banks in Nigeria were of foreign origin and their operations favoured finance of foreign trade and commerce. Thereafter, several other foreign and a host of indigenous banks were established. The establishment of indigenous banks was initially propelled largely by nationalistic consciousness rather than the existence of relevant resources, including basic skilled manpower, for running such institutions. Consequently most of the early indigenous banks col- lapsed in rapid succession. Banks that failed during the early stage of the evolution of the Nigerian financial system were largely those with problems of inadequate capital, poor management, and fraudulent practices, among other factors. An important feature of the Nigerian financial system, especially before the establishment of the Central Bank of Ni- geria (CBN), was small scope of operations of participating foreign institutions and the complete absence of any form of institutional regulatory framework which would provide the necessary guide for both the operations and orderly development of the system. These were some of the reasons behind the slow development of the financial system during the pre-CBN era. The situation however changed from 1958 when the CBN was established. Since then, series of efforts have been made

ix [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports by the CBN and other relevant authorities to promote the growth and development of the Nigerian financial system. For example, the need to develop the system and create an avenue for investment of short term funds informed the issue by the CBN in 1960 of Treasury Bills as a supplement to Commercial Papers that were already in the market. Other money market instruments after the establishment of the CBN but prior to the introduction of the Structural Adjust- ment Programme (SAP) in 1986 included Treasury Certifi- cates in 1968, Certificates of Deposit in 1975 and the Bank- ers’ Unit Fund as well as Stabilization Securities in 1976. The establishment of the CBN also aided the development of the capital market. This was achieved by ensuring the emer- gence of the securities markets and instruments (primary and secondary) and by promoting the establishment of development banks. Following the adoption of the SAP in 1986, and the subsequent deregulation of the financial system, the banking system witnessed radical changes. Apart from the introduction of measures and instruments to deregulate the financial services industry, the techniques and the range of products offered by the industry, changed significantly. The major objective of the deregulation was to enhance economic efficiency and effective resource allocation through service- driven competition and improvement in quality and spread of financial services delivery. On July 6th, 2004 the Governor of CBN announced a banking reform programme aimed at strengthening and con- solidating the banking system. The reform is expected to address the safety of depositors funds, enable the banking sector play an active developmental role in the economy and transform Nigerian banks into competitive players in the Af- rican and Global financial system.

x [1994 – 1996] 6 N.B.L.R. (PART I)

The Nigerian Banking System

2. The Nigeria Deposit Insurance Corporation One of the key measures introduced during the era of deregulation of the banking sector was the establishment of the Nigeria Deposit Insurance Corporation (N.D.I.C.), with the promulgation of Decree No. 22 of 1988 now Cap 301 Laws of the Federation 1990, (as amended). The NDIC was established to insure all the deposit liabilities of licenced banks, promote banking stability and a sound financial system. Al- though the NDIC enabling Act was promulgated in 1988, the Corporation only commenced operations in March, 1989. The Nigeria Deposit Insurance Scheme was introduced to provide a further layer of protection to depositors and complement the role of prudent bank management as well as the Central Bank of Nigeria’s (CBN’s) supervisory activities in ensuring a safe and sound banking system. It was also considered as an additional framework to serve as a vehicle for addressing some of the challenges that followed the deregulation of the financial system under the SAP. Prior to the establishment of the NDIC, the Government had played the role of what in industry parlance is referred to as an implicit insurer, by bailing out troubled banks in its bid to protect depositors. With deregulation, an explicit Deposit Insurance Scheme (DIS) became imperative. The establishment of NDIC was also informed by the change in government bank-support policy, the bitter experiences of prior bank failures in Nigeria and the lessons of other countries with bank deposit insurance schemes. The scheme aims at increasing the competitive efficiency of the banking system as well as reducing the system’s vulnerability to destructive runs, panic-induced shocks by reinforcing depositors’ confidence in the nation’s financial system. The mission of the Corporation is to protect depositors through effective supervision of insured institutions, provision of financial and technical assistance to eligible insured institutions, prompt payment of guaranteed sums and the orderly resolution of failed financial institutions.

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Nigerian Banking Law Reports

The Corporation currently acts as the Liquidator of thirty four (34) banks out of a total of thirty six (36) banks whose operating licenses were revoked by the Governor of the CBN. All depositors of the banks in liquidation who have come forward to file their claims have been paid their insured deposits while liquidation dividends making up 100% of total uninsured deposits have been declared and paid to depositors of ten (10) banks in Liquidation. In September 1997, the Corporation commenced publication of the Failed Banks Tribunals Law Reports (FBTLR) which contained only reported decisions of the Tribunal established under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994 and decisions of the Special Appeal Tribunal established under the Recovery of Public Property (Special Military Tribunal) Decree, 1984. In 1999, with the return to civil rule, the Corporation restructured the publication into a compendium of decisions of all banking matters given by our superior courts of record from 1933 to date. This gave rise to the birth of the Nigerian Banking Law Reports (NBLR). Nigeria Deposit Insurance Corporation November, 2005

xii FOREWORD

Banking is the most important sub-sector of the economy of any nation. Banks facilitate economic transactions between various national and international economic units and by so doing encourage trade, commerce and industry. It is widely acknowledged that a sound and efficient financial industry, of which banks constitute the major segment, would promote growth of the real sector while the opposite is the case if the financial sector is repressed and inefficient. Therefore the Law of Banking assumes a position of preeminence in economic development and this underscores the importance of a Law Report on the subject. The efforts of the Nigeria Deposit Insurance Corporation in the development of the Law of Banking through the publication of a banking law report started over 8 years ago. It would be recalled that in September, 1997, the Corporation launched the Failed Banks Tribunal Law Reports (F.B.T.L.R.) at the International Conference Centre, Abuja. Although the Failed Banks Law Reports were short-lived following the advent of civil rule in 1999, they nonetheless served as a veritable reference material for Judges, Legal Practitioners, Jurists, Bankers, Students and the general public. It is for the foregoing reason that when the Corporation decided to expand the scope of the publication by including the decisions of the Supreme Court and the Court of Appeal on banking matters and re-named it the Nigerian Banking Law Reports (N.B.L.R.), I did not hesitate in giving my consent. The NBLR is a compendium of case law on Nigerian banking from 1933 to date. The first batch of the compendium contains cases decided between 1933-2002 which I understand would continue to 2004. Thereafter, the reports would be published regularly. This initiative will prove

xiii [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports invaluable to users who would not have initiative to wade through different law reports when conducting research on Nigerian banking case law. The publication of the NBLR is one reliable means of dis- seminating information and knowledge of banking law and practices to depositors and other members of the public as part of the Corporation’s contribution to safe and sound banking practices. Hence, it is well known that the Corpora- tion did not embark upon publication of the NBLR in order to make profit. Specialized law reports are very rare mainly because of the tedium, great expenses, time and labour required to produce them. However, when available, such reports generate considerable public interest. I am therefore pleased that the presentation of the Nigerian Banking Law Reports has become a reality. The laudable decision of the Management of the NDIC to shoulder this onerous burden for the Nigerian Banking industry is a practical example of the social as well as corporate responsibilities expected of modern Corpora- tions. I have no doubt in my mind that the publication will en- dure and I am therefore pleased to recommend the Nigerian Banking Law Report, which is a worthy and befitting legacy for posterity, especially the world of learning, to all and sundry.

Hon. Justice Mohammed Lawal Uwais, GCON Chief Justice of Nigeria November, 2005

xiv PREFACE TO THE NIGERIAN BANKING LAW REPORTS The decision of the Nigeria Deposit Insurance Corporation to publish the Nigerian Banking Law Report has its origin from its involvement in the implementation of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act 1994. The Law was promulgated by the then Military Government with the combined objectives of recovering the debts owed to failed banks and prosecuting directors, officers and customers of banks who were suspected to have committed banking malpractices, which led to the collapse of most of the failed banks. Furthermore, in 1994, when the Corporation was appointed as the Liquidator to carry out the liquidation of some failed banks, it was observed that there were hardly any records relating to the winding up of banks that had failed in the past. There was also no sufficient data on the causes of the past bank failures. The Corporation therefore took the initiative, in September, 1997 to report and publish decisions of the Failed Banks Tribunal established under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, 1994. This effort culminated into the publication of the Failed Banks Tribunal Law Reports (FBTLR). Thus, the Corporation was motivated by the need to place on permanent record the lessons from the new wave of bank failures/distress, particularly with regard to the causes of such failures/distress and efforts made to resolve such failures. Hitherto, the absence of proper documentation relating to the bank failures experienced in the early fifties had made it exceedingly difficult for practitioners and researchers to make references to such failures. The decision to publish the FBTLR was to ensure that the mistakes of the past were not repeated, through elaborate documentation of the recent failures, the essence of which were captured in the decisions of the Failed Banks Tribunal. xv [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

However, with the return to democratic rule in May, 1999, the Failed Banks Act was amended by the Tribunals (Certain Consequential Amendment, etc) No. 62 of 1999, which ab- rogated the Tribunal. The civil and criminal jurisdictions of the Tribunal were accordingly transferred to the Federal High Court. Consequently, the title of the Publication was changed to Nigerian Banking Law Reports. Furthermore, in response to the new democratic dispensation, the Corporation decided to expand the scope of the publication into a compendium containing decisions of the Supreme Court, Court of Appeal as well as Federal and State High Courts on banking matters from 1933 to date in order to provide a comprehensive data base for all banking related cases decided by the superior courts of record. Also in order not to miss the tremendous achievements recorded by the Failed Banks Tribunal during their relatively short tenure, their decisions have been included in the compendium thereby making the NBLR very comprehensive. In addition, there is an index for the compendium up to 2002, which would soon be updated to 2004 and thereafter, it would be published on regular basis. It is therefore my hope that legal practitioners, my Lords the honourable justices and judges, distinguished scholars and law professors, bankers, students and the general public would find this initiative useful. I would like to express my profound appreciation to the Editorial Board of the Nigerian Banking Law Reports under the distinguished chairmanship of Prof. Anifalaje, an erudite professor of law and the Dean of the Faculty of Law, Uni- versity of Ibadan ably assisted by seasoned Legal Practitio- ners and staff of the Legal Department of the Corporation, for their patriotic commitment, diligence and ingenuity for details, that went into the production of the NBLR. They left no stone unturned in bringing the Corporation’s dream of making this worthy contribution to legal knowledge and xvi [1994 – 1996] 6 N.B.L.R. (PART I)

Preface to the Nigerian Banking Law Reports research a reality. Their commitment in ensuring the completion of the project is highly commendable. Management will on its part do everything possible to ensure that publication of the Nigerian Banking Law Reports (NBLR) is sustained.

G.A. Ogunleye, OFR Managing Director/Chief Executive November, 2005

xvii

TABLE OF CONTENTS

Index of Table of Cases Reported...... xxi Index of Subject Matter...... xxiii Index of Nigerian Cases referred to ...... xxxv Index of Foreign Cases referred to...... xlv Index of Nigerian Statutes referred to...... li Index of Foreign Statutes referred to ...... lvii Index of Nigerian Rules of Court referred to...... lix Index of Books referred to ...... lxi

xix

TABLE OF CASES REPORTED Page 1. A.C.B. Ltd v. Alao...... 64 2. Allied Bank of Nig. Ltd v. Akubueze...... 364 3. B.O.N. Ltd v. Akorede...... 85 4. B.O.N. Ltd v. Lake Chad Research Institute ...... 386 5. Egbunike v. A.C.B. Limited ...... 330 6. F.B.N. Ltd v. A.P. Ltd ...... 547 7. F.B.N. Ltd v. Karusta Akporido...... 653 8. F.B.N. Plc v. Ibennah ...... 397 9. F.M.B. Ltd v. N.D.I.C...... 425 10. F.R.N. v. Anyaegbunam...... 662 11. F.R.N. v. Ifegwu...... 700 12. F.R.N. v. Odogwu (No. 1)...... 561 13. F.S.B. Int. Bank Ltd v. Imano Nig. Ltd ...... 201 14. Koiki v. F.R.N. Plc...... 1 15. Kotoye v. Saraki...... 100 16. Lagricom Co Ltd v. U.B.N. Ltd ...... 516 17. N.B.N. Ltd v. Savol W.A. Ltd ...... 23 18. Progress Bank Nig. Ltd v. Ugonna Nig. Ltd ...... 462 19. Republic Bank Ltd v. C.B.N...... 482 20. U.B.A. Ltd v. Citymark W/A Ltd ...... 505 21. U.B.A. Ltd v. Michael O.Abimbolu and Co...... 445 22. U.B.N. Ltd v. B. U. Umeh and Sons Ltd ...... 273 23. U.B.N. v. Nwoye...... 641 24. Uba v. U.B.N. Plc ...... 260 25. Yusuf v. Co-operative Bank Ltd...... 237

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INDEX OF SUBJECT MATTER

BANKING Accounts – Clause in agreement stating that “all accounts opened in my/our name with your Bank including any accounts in foreign currency constitute a single combined Current Account” – Meaning of – Accounts – Customer operating two Accounts in different names - When accounts can be merged – When they cannot be merged Allied Bank of Nig. Ltd v. Akubueze [1994 – 1996] 6 N.B.L.R. (PART I) 364 “Bank draft of Exchange”, “Cheque” – Meaning of A.C.B. Ltd v. Alao [1994 – 1996] 6 N.B.L.R. (PART I) 64 Bank drafts issued by banker in favour of a third party – Whether Promissory Notes or Bills of Exchange – When a bank draft will not be regarded as cheque – Whether payee of bank drafts could compel banker to honour its drafts in furtherance of an act prohibited by statute – Whether Exchange Control Act applies to foreigners A.C.B. Ltd v. Alao [1994 – 1996] 6 N.B.L.R. (PART I) 64 Banks and Other Financial Institutions Decree No. 25 of 1991 – Section 11 thereof – Scope of – Action that cannot be brought in Court – Interpretation of – Whether retrospective Kotoye v. Saraki [1994 – 1996] 6 N.B.L.R. (PART I) 100 Banker’s draft – Meaning of Lagricom Co Ltd v. U.B.N. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 516 Banker and Customer Relationship – Action for recovery by Customer – Banker alleged that customer’s Ac- count was dormant and Customer’s action was statute barred – When cause of action accrues to Customer Yusuf v. Co-operative Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 237

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BANKING – continued Banker and Customer Relationship – Cheque – Failure to pay Customer’s Cheque – When bank will be liable – Paying in cheque into customer’s account – Whether puts account of customer in funds without clearance U.B.N. v. Nwoye [1994 – 1996] 6 N.B.L.R. (PART I) 641 Banker and Customer Relationship – Customer instructed Banker to pay a third party upon performance of the contract – Banker confirmed to the third party its will- ingness to pay as instructed by customer – Third party performed the contract and requested Banker to pay Banker claimed that Customer countermanded payment and refused to pay third party Whether written confirmation of Banker to pay third party could be countermanded by Customer N.B.N. Ltd v. Savol W.A. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 23 Banker and Customer Relationship – Customer maintained two Accounts with different branches of the Banker – Banker disputed the credit balances by Cus- tomer – What customer and Banker should prove to establish the balance in Customer’s Account Yusuf v. Co-operative Bank Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 237 Banker and Customer Relationship – Nature of – Money credited to Customer’s Current Account – Obligation of Bank not to pay out money from Customer’s Ac- count – Limitations – When customer’s instruction unnecessary F.B.N. Ltd v. A.P. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 700 Banker/Customer relationship – Nature of Uba v. U.B.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 260 Bill of Exchange – Effect of forged signature on bill B.O.N. Ltd v. Lake Chad Research Institute [1994 – 1996] 6 N.B.L.R. (PART I) 386 Banking licence – Nature of Republic Bank Ltd v. C.B.N. [1994 – 1996] 6 N.B.L.R. (PART I) 482 xxiv [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Subject Matter

BANKING – continued Bill of Exchange – Non-presentation of – Effect Eg- bunike v. A.C.B. Limited [1994 – 1996] 6 N.B.L.R. (PART I) 330 Bill of Exchange – Promissory Note – Definition of – Where dishonoured – Right of action thereon – Effect of dishonour on the instrument – Rights of holder, drawer or indorser on the instrument U.B.A. Ltd v. CitymarkW/A Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 505 Bill of Exchange – Promissory Note – Indorsee of promissory note – Extending time for drawer to pay without consent of indorser – Effect on obligations of indorser under the instrument U.B.A. Ltd v. City- markW/A Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 505 Bill of Exchange – The proper interpretation of section 41 (3)(b) of the Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 – How notice of dishonour can be dispensed with under section 50(2)(c)(i) of the Act Egbunike v. A.C.B. Limited [1994 – 1996] 6 N.B.L.R. (PART I) 330 Cause of action – When does cause of action accrue in action by Banker to recover loan or overdraft F.B.N. Ltd v. Karusta Akporido [1994 – 1996] 6 N.B.L.R. (PART I) 653 Cheque – Amount on uncleared cheque credited to customer’s account – Duty of customer to reimburse bank if cheque dishonoured – Right of collecting Bank to debit account of customer F.B.N. Ltd v. A.P. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 700 Cheque – Dishonour of when account is in funds – Breach of contract Progress Bank Nig. Ltd v. Ugonna Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 462

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BANKING – continued Cheque – Proceeds of paid into account – When can be available to customer Progress Bank Nig. Ltd v. Ugonna Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 462 Cheques – Wrongful dishonour – Recovery of damages therefore – Principles governing – Substantial damages Allied Bank of Nig. Ltd v. Akubueze [1994 – 1996] 6 N.B.L.R. (PART I) 364 Collecting Bank – Duty of F.B.N. Ltd v. A.P. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 700 Combination of accounts – Principles applicable Uba v. U.B.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 260 Contract – Liability of endorser of promissory note – Scope of promissory note – Difference between Bill of Exchange and Promissory Note F.S.B. Int. Bank Ltd v. Imano Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 201 Customer having different accounts in his own right – Meaning of Uba v. U.B.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 260 Damages for wrongful dishonour of cheque drawn on solicitor’s client account F.B.N. Plc v. Ibennah [1994 – 1996] 6 N.B.L.R. (PART I) 397 Deposit of money in bank pursuant to court order – Ap- plicable rate of interest payable thereon – Who deter- mines – How computed Koiki v. F.R.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 1 Forged cheque – Banker honouring forged cheque – Whether entitled to debit his customers account with money so paid B.O.N. Ltd v. Lake Chad Research Institute [1994 – 1996] 6 N.B.L.R. (PART I) 386 Foreign correspondent account – Necessity for control account – Failure to keep control account – Effect F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561

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Index of Subject Matter

BANKING – continued Foreign exchange transaction – Need for proper documentation – MD/Chief Executive of bank also MD/Chief Executive of other companies – Duties and interests likely to create conflicts – Failure to declare the fact of holding of dual positions and the likelihood of conflict of interest to banks board – Section 11(4) and 11 (7) Banking Act, 1969 – Offences F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561 Holder of shares in a bank – Statute prohibiting legal action challenging the ownership of shares registered in favour of shareholder of a bank – Whether such statute ousts the jurisdiction of Court from hearing suits asserting that shares in a bank are held in trust – Sec- tion 11 Banks and Other Financial Institutions Decree No. 25 of 1991 Kotoye v. Saraki [1994 – 1996] 6 N.B.L.R. (PART I) 100 Interest rate payable on deposits in a bank – How determined – Section 15(1) and (2) Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 construed Koiki v. F.R.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 1 Limitation of action – When time begins to run for purpose of limitation law F.B.N. Ltd v. Karusta Ak- porido [1994 – 1996] 6 N.B.L.R. (PART I) 653 Loan and overdraft – Limitation of action in loan or overdraft transaction – When time begins to run – How to successfully plead – Effect B.O.N. Ltd v. Akorede [1994 – 1996] 6 N.B.L.R. (PART I) 85 Loan and overdraft – Refusal of customer to repay – Condition precedent to bank instituting an action therefore B.O.N. Ltd v. Akorede [1994 – 1996] 6 N.B.L.R. (PART I) 85 Loans, advances and interest – Recovery of – Limitation of time – When does time start to run U.B.A. Ltd v. Michael O.Abimbolu and Co [1994 – 1996] 6 N.B.L.R. (PART I) 445

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BANKING – continued Negligence – When a bank held negligent Uba v. U.B.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 260 Negotiable Instruments – Holder in due course of Bill of Exchange or promissory Note, Accepter of Bill of Ex- change – Liability of an endorser F.S.B. Int. Bank Ltd v. Imano Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 201 Offences – Chairman/Chief Executive of bank permitting to be outstanding unsecured advances amounting to over N 50,000 to his respective companies – Breach of section 20(2) (a)(ii) Banks and Other Financial In- stitution Decree No. 25 of 1991 – section 45(1) Banks and Other Financial Institution Decree No. 25 of 1991 F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561 Offences – Failure by bank to keep proper Books of Ac- count in respect of all its transactions – Breach of section 16(1) Banking Act 1969 and punishable under section 16(4)(a) Banking Act, 1969 – Liability of Bank therefore F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561 Offences – Grant of credit facilities by bank to a customer company – MD/Chief Executive of Bank also MD/Shareholder in customer company – Section 20(2)(a)(ii) Banks and Other Financial Institution De- cree No. 25 of 1991 – section 46(a) Banks and Other Financial Institution Decree No. 25 of 1991 considered – Breach of requirement of section 19(3)(a) Banks and Other Financial Institution Decree No. 25 of 1991 as punishable under section 46(a) Banks and Other Financial Institution Decree No. 25 of 1991 – Presumption of guilt on Managing Director by virtue of section 45(1) Banks and Other Financial Institution Decree No. 25 of 1991 – Breach of section 10(2) F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561 [1994 – 1996] 6 N.B.L.R. (PART I)

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Index of Subject Matter

BANKING – continued Offences – Granting credit facility without security – Breach of section 18(2) Banks and Other Financial Institutions Decree No. 25 of 1991 – Failure by Direc- tor to declare personal interest in the credit facilities to Bank’s board – Breach of section 18(3) of the Banks and Other Financial Institutions Decree No. 25 of 1991 – Effect: section 18(9) Banks and Other Fi- nancial Institutions Decree No. 25 of 1991 considered – Making of false accounting entries by understating customers indebtedness – Intent to mislead regulatory authorities – section 438(b) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – Offence – Agency – Forgery of credit vouchers and making of false accounting entries – Employee doing so pursuant to management policy of bank and superiors’ instructions – Whether personally liable – Section 438(3) Criminal Code Act Cap 77 Laws of the Fed- eration of Nigeria, 1990 and section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Fi- nancial Malpractices in Banks Decree No. 18 of 1994 (as amended) considered – section 18(2) Banks and Other Financial Institutions Decree No. 25 of 1991 – Grant of credit facilities without security – Penalty therefore – Fraudulent grant of credit facilities by bank to customer – Breach of section 516 Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – Sentencing after conviction – Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) and Banks and Other Financial Institutions Decree No. 25 of 1991 – Relevant considerations F.R.N. v. Ifegwu [1994 – 1996] 6 N.B.L.R. (PART I) 700 Offences – Non-disclosure of interest by Directors contrary to section 11(1) Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 – What prosecution must show – Offence under section 18(3) banks and Other Financial institutions Decree No. 25 of 1991 – Ingredients of F.R.N. v. Anyaegbunam [1994 – 1996] 6 N.B.L.R. (PART I) 662

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BANKING – continued Ordinary cheque and bank draft – Difference between – Whether Banker may refuse to honour Bank Draft Lagricom Co Ltd v. U.B.N. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 516 Placement – Whether a credit facility – Applicable rules thereto F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561 Promissory Note – Liability of maker, endorser and holder in due course F.S.B. Int. Bank Ltd v. Imano Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 201 Stealing – Section 390(7) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561 Winding-up petition – Liquidator – Whether can present petition for winding up – sections 410,425 Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990, [1994–1996] 6 N.B.L.R. (PART I) section 38 Banks and Other Financial Institution De- cree No. 25 of 1991 F.M.B. Ltd v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART I) 425 Wrong dishonour of cheque of trader – Whether trader needs prove actual loss Allied Bank of Nig. Ltd v. Akubueze [1994 – 1996] 6 N.B.L.R. (PART I) 364 Wrongful dishonour of cheque – Measure of damages awarded for wrongful dishonour of bank draft F.B.N. Plc v. Ibennah [1994 – 1996] 6 N.B.L.R. (PART I) 397 BILLS OF EXCHANGE Exchange Control Act – Application and operation of – Scope of A.C.B. Ltd v. Alao [1994 – 1996] 6 N.B.L.R. (PART I) 64 COMPANY LAW Registered shareholder – Scope of rights and privileges of Kotoye v. Saraki [1994 – 1996] 6 N.B.L.R. (PART I) 100 xxx [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Subject Matter

COMPANY LAW – continued Trustees of shares in a Company – Scope of power, rights and privileges of Kotoye v. Saraki [1994 – 1996] 6 N.B.L.R. (PART I) 100 Winding up-petition – Who can present – Whether provisional liquidator appointed under section 38 Banks and Other Financial Institution Decree No. 25 of 1991 can present F.M.B. Ltd v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART I) 425 CONTRACT Construction of terms of – Duty of Court U.B.N. Ltd v. B.U. Umeh and Sons Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 273 Exemption Clause therein – Protection afforded – Inter- pretation of – Use of the “Construction” U.B.N. Ltd v. B.U. Umeh and Sons Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 273 Illegal Contract – Where it is evident that contract is tainted with illegality – Effect – Whether can be enforced A.C.B. Ltd v. Alao [1994 – 1996] 6 N.B.L.R. (PART I) 64 Privity of contract – Whether a third party can enforce a contract made in its favour against a party to the contract N.B.N. Ltd v. Savol W.A. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 23

CRIMINAL LAW AND PROCEDURE Forgery – Making of false entry in Banks books of account with intent to defraud – Breach of section 435(2)(b) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – MD/ Chief Executive forging returns on loans and advances to Central Bank of Nigeria – Section 467 Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561

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CRIMINAL LAW AND PROCEDURE – continued Section 390(7) Criminal Code Act Cap 77 Laws of the Fed- eration of Nigeria, 1990 – Effect F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561

FAILED BANK TRIBUNAL Jurisdiction of in Criminal trials – Offences under section 11(1) Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 – Accused contending that bank illegal because Banking Licence of Bank issued before the incorporation of Bank – When Accused will not be allowed to question F.R.N. v. Anyaegbunam [1994 – 1996] 6 N.B.L.R. (PART I) 662 Trial in absentia under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) F.R.N. v. Ifegwu [1994 – 1996] 6 N.B.L.R. (PART I) 700

INTERPRETATION OF STATUTES Banks and Other Financial Institutions Decree No. 25 of 1991 – Section 11 thereof – How construed – Whether has retrospective effect Kotoye v. Saraki [1994 – 1996] 6 N.B.L.R. (PART I) 100

LIMITATION OF ACTION Banking – Loans, advances and interest thereon – Recov- ery of – When does time begin to run U.B.A. Ltd v. Michael O.Abimbolu and Co [1994 – 1996] 6 N.B.L.R. (PART I) 445

LOCUS STANDI How it arises – How determined F.M.B. Ltd v. N.D.I.C. [1994 – 1996] 6 N.B.L.R. (PART I) 425

NEGLIGENCE Definition of Progress Bank Nig. Ltd v. Ugonna Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 462 xxxii [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Subject Matter

PRACTICE AND PROCEDURE Judgment debt – Court awarding interest on judgment debt without stating rate of interest – Option open to Judgment Creditor Koiki v. F.R.N. Plc [1994 – 1996] 6 N.B.L.R. (PART I) 1

WORDS AND PHRASES “Acceptor”, “Drawer”, “Holder in due course”, “Promis- sory Note”, “Indorsement” – Meaning of F.S.B. Int. Bank Ltd v. Imano Nig. Ltd [1994 – 1996] 6 N.B.L.R. (PART I) 201 WORDS AND PHRASES – continued “Bank draft”, “Bill of Exchange”, “Cheque” – Meanings of A.C.B. Ltd v. Alao [1994 – 1996] 6 N.B.L.R. (PART I) 64 “Placement” – Meaning of F.R.N. v. Odogwu (No. 1) [1994 – 1996] 6 N.B.L.R. (PART I) 561

xxxiii

INDEX OF NIGERIAN CASES REFERRED TO A A-G Anambra State v. Okafor (1992) 2 N.W.L.R. (Part 224) 396 482 A.N.T.S. v. Atoloye (1993) 6 N.W.L.R. (Part 298) 233 397 Abaye v. Ofili (1986) 1 N.W.L.R. (Part 15) 134 at 146–147 662 Abiodun v. Adehin (1962) 1 All N.L.R. 550 85 Abioye v. Yakubu (1991) 5 N.W.L.R. (Part 190) 130 100, 397 Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part 122) 377 425 Adegbaiye v. Loyinmi (1986) 5 N.W.L.R. (Part 43) 655 85 Adegbite v. Ogunfaolu (1990) 4 N.W.L.R. (Part 146) 578 330 Adegoke v. Adibi (1992) 5 N.W.L.R. (Part 242) 410 100 Adejumo v. Ayantegbe (1989) 3 N.W.L.R. (Part 110) 417 330 Adejuwon v. Co-operative Bank (1992) 3 N.W.L.R. (Part 228) 251 364 Adeniyi v. Governing Council, Yaba Tech. (1993) 6 N.W.L.R. (Part 300) 426 397 Adesanya v. President of the Federal Republic of Nigeria (1981) 5 S.C. 112 425 Adeyemi v. Opeyori (1976) 9–10 S.C. 31 100 Aeroflot v. U.B.A. (1986) 3 N.W.L.R. (Part 27) 188 397 Afolabi v. Governor of Oyo State (1985) 2 N.W.L.R. (Part 9) 734 100 Aforka v. ACB Ltd (1994) 3 N.W.L.R. (Part 331) 217 85 African Petroleum v. Owodunni (1991) 8 N.W.L.R. (Part 211) 391 at 416–417 662

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African Re-Insurance Corporation v. Fantaye (1986) 1 N.W.L.R. (Part 14) 113 273 Ahmed v. Kassim (1958) S.C.N.L.R. 28; (1958) NS.C.C 11,12 100 Akinloye v. Eyiyola (1968) N.M.L.R. 92 516 Akinola v. Oluwo (1962) 1 S.C.N.L.R. 352 462 Akpene v. Barclays Bank (1977) 1 S.C. 47 85 Allied Bank of Nigeria Ltd v. Akubueze (1995) 4 N.W.L.R. (Part 390) 493 462 American Cyanamid Co v. Vitality Pharma- ceutical Ltd (1991) 2 N.W.L.R. (Part 171) 15 at 28 700 Anyanwu v. Mbara (1992) 5 N.W.L.R. (Part 242) 386 462 Are v. Adisa (1967) N.M.L.R. 304 85 Ariori v. Elemo (1983) 1 S.C.N.L.R. 1 505 Asiyanbi v. Adeniji (1967) 1 All N.L.R. 82 1 Ashubiojo v. A.C.B. (1966) 2 All N.L.R. 203 237, 641 Atoyebi v. Odudu (1990) 6 N.W.L.R. (Part157) 384 at 401 386 Attorney-General of Bendel State v. A-G of the Federation (1981) 10 S.C. 1 100 Awolesi v. N.B.N. Ltd (1962) 1 S.C.N.L.R. 276 505 Aya v. Henshaw (1972) 5 S.C. 87 100 Ayoola v. Adebayo (1969) 1 All N.L.R. 159; (1969) N.S.C.C 173 237, 330 B Bakare v. Apena (1986) 4 N.W.L.R. (Part 33) 1 1 Bala v. Bankole (1986) 3 N.W.L.R. (Part 27) 141 462 Balogun v. Amubikahun (1985) 3 N.W.L.R. (Part 11) 27 462 Balogun v. Amubikahun (1989) 3 N.W.L.R. (Part 107) 18 100 Balogun v. National Bank of Nigeria Ltd 364, 462 (1978) 3 S.C. 155; (1978) 11 N.S.C.C 133 xxxvi [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Nigerian Cases referred to

Balogun v. Oshunkoya (1992) 3 N.W.L.R. (Part 232) 827 397, 462 Bankole v. Pelu (1991) 8 N.W.L.R. (Part 211) 523 397, 462 Barclays Bank v. CBN (1976) 1 All N.L.R. 409; (1976) 6 S.C. 175 100, 237 Bello v. Diocesan Synod of Lagos (1973) ECSLR Vol. 3 (Part 1) 330 100 BP (West Africa) Ltd v. Akinola Allen (1962) 2 S.C.N.L.R. 388 462 British and French Bank v. Opaleye (1962) 1 S.C.N.L.R. 60; (1962) 1 All N.L.R. 26 262, 364 British India Insurance Co Nig. Ltd v. Tha- wardas (1978) 3 S.C. 143 85 Buraimoh v. Bamgbose (1989) 3 N.W.L.R. (Part 109) 352 330 Busari v. Oseni (1992) 4 N.W.L.R. (Part 237) 557 425 C Chrisray Ltd v. Elson and Neil Ltd (1990) 3 N.W.L.R. (Part 140) 630 462 Clark v. The State (1986) 4 N.W.L.R. (Part 35) 381 at 394 700 D Daboh v. State (1977) 5 S.C. 197 at 222 700 Din v. A G. Federation (1988) 4 N.W.L.R. (Part 87) 147 100 Djukpan v. Orovuyebe (1967) N.M.L.R. 287 85 Duru v. Nwosu (1989) 4 N.W.L.R. (Part 113) 24 237 E Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372 273, 462 Egbe v. Adefarasin (1985) 1 N.W.L.R. (Part 3) 549 653 Egbe v. Adefarasin (1987) 1 N.W.L.R. (Part 47) 1 237 Egbe v. Onogun (1972) 1 All N.L.R. (Part 1) 95 100

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Eguamwense v. Amaghizemwen (1993) 9 N.W.L.R. (Part 315) 1 482 Eholor v. Osayande (1992) 6 N.W.L.R. (Part 249) 524 397 Ekwuno v. Ifejika 5 F.S.C. 156 482 Elf (Nig.) Ltd v. Sillo (1994) 6 N.W.L.R. (Part 350) 258 462 Emelogu v. State (1988) 2 N.W.L.R. (Part 78) 524 425 Enahoro and Co Ltd v. Bank of West Africa Lim- ited (1971) 1 N.C.L.R. 180 23 Ezeani v. Ejidike (1964) 1 All N.L.R. 402 516 Ezewani v. Onwordi (1986) 4 N.W.L.R. (Part 33) 27 100 Ezomo v. Oyakhire (1985) 1 N.W.L.R. (Part 2) 195 237 F F.C.D.A. v. Naibi (1990) 3 N.W.L.R. (Part 138) 270 330 Faleye v. Otapo (1987) 4 N.W.L.R. (Part 64) 186 1 Falobi v. Falobi (1976) 9–10 S.C. 1 653 First Bank of Nigeria Plc v. Ibennah (1996) 5 N.W.L.R. (Part 451) 725 462 G G.B. Ollivant v. Vanderpuye (1935) 2 W.A.C.A 368 653 Gambioba v. Esezi II (1961) 2 S.C.N.L.R. 237 425 Gankon v. Ugochukwu Chem. Ind. (1993) 6 N.W.L.R. (Part 297) 55 462 Garba v. University of Maiduguri (1986) 1 N.W.L.R. (Part 18) 550 237 George v. Dominion Flour Mills Ltd (1963) 1 S.C.N.L.R. 242 64

H H.M.S. Ltd v. First Bank (1991) 1 N.W.L.R. (Part 167) 290 330 xxxviii [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Nigerian Cases referred to

Habib (Nig.) Bank Ltd v. Koya (1992) 7 N.W.L.R. (Part251) 43 386 Hausa v. State (1994) 6 N.W.L.R. (Part 350) 281 482

I Ige v. Amakiri (1976) 11 S.C. 1 at 12–13, 23, 386 Ihewuezi v. Ekeanya (1989) 1 N.W.L.R. (Part 96) 239 462 Ijebu-Ode Local Government v. Adedeji Ba- logun and Co Ltd (1991) 1 N.W.L.R. (Part 166) 136 364, 462 Ike v. Ugboala (1993) 6 N.W.L.R. (Part 301) 539 330 Innih v. Ferodo A and C Ltd (1990) 5 N.W.L.R. (Part 152) 604 at 614 462 Iriri v. Erhurhobara (1991) 2 N.W.L.R. (Part 173) 252 at 262 700

K Kate Enterprises Ltd v. Daewoo Nig. Ltd (1985) 2 N.W.L.R. (Part 5) 116 386 Kosile v. Folarin (1989) 3 N.W.L.R. (Part 107) 1 85 Kotoye v. C.B.N (1989) 1 N.W.L.R. (Part 98) 419 100

L L.C.C. v. Unachukwu (1978) 3 S.C. 199 462 Lamai v. Orbih (1980) 5–7.C. 28 100 Lawal v. G.B. Ollivant (1972) 3 S.C. 124 100 Lewis and Peat Ltd v. Akhimien (1976) 1 All N.L.R. (Part 1) 460 330 Lokoyi v. Olojo (1983) 2 S.C.N.L.R. 127 100 M Macaulay v. NAL Merchant Bank Limited (1990) 4 N.W.L.R. (Part 144) 364 23 xxxix [1994 – 1996] 6 N.B.L.R. (PART I)

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Majekodunmi v. National Bank of Nigeria Limited (1978) 3 S.C. 119 at 127 23 Makanjuola v. Balogun (1989) 3 N.W.L.R. (Part 108) 192 1 Melifonwu v. Egbuji (1982) 9 S.C. 145 425 Merchant Bank v. Federal Minister of Finance (1961) 2 All N.L.R. 598 482 Missri v. British Bank of West Africa (1967) N.C.L.R. 427 641 Mobil v. Johnson (1961) 1 S.C.N.L.R. 157; (1961) 1 All N.L.R. 83 273 Mogaji v. Odofin (1978) 4 S.C. 91 330 Momoh v. Olotu (1970) 1 All N.L.R. 117 425 Mustapha v. Gov. Lagos State (1987) 2 N.W.L.R. (Part 58) 539 237 N N.P.A. v. Panalpina (1974) 1 N.M.L.R. 82 100 Nabhan v. Nabhan (1967) All N.L.R. (Re- print) 51 100 Nasr v. Beirut-Riyadh (Nig) Bank Ltd (1968) All N.L.R. 469 at 283 662 NICON v. P.I.E. Co Ltd (1990) 1 N.W.L.R. (Part129) 697 1 Niger Dams Authority v. Lajide (1973) 5 S.C. 207 273 Nigerian Maritime Services Ltd v. Afolabi (1978) 2 S.C. 79 330 Nigerite Ltd v. Dalami (Nig) Ltd (1992) 7 N.W.L.R. (Part 253) 288 662 Nipol v. Bioku Investment and Property Co Ltd (1992) 3 N.W.L.R. (Part 232) 727 23 Nishizawa Limited v. Jethwani (1984) 12 S.C. 234 23 Nneji v. Chukwu (1988) 3 N.W.L.R. (Part81) 184 482 Nsirim v. Nsirim (1990) 3 N.W.L.R. (Part 138) 285 462 xl [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Nigerian Cases referred to

Nwogu v. Njoku (1990) 3 N.W.L.R. (Part 140) 570 462 Nwosu v. Imo State Environmental Sanitation Authority (1990) 2 N.W.L.R. (Part 135) 668 at 702 100, 482 Nwuke v. Okere (1994) 5 N.W.L.R. (Part 343) 159 516 O Obeya Memorial Hospital v. A-G Federation (1987) 3 N.W.L.R. (Part 60) 325 100 Obiora v. C.O.P. (1990) 7 N.W.L.R. (Part161) 222 1 Obmiami Brick and Stone Nig. Ltd v. A.C.B. Ltd (1992) 3 N.W.L.R. (Part 229) 260 273, 330 Odeneye v. Efunuga (1990) 7 N.W.L.R. (Part 164) 618 425 Oduye v. Nigeria Airways Ltd (1987) 2 N.W.L.R. (Part 55) 126 273 Ogunbi v. Kosoko (1991) 8 N.W.L.R. (Part 210) 511 201 Ohiaeri v. Akabeze (1992) 2 N.W.L.R. (Part 220) 1 330 Ojukwu v. Gov. of Lagos State (1986) 3 N.W.L.R. (Part 26) 39 100 Okambah Ltd v. Sule (1990) 7 N.W.L.R. (Part 160) 1 23 Okezie v. Queen (1963) 1 S.C.N.L.R. 24 462 Okparaoke v. Egbunonu (1941) 7 W.A.C.A 53 85, 330 Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723 23, 330 Olale v. Ekwelendu (1989) 4 N.W.L.R. (Part 115) 326 386 Olatubosun v. NISER Council (1988) 3 N.W.L.R. (Part 80) 25 237 Oloba v. Akereja (1988) 3 N.W.L.R. (Part 84) 508 100

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Oloriode v. Oyebi (1984) 1 S.C.N.L.R. 390; (1984) 5 S.C. 1 100, 425 Olowosago v. Adebanjo (1988) 4 N.W.L.R. (Part 88) 275 425 Olubode v. Salami (1985) 2 N.W.L.R. (Part 7) 282 330 Olurotimi v. Ige (1993) 8 N.W.L.R. (Part 311) 257 1 Omoloye v. A-G Oyo State (1987) 4 N.W.L.R. (Part 64) 267 425 Omoregbe v. Edo (1971) 1 All N.L.R. 282 641 Omoregie v. Idagiemwanye (1985) 2 N.W.L.R. (Part 5) 4 462 Omoregbe v. Lawani (1980) 3–4 S.C. 108 1 Onaga v. Micho and Co (1961) 2 S.C.N.L.R. 101 462 Onibudo v. Akibu (1982) 7 S.C. 60 397 Onochie v. The Republic (1966) N.M.L.R. 307 700 Onyiuke v. Okeke (1976) 10 N.S.C.C 146 64 Orogan v. Soremekun (1986) 5 N.W.L.R. (Part 44) 688 425 Osadebay v. A-G, Bendel State (1991) 1 N.W.L.R. (Part 169) 525 100 Osafile v. Odi (No. 1)(1990) 3 N.W.L.R. (Part 137) 130 330 Otapo v. Sunmonu (1987) 2 N.W.L.R. (Part 58) 587 100 Owoniboys Technical Services Ltd v. John Holt Ltd (1991) 6 N.W.L.R. (Part 199) 550 100 Owosho v. Dada (1984) 7 S.C. 149 85 P P.A. Oguigo and Sons Ltd v. C.O.P. (1991) 2 N.W.L.R. (Part177) 46 516 Peenok Investment Limited v. Hotel Presiden- tial Ltd (1982) 12 S.C. 1 100 Pepple v. Green (1990) 4 N.W.L.R. (Part 142) 108 425

xlii [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Nigerian Cases referred to

R Reynolds Construction Co v. R.B.B. (1993) 6 N.W.L.R. (Part 297) 122 1 S Sabbach v. B.W.A Ltd (1966) 1 All N.L.R. 240 23 Salami v. Savannah Bank of Nigeria Ltd (1990) 2 N.W.L.R. (Part 130) 106 462 Saude v. Abdullahi (1989) 4 N.W.L.R. (Part 116) 387 237 Savannah Bank of Nig. Ltd v. Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 N.W.L.R. (Part 49) 212 653 Shell BP v. Jammal Eng. Ltd (1974) 4 S.C. 23 364 Shodipo v. Daily Times (1972) 11 S.C. 69 397 Shonekan v. Smith (1964) 1 All N.L.R. 168 85 Sken Consult (Nig.) Limited v. Ukey (1981) 1 S.C. 6 237 Sodipo v. Lemminkainen OY (1985) 2 N.W.L.R. (Part 8) 547 64 Sodipo v. Lemminkainen OY (No. 2)(1986) 1 N.W.L.R. (Part 15) 220 23 SPDC Ltd v. Farah (1995) 3 N.W.L.R. (Part 382) 148 397 State v. Gwonto (1983) 3 S.C. 62; (1983) All N.L.R. 109 662 T Tewogbade v. Akande (1968) N.M.L.R. 404 85 Thirwell v. Oyewunmi (1990) 4 N.W.L.R. (Part 144) 384 at 406 23 Thomas v. Olufosoye (1986) 1 N.W.L.R. (Part 18) 669 425 Tukur v. Governor of Gongola State (1989) 4 N.W.L.R. (Part 117) 517 100 U U.B.A. Ltd v. Ibhafidon (1994) 1 N.W.L.R. (Part 318) 90 516 U.B.N. Ltd v. Ozigi (1991) 2 N.W.L.R. (Part 176) 677 85 xliii [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Udoh v. Orthopaedic Hospital Management Board (1993) 7 N.W.L.R. (Part 304) 100 Umunna v. Okwuraiwe (1978) 6–7 S.C. 1 1 Union Bank v. Nwoye (1990) 2 N.W.L.R. (Part 130) 69 462 United Nigeria Insurance Co v. Muslim Bank (West Africa) Ltd (1972) N.C.L.R. 9 260 Uredi v. Dada (1988) 1 N.W.L.R. (Part 69) 237 330 UTC (Nig) Ltd v. Pamotei (1989) 2 N.W.L.R. (Part 103) 244 at 282–283 23 Uzuegbu v. Progress Bank (Nig.) Ltd (1988) 4 N.W.L.R. (Part 87) 236 397

W Western Steel Works v. Iron and Steel Work- ers Union (1987) 1 N.W.L.R. (Part 47) 284 at 303 482 Woluchem v. Gudi (1981) 5 S.C. 291 516

Y Yesufu v. A.C.B. (1981) 1 S.C. 74 260 Yougo v. C.O.P. (1992) 8 N.W.L.R. (Part 257) 36 641 Yusuf v. Co-operative Bank Limited (1994) 7 N.W.L.R. (Part 359) 676 445 Z Ziks Press Ltd v. Ikoku (1951) 13 W.A.C.A 188 397

xliv INDEX OF FOREIGN CASES REFERRED TO A Abel v. Gee (1871) LR 6 CP 365 100 Alder v. Moore (1961) 2 Q.B. 57 23 Anisminic Limited v. Foreign Compensation Commission (1969) 2 A.C. 147 100, 482 Asante v. Taawia (1949) 65 TLR 105 100 Attorney-General v. Boden (1912) 1 KB 539 100

B B and B Viennese Fashions v. Losane (1952) 1 All E.R. 909 64 B. Liggett (Liverpool) Ltd v. Barclays Bank Ltd (1928) 1 K.B. 64 547 Barclays Bank Limited v. Quistclose Invest- ments Limited (1970) A.C. 567 23 Bernadi v. National Sales Corporation (1931) 1 All E.R. 320 201 Blyth v. Birmingham Waterworks Co (1856) II Exch. 781 at 784 397 Bradford Old Bank Limited v. Sutcliffe (1918) 2 K.B. 833 445 Brayton v. Bale (1923) 2B and C293 201

C Capital and Counties Bank v. Gordon (1903) A.C. 240 547, 641 Cartledge v. E. Jopling and Sons Ltd (1963) A.C. 758 100 Colonial Sugar Refining Co v. Irving (1905) A.C. 369 100 Commissioners of Customs and Excise v. Cure and Deeley, Ltd (1962) 1 Q.B. 340 100 Cope v. Rowland (4) (1836) 2 M and W 149 64 Coxhead v. Mullis (1878) 3 CPD 439 100 Currie v. Misa (1875) L-RL 10 Ex 153 23

xlv [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

D Dove v. Dove (1963) P. 321 100 Duncan Fox and Co v. North and South Wales Bank (1880) 6 App. Cas. 1 505 F Fielding and Platt Ltd v. Najjar (1969) 2 All ER 150 201 Fitzwilliamson Wandworth Estates Company v. Minister of Housing and Local Govern- ment (1952) A.C. 362 482 Foley v. Hill (1848) 2 HL. Case 28 547 Fordon v. Harcourt v. Risington (1932) All E.R. 81 at 83 462 Fullalore v. Parker 31 LJ (C.P. 239) 100 G Garnett v. M’kewan (1872) LR 8 Ex Ch 10 260 George v. Royal Exchange Assurance Corpo- ration (1900) 2 QB 214 64 Gordon v. London City and Midland Bank Ltd (1903) A.C. 240 64 Gunn v. Balckow Vanchan and Co (1875) L.R. 10 Ch. App. 491 505 H Hadley v. Baxendale (1854) 9 Exch. 341 at 354 462 Heyting v. Dupont (1961) 1 W.L.R. 1192 100 Hickson v. Darlow (1883) 23 Ch.D. 690 100 I In Re Jones 9 LREq. 63 100 In Re Lord Chesham Cavendish v. Dacre (1886) 31 Ch. D. 466 505 In Re Swiss Mellor v. Swire (1985) 30 Ch. D 239 1 Irving v. National Provincial Bank Ltd (1962) 2 Q.B. 73 100

xlvi [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Foreign Cases referred to

J Jacob v. Booth’s Distiller Co (1901) 85 LT 262 23 Jefford v. Gee (1970) 2 Q.B.130 23 Jennings v. Kelly (1939) 4 All E.R. 464 100 Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110 237, 445, 547 K Kay v. Goodwin (1830) 6 BING 576; 130 E.R. 1403 662 L Les Affreteurs Reunis v. Leepold Walford (London) Ltd (1919) 23 London Chatham and Dover Railway Co v. South Eastern Railway Co (1893) A.C. 429 23 Lowe v. Lombank Limited (1960) 1 W.L.R. 196 at 204 23 M MacDonald and Co v. Nash and Co (1924) All E.R. 601 201 Macdonald v. Whitfield (1883) 8 A.C. 733 201 Midland Bank v. Conway Corporation (1965) 1 W.L.R. 1165 237 Moon v. Durden 2 Exh. 22 100 N New Zealand Shipping Co Ltd v. A.M. Satter- thwaite and Co Ltd 1975 A.C. 154 23 O O’Riley v. Macnon (1983) 2 A.C. 237 482 P Parr’s Banking Co Limited v. Yates (1898) 2 Q.B. 460 at 464–465 445 Peason v. Broadbent (1870) 36 C and P 485 662 Performing Night Society Ltd v. London Thea- tre of Varieties (1924) A.C. 1 23

xlvii [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

R R v. Registrar of Companies Ex parte Central Bank of England (1986) 1 Q.B. II 482 R v. Clayton (1943) 33 Cr. App. R. 113 700 R v. Greenfield (1973) 1 W.L.R. 151 700 R.E. Jones Ltd v. Waring and Gillow Ltd (1926) A.C. 670 201 Re Athlumney (1898) 2 Q.B. 547 100 Re Bradon’s Patent (1884) 9 A.C. 589 100 Re HPC Productions Ltd (1962) 2 Ch. 466: (1962) 1 A.E.R. 37 662 Riches v. Westminister Bank Limited (1943) 2 All E.R. 725 23 Rouguette v. Overmann (1875) L.R. 10 G.B. 525 505 S Scotson v. Pegg (1861) 158 E.R. 121 at 123 23 Shadwell v. Shadwell (1860) 142 E.R. 62 23 Sheldon v. Bromfield Justice (1964) 2 Q.B. 573 100 Shop and Store Developments Ltd v. I.R.C. 100 Smallwood v. Gallardo 275 U.S. 56, 48 S.C. 1 23 100 Smith v. East Elloe R.D.C. (1956) A.C. 736 100 St. John Shipping Corporation v. J. Bank Ltd (1956) 3 All E.R. 683 64 Surtees v. Ellison (1829) 9B and C750, 752 or 107 E.R. 228 662 Sussex Peerage Case 1843 1860 All E.R. 54 100 Sutters v. Briggs (1922) 1 A.C. 1 100 T The Gauntlet (1872) LR4 PC 184 at 191 662 Thomas v. Thomas (1842) 2 Q.B. 851 23 Thynne v. Thynne (1955) 3 All E.R. 129 1 Trans Trust S.P.R.L v. Danubiam Trading Co Ltd (1952) 2 Q.B. 297 23

xlviii [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Foreign Cases referred to

V Vandevell’s Trust (No. 2) (1974) Ch. 269 100 W Walton v. Mascall (1844) 13 Mand W 458 201, 445 Western Derby Union v. Metropolitan Life As- surance Society (1897) A.C. 647 100 Westminster Bank Ltd v. Hilton (1926) 43 TLR 124 547 Williams Brandt’s Sons and Co v. Dunlop Rubber Co (1905) A.C. 454 23 Williams Hill (Park Lane) Ltd v. Hotman (1950) All E.R. 1013 64 Williams v. Williams (1971) All E.R 764 100 Wilson v. United Counties Bank Ltd (1920) A.C. 102 at 133 462 Wong v. Beaumont Property Trust Ltd (1965) 1 Q.B. 173 100 Y Yeoman Credit Ltd v. Gregory (1963) 1 All E.R. 245 201, 505 Young and Co v. Mayor, etc of Leamington (1882) 8 Q.B.D. 579; (1883) 8 App.Cas. 517 100

xlix

INDEX OF NIGERIAN STATUTES REFERRED TO

Banking Act, 1969 s 11(4)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516, 561 s 12(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516, 561 s 19(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516, 561 Banking Act Cap 28 Law of the Federation of Nigeria, 1990 s 11(1)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 11(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 11(7)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 15 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 1 Banks and Other Financial Institutions Decree No. 25 of 1991 s 2 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 3(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 3(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 11 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100, s 12 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 425, 482 s 16(a)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 s 16(b)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 s 18(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 18(3)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662, 700 s 18(4)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 18(9)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662, 700 s 19(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 19(3)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 s 20(2)(a)(ii) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 s 38(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 38(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 38(3)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 38(4)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 38(5)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 49 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 482 li [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Bill of Exchange Act, 1950 s 27(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 s 83(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 Bills of Exchange Act Cap 21 Volume I Laws of the Fed- eration of Nigeria, 1990 s 3(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 5 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 24 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 386 s 60 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 386 s 73 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 90 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 386 Bills of Exchange Act Cap 35 Laws of the Federation of Nigeria, 1990 s 3 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 201 s 41(3)...... [1994 – 1996] 6 N.B.L.R. (PART I) 330 s 45(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 330 s 46(2)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 330 s 48 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 505 s 49 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 505 s 50 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 505 s 50(2)(c)(i)...... [1994 – 1996] 6 N.B.L.R. (PART I) 330 s 57 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 s 85(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 201,505 s 85(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 201 s 87 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 201 s 91(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 201 s 91(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 201 s 220(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 23 s 220(4)...... [1994 – 1996] 6 N.B.L.R. (PART I) 23 Companies Act, 1968 s 36 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237 Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 s 410(1)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 410(1)(b) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 415(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 422(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 lii [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Nigerian Statutes referred to

Companies and Allied Matters Act Cap 59 Laws of the Federation of Nigeria, 1990 – continued s 422(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 422(3)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 422(9)...... [1994 – 1996] 6 N.B.L.R. (PART I) 425 s 425 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 425

Constitution of the Federal Republic of Nigeria, 1979 s 33(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Constitution of the Federal Republic of Nigeria (Promul- gation) Decree No. 12 of 1989 s 3(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Court of Appeal Act, 1976 s 16 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397

Criminal Code Act Cap 77 Laws of the Federation of Ni- geria, 1990 s 383(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516 s 438 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 516 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 Decree No. 47 of 1979 s 5(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 100 Decree No. 48 of 1977 s 2(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Edict No. 16 of 1988 of Plateau State s 18 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 653

Evidence Act Cap 112 Laws of Federation of Nigeria, 1990 s 20 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 74(1)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 s 74(1)(b) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 s 75 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 85 s 135 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 462 liii [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Evidence Act Cap 112 Laws of Federation of Nigeria, 1990 – continued s 136 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 462 s 137 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 462 s 149(d)...... [1994 – 1996] 6 N.B.L.R. (PART I) 85

Exchange Control Act, 1962 s 8(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516

Exchange Control (Anti Sabotage) Act Cap 114 Laws of the Federation of Nigeria, 1990 s 1(1)(c) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 1(1)(d)(iii) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 2(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 3(1)...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 s 7(c)...... [1994 – 1996] 6 N.B.L.R. (PART I) 64

Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994 (as amended) s 3(1)(b) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 3(1)(c) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 3(1)(d) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 700 s 20(5)...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 High Court Law of Lagos, 1955 s 12 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 23 High Court Law Cap 49 Law of Northern Nigeria, 1963 s 32 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 653

High Court Law of Bendel State s 45 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237

Interpretation Act Cap 192 Laws of the Federation of Nigeria, 1990 s 6(1)(b) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 662 s 6(1)(c) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 662

liv [1994 – 1996] 6 N.B.L.R. (PART I)

Index of Nigerian Statutes referred to

Limitation Law Cap 64 Laws of Oyo State, 1978 s 4(1)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 85

Limitation Law (Cap 70) Laws of Lagos State, 1973 s 8(1)(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 445 s 8(6)...... [1994 – 1996] 6 N.B.L.R. (PART I) 445

NISER Act No. 70 of 1977, Schedule 2 s 4 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Second Tier Foreign Exchange Market Act, 1988 s 10(2)...... [1994 – 1996] 6 N.B.L.R. (PART I) 516

Sheriffs and Civil Process Act Cap 407 Laws of the Federation of Nigeria, 1990 s 97 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237 s 98 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237 s 99 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237

INDEX OF FOREIGN STATUTES REFERRED TO

Judgment Act of 1933 s 17 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 23

Law Reform (Miscellaneous Provisions) Act, 1934 of England s 3 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 23

lvii

INDEX OF NIGERIAN RULES OF COURT REFERRED TO

Court of Appeal Rules, 1981 Order 3 rule 2(4) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 462

High Court of Bendel State (Civil Procedure) Rules, 1976 Order 3 rule 13 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237 Order 6 rules 2 & 4 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 237

High Court of Lagos State (Civil Procedure) Rules, 1972 Order 10 rule 1 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 23 Order 10 rule 1(a) ...... [1994 – 1996] 6 N.B.L.R. (PART I) 201 Order 25 rule 6 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 1

High Court of Western State (Civil Procedure) Rules Cap 44 Order 35 rule 10 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 23

lix

INDEX OF BOOKS REFERRED TO

Black’s Law Dictionary generally...... [1994 – 1996] 6 N.B.L.R. (PART I) 23

Black’s Law Dictionary (5ed) generally...... [1994 – 1996] 6 N.B.L.R. (PART I) 64 page 215 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Blacks Law Dictionary (6ed) Centinnial Edition 1891– 1991 page 390 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 page 1149 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 561

Chalmers on Bills of Exchange (13ed) page 24 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 386

Chitty on Contracts (33ed) Volume 1 para 1627 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 445

De Smith: Judicial Review of Administrative Action (4ed) page 291 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 482 page 335 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 482 page 337 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 482

Halsbury’s Laws of England Volume 2 (3ed) paragraph 322 page 172 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 260

Halsbury’s Laws of England Volume 3 (4ed) generally ...... [1994 – 1996] 6 N.B.L.R. (PART I) 387

Halsbury’s Laws of England (3ed) Volume 9 page 353 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Halsbury’s Laws of England (4ed) Volume 1 para 783 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 547

lxi [1994 – 1996] 6 N.B.L.R. (PART I)

Nigerian Banking Law Reports

Halsbury’s Laws of England (4ed) Volume 2 para 100 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 547

Halsbury’s Laws of England (4ed) Volume 4 para 906 page 557 ...... 100 para 922 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Halsbury’s Laws of England (4ed) Volume 12 para 1186 page 470 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 para 1189 page 472 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 para 1190 page 474 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397

MacGregor on Damages (13ed) para 300 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 para 301 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397 para 304 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 397

Maitland: Selected Essays, 1936 page 129 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 23

Maxwell on Interpretation of Statutes (12ed) page 29 et seq. 251–252.[1994 – 1996] 6 N.B.L.R. (PART I) 100

Paget’s Law of Banking (8ed) page 82 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 445

Shorter Oxford English Dictionary generally ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Snell’s Principles of Equity (27ed) page 87–88 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Statutory Interpretation, by Francis Bennion (2ed) section 164 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100 lxii [1994 – 1996] 6 N.B.L.R. PART I

Index of Books referred to

Stroud’s Judicial Dictionary generally ...... [1994 – 1996] 6 N.B.L.R. (PART I) 100

Supreme Court Practice of England 1988 Edition, Volume 1 para 6, 2, 10–15 ...... [1994 – 1996] 6 N.B.L.R. (PART I) 1

lxiii

[1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

Kola Koiki and others v. First Bank of Nigeria Plc 1 a Kola Koiki and others v. First Bank of Nigeria Plc b COURT OF APPEAL, LAGOS DIVISION KALGO, SULU-GAMBARI, UWAIFO JJCA Date of Judgment: 19 JANUARY 1994 Suit No.: CA/L/225/91

Banking – Deposit of money in bank pursuant to court order c – Applicable rate of interest payable thereon – Who deter- mines – How computed Banking – Interest rate payable on deposits in a bank – How determined – Section 15(1) and (2) Banking Act (Cap 28) d Laws of the Federation of Nigeria, 1990 construed Practice and procedure – Judgment debt – Court awarding interest on judgment debt without stating rate of interest – e Option open to judgment creditor Facts The first, second and third appellants as the plaintiffs in the Lagos High Court claimed from the fourth appellant as the f defendant special and general damages for failure of the defendants to deliver to them Icelandic stock fish ordered by the appellants in Nigeria between November, 1981 and January, 1993. Sequel to the applications filed by the appel- g lants, the trial court granted a preservative injunction restraining the defendants, their agents or servants from withdrawing, disposing or dealing in any way with the sum of N5,863,960 with interest thereon deposited in account no. h 010307718 and/or account no. 01307750 with First Bank of Nigeria Limited, the respondent herein, by the said defendant or on his behalf pending the determination of the substantive suit. i The substantive suit thereafter proceeded to trial, at the end of which the learned trial Judge delivered judgment in favour of the appellants against the defendants in the sum of N30,262,784.59 including interest and costs. Being dissatis- j fied with the trial court’s decision the appellants appealed to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

2 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the Court of Appeal, and thereafter brought an application a for stay of execution before the trial court, which application was dismissed on 9th July, 1990 and the court, after dismissing same, ordered inter alia as follows: b “The First Bank of Nigeria Limited shall pay with interest the sum that has accrued thereon to the First City Merchant Bank Limited of Primrose Towers 19th Floor, 17A Tinubu Street, Lagos. The said First City Merchant Bank Limited shall give its bank guaran- c tee to the judgment debtor within 30 days of the receipt of the money from the First Bank of Nigeria Limited, pending the determination of the appeal in this suit.”

The defendants, without complying with the above order, d filed another application for stay of execution of the judgment of the trial court pending appeal. The Court of Appeal granted a conditional stay to the effect that the defendants had to pay the entire judgment debt with costs to e the First City Merchant Bank Limited within 30 days of the order. On 8th May, 1991, the respondent (First Bank) paid the sum of N5,863,960 to First City Merchant Bank Limited without any interest at all. f Due to the default of the respondent in paying interest on the sum of N5,863,960 to appellant as ordered by the trial court, the appellant commenced contempt proceedings against the respondent leading to the committal of the re- g spondent company secretary/legal adviser to prison, but on the same day the contemnor was released on his own recognisance when a cheque for the sum of N469,116.80 was shown to the trial court representing interest on the said h amount in purported compliance with the trial court’s order. The appellants, however, protested that the amount of N469,116.80 paid by the respondent as interest on the sum of N5,863,900 deposited from 18th April, 1989, was inade- i quate. The protest of the appellants prompted the learned trial Judge to order the appellants to file an application on notice for the determination of the rate of interest payable on the deposit, and the appellant in due compliance with the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

Kola Koiki and others v. First Bank of Nigeria Plc 3 a court order filed the motion praying, amongst other reliefs, for respondent to give particulars of how it arrived at an interest of N469,116.80. Upon service of the aforesaid mo- b tion on the respondent, the respondent raised amongst other grounds that the court order of 18th April, 1989 did not fix any rate of interest on the preserved sum and that the trial court had become functus officio after the payment of inter- c est by the respondent. The trial court upheld the preliminary objection of the respondent and struck out the appellant’s motion on notice dated 18th June, 1991. The appellants being dissatisfied with d the trial court ruling appealed to the Court of Appeal which unanimously allowed the appeal. Held – 1. The interest payable on a sum of money preserved in a e bank by an order of court just like a deposit in a licensed bank must not be less than the minimum or more than the maximum rate approved by the Central Bank. The parties can agree on interest within the limits. In the ab- f sence of any such agreement, the interest cannot be less than the approved minimum. It would be fair, however, to adopt the going prime rate in the said bank at the particular time for a similar amount of deposits. No party g can adopt an arbitrary rate of interest on deposits and the court cannot impose it. It is therefore enough for the court to direct that an amount be paid into an interest- yielding account. h 2. Where, as in the instant case, a judgment creditor realises that the court or Judge in the judgment or order did not specify the rate of interest payable on the judgment debt, the judgment creditor can apply to the court i or Judge by motion on notice to determine the rate of interest. The appellants’ motion on notice in this case filed on the direction of the learned trial Judge in order to ascertain the rate of interest payable was the right thing to j do in the circumstances. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

4 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

3. In law, deposits made into any licensed bank but for the a purpose that they shall attract interest shall be in accordance with the guidelines under section 15 of the Banking Act, 1990. It follows, therefore, that it is not the b duty of a court to fix the interest to be paid on a deposit in a licensed bank. Appeal alllowed. c Cases referred to in the judgment

Nigerian d Asiyanbi v. Adeniji (1967) 1 All N.L.R. 82 Bakare v. Apena (1986) 4 N.W.L.R. (Part 33) 1 Faleye v. Otapo (1987) 4 N.W.L.R. (Part 64) 186 e Makanjuola v. Balogun (1989) 3 N.W.L.R. (Part 108) 192 NICON v. P.I.E. Co Ltd (1990) 1 N.W.L.R. (Part 129) 697 Obiora v. C.O.P. (1990) 7 N.W.L.R. (Part 161) 222 f Olurotimi v. Ige (1993) 8 N.W.L.R. (Part 311) 257 Omoregbe v. Lawani (1980) 3–4 S.C. 108 Reynolds Construction Co v. R.B.B. (1993) 6 N.W.L.R. (Part g 297) 122 Umunna v. Okwuraiwe (1978) 6–7 S.C. 1 h Foreign In re Swiss Mellor v. Swire (1985) 30 Ch.D. 239

Thynne v. Thynne (1955) 3 All E.R. 129 i

Nigerian statute referred to in the judgment Banking Act Cap 28 Law of the Federation of Nigeria, 1990, section 15 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

Kola Koiki and others v. First Bank of Nigeria Plc 5 a Nigerian rules referred to in the judgment High Court of Lagos State (Civil Procedure) Rules, 1972, Order 25 Rule 6 b Book referred to in the judgment Supreme Court Practice of England 1988 Edition Volume 1, paragraphs 6/2/10–6/2/15 c Counsel For the first to third appellants: Mbanuga d For the fourth appellant: Uwechue ( Osemeka) For the respondents: Abiru e Judgment KALGO JCA: (Delivering the lead judgment) The main issue for determination in this appeal is whether, after a Judge has ordered payment of “interest” simpliciter on a f judgment debt, without specifying the rate of that interest, he can later, on an application by motion on notice, hear the matter in order to determine the rate of interest. The facts which gave rise to this appeal are briefly as fol- g lows: The appellants were the plaintiffs in the Lagos High Court in Suit No. LD/407/87. They claimed from B.V. Magnussen (hereinafter referred to as the defendants) special and gen- h eral damages for failure of the defendants to deliver to them icelandic stockfish ordered by the appellants in Nigeria between November, 1981 and January, 1983. In the course of the proceedings, the appellants obtained a preservative i injunction restraining the defendants, their agents or servants from withdrawing or disposing or dealing in any way with the sum of N5,863,960 with interest thereon deposited in account no. 010307718 and or account no. 01307750 with j First Bank of Nigeria Limited, the respondent herein, by the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 6 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. said defendant or on his behalf, pending the determination of a the substantive suit. The suit then proceeded to hearing and at the end of the trial, the learned trial Judge, Adeyinka J, on 9th June, 1990, b delivered a judgment in favour of the appellants against the defendants in the sum of N30,262,784.59 including interest and costs. The defendants were dissatisfied with this decision and c they appealed to this Court. They then filed an application for stay of execution in the trial court pending the determination of the appeal. The application was on 9th July dismissed by the learned trial Judge, who then ordered that:– d “The First Bank of Nigeria Limited shall pay with interest that has accrued thereon to the First City Merchant Bank Limited of Prim- rose Towers, 9th floor, 17A Tinubu Street, Lagos. The said First City Merchant Bank Limited shall give its bank guarantee to the e judgment debtor within 30 days of the receipt of the money from the First Bank of Nigeria Limited, pending the determination of the appeal in the suit” (italics mine). Without complying with the above order of the trial court, f the defendants filed in this Court another application for stay of execution of the judgment of the trial court pending appeal. On 9th April, 1991, the application was granted on condition that the defendants pay the entire judgment debt with costs to the First City Merchant Bank Limited within g 30 days of the order. On 8th May, 1991, the respondents paid the sum of N5,863,960 to the First City Merchant Bank Limited without any interest at all. h For the failure of the respondents to pay interest as ordered by the trial court on 9th July, 1990, on the sum of N5,863,960 which they paid to First City Merchant Bank Limited, the appellants commenced contempt proceedings against them (respondents). In the course of these proceed- i ings, precisely on 14th June, 1991, the learned trial Judge committed the company secretary/legal adviser of the respondents, Otunba Afolabi Olasope, to prison for contempt, but on the same day, the contemnor was released on his own j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Kola Koiki and others v. First Bank of Nigeria Plc 7 a recognisance when a cheque for the sum of N469,116.80 was shown to the trial court representing interest on the said amount in purported compliance with the trial court’s order. b The appellants, however, protested that the amount of N469,116.80 paid by the respondent as interest on the sum of N5,863,960 deposited from 18th April, 1989, was inadequate but the learned trial Judge in course of argument on c the matter wrote:– “Court: The order of the court of 9/7/90 did not state the rate of interest. Question: What should be the rate of interest? d This question can only be answered by a further argument by both parties. I direct that the judgment creditor do file an application on notice for the determination of the rate of interest applicable and both e parties will argue same.” In compliance with this direction, the appellants filed a motion on notice dated 18th June, 1991, praying the trial court for an order:– f “1. That the First Bank should give particulars of their computation culminating in the sum of N469,116.80, which the said bank paid to the judgment creditors through their bank, the First City Merchant Bank Limited, Primrose Tow- g ers. Tinubu Street, Lagos, as accrued interests between 18th day of April, 1989 and 7th day of May, 1991. 2. That evidence be given by the parties as to the determination of the interest that actually accrued on the principal sum of N5,863,960, since the said money has been depos- h ited against guarantee at the First Bank of Nigeria Limited on the 9th April, 1987 and paid out on the 8th day of May, 1991.” When the respondents were served with the application, they i in turn filed a notice of preliminary objection dated 8th July, 1991 in the following terms:– “TAKE NOTICE that at the hearing of the judgment creditors’ motion dated the 18th of June, 1991 on the 10th of July, 1991 the j plaintiff shall raise and argue the following preliminary objection. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 8 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

THAT this Honourable court has no jurisdiction to entertain the a said application. GROUNDS FOR THE OBJECTION 1. The application of the judgment creditors as can be gar- b nered from the motion paper and the affidavits in support is for the following orders:– (i) AN ORDER of declaration that they are entitled to interest on the said sum of N5,863,960 from 16th April, c 1987 to 18th April, 1989. (ii) AN ORDER of court fixing the interest rates payable on the said sum of N5,863,960 as being the interest rates prevailing from time to time between 16th April, 1987 d and 8th May, 1991. 2. This Honourable Court in its Ruling of 7th June, 1991, which is valid and subsisting, held inter alia as follows:– ‘. . . I refer to the court orders of 18/4/89 and hold that e the interest became payable from 18/4/89 and to the court order of 9/7/90 and hold that the accrued interest therein is the interest from 18/4/89 to 9/7/90 and now up till 7/5/91 when the bank paid the N5.8m to First City f Merchant Bank.’ 3. The Ruling of 18th April, 1989, did not state any rate of interest as payable by the bank and the judgment creditors have not filed an application to amend or vary the said Rul- ing nor have they shown that any error was committed by g the court in reaching its Ruling of 18th of April, 1989. 4. This Honourable Court is functus officio in this matter.” The learned trial Judge heard the preliminary objection and, h on 30th July, 1991, ruled on the preliminary objection thus:– “Now, the bank having paid the interest can this Court now proceed to determine the adequacy of amount of interest paid. It is my view that the bank having paid interest and the Court Order did not i state the rate of interest. This court has become functus officio. What makes the court functus officio is not the Court Order of 9/7/90 but the payment of interest as ordered by the court. The notice of preliminary objection succeeds. The judgment creditor’s Application dated 18/6/91 is hereby struck out.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Kola Koiki and others v. First Bank of Nigeria Plc 9 a The appellants were dissatisfied with this ruling and filed a notice of appeal dated 31st July, 1991 against the ruling on 4 grounds. This is the appeal before this Court. b The appellants and the respondents filed their briefs of argument in this Court and exchanged them among themselves. For the first to the third appellants the issues for determination in the appeal are formulated thus:– c “(1) Whether in view of the objection raised by Counsel to the appellants to the sum offered as accrued interest in purported compliance with the court’s orders of 18th April, 1989 and 9th July, 1990 by Counsel for the appellants, the learned trial Judge could reasonably have been satisfied that d the respondent had complied with the said orders. (2) Whether in view of the conclusion on Issue (1) above, the learned trial Judge should have taken all steps to ensure that all issues properly arising between the parties in the matter e before him were finally determined on the merit and that his orders were not being treated with levity.” The fourth appellant set out only one issue for determination and it is this:– f “Whether the learned trial Judge could reasonably have been satisfied that the payment of the sum of N469,116.80 as interest by the respondents was sufficient compliance with the court orders of 18th April, 1989 and 9th July, 1990 so as to oust his jurisdiction to entertain the first to third appellants’ application.” g And for the respondents, the only issue for determination in the appeal was:– “Whether in the light of the circumstances of this case the Hon- ourable Trial Judge was correct in holding that he lacked jurisdic- h tion to entertain the appellants’ application dated 1st June, 1991.” Looking at the above issues raised by the parties in their briefs, I am of the view that issue (1) in the brief of the first to third appellants is the same as those raised in the fourth i appellant’s and the respondent’s briefs. But the date of the appellants’ application in question was 18th June, 1991 and not 1st June, 1991. I also am of the opinion that issue (2) of the first to third appellants can conveniently be argued in j their first issue. Therefore, I think the issue raised by the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 10 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. fourth appellant in his brief is in my view the correct and a only issue which arises for determination in this appeal having regard to the grounds of appeal filed. I therefore adopt it accordingly in this appeal. b In this Court, the learned Counsel for the first, second and third appellants relied upon and adopted his brief. The learned Counsel, however, submitted that the trial court has the powers of a superior court of record to correct a mistake c in his judgment arising from accidental slips or omissions and to determine issues or controversies between the parties. He then referred the court to section 14 of the High Court Law of Lagos State and the cases Umunna v. Okwuraiwe d (1978) 6–7 S.C. 1 and Obiora v. C.O.P. (1990) 7 N.W.L.R. (Part 161) 222 at 230 in support. He urged the court to allow the appeal. For the fourth appellant, Mr Uwechie, S.A.N., also adopted e his brief and submitted that, by directing the appellants’ Counsel to file an application to determine the interest on the amount deposited in the respondent’s bank, the learned trial Judge was making an order and admitting that there was f something missing in his judgment. Therefore, learned S.A.N. argued, that the learned Judge had a duty to proceed to determine the interest under Order 22 Rule 6 of the High Court of Lagos (Civil Procedure) Rules, 1972. He also urged g the court to allow the appeal. Mr Abiru, for the respondents, adopted his brief of argument and contended that in determining the issue of interest h on the amount deposited according to the application of the appellants, evidence must be called and this entails another proceeding altogether. Learned Counsel further argued that, since the purport of the application was to correct the error or omission in the judgment of the trial court, it is wrong to i ask the trial court to hear further evidence involving the determination of an entirely new matter. Therefore, the learned Counsel submitted that the trial court had no jurisdiction to entertain the appellants’ application which went j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Kola Koiki and others v. First Bank of Nigeria Plc 11 a beyond correcting an error or omission in the trial court’s judgment. Learned Counsel earlier contended that the directive by the b learned trial Judge was not an order of court, and that even if it was construed to be one, the appellants were not bound to comply and the trial court could not confer jurisdiction on itself by making such an order. c Mr Mbanugo, for the first to third appellants, submitted in reply that the trial court had jurisdiction in the circumstances of this case to determine the rate of interest payable even if it meant taking further evidence. He relied on section 14 of d the High Court Law (Lagos State). Mr Uwechie, S.A.N., for the appellant, also agreed with him on this. Before I go into the issues involved in this case, I wish to observe that the learned trial Judge, in dismissing the defen- e dant’s application for stay of execution of his judgment on 9th July, 1990, made an order on the respondents who were not a party to the action by ordering them to pay the amount preserved with accrued interest. This is obviously not correct f in law. See the case of Reynolds Construction Co v. RBB (1993) 6 N.W.L.R. (Part 297) 122 at 130 where Uwaifo JCA said:– “It is the law that as a general rule a judgment cannot be given g against a person who was not a party to an action. This derives from the following known principles: (a) Audi alteram partem, hear the other party – as no one should be condemned or damnified unheard; (b) Civil cases are decided on issues joined or admit- h ted or conceded by parties to the respective suits. So the position is that no person is to be adversely affected by a judgment given in an action to which he was not a party, apart from the known technical exceptions: See Osunrinde v. Ajamogun (1992) 6 N.W.L.R. (Part 246) 156 at 187 per Ogundare, JSC.” i I agree entirely with my learned brother on this although this will not be relevant here since no appeal was filed on the issues either by cross-appeal or respondent’s notice. But it is interesting to further observe that in a similar application by j the appellants in this Court, this Court, in granting the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 12 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. application, ordered the defendant (now fourth appellant) to a pay the money with interest. This should be the correct order to make. As I said earlier this is only an observation which has no bearing on the decision I am making in this appeal. b The general principle of law is that a Judge or court has jurisdiction to amend his or its judgment or order whether enrolled or not, and whether the error arose from a clerical slip or not, provided that the judgment or order concerned c does not express the meaning of the judgment or order which was intended by the Judge or court (see Makanjuola v. Balogun (1989) 3 N.W.L.R. (Part 108) 192 at 207; In Re Swiss Mellor v. Swire (1985) 20 Ch.D. 239 at 246). Explain- d ing the general principle in a clearer form, Akpata JCA (as he then was), in the case of NICON v. P.I.E. Co Ltd (1990) 1 N.W.L.R. (Part 129) 697 had this to say at 708:– “It must also be made clear that a Judge, after making an order or e giving a judgment, becomes functus officio, and has no power to review such order or judgment, except in cases of corrections of mistakes or accidental slips. Under the principle of ‘Slip-Rule’ the court has power to amend its own judgment so as to correct and f bring the judgment to carry out the meaning which the court intended. Such amendment would, however, be improper if it has the effect of varying a judgment or order which correctly represents what the court decided. (See Asiyanbi v. Adeniyi (1967) 1 All N.L.R. 82 at page 86)” (italics mine) g Ogundare JSC also touched on this point as to the limits of a Judge to amend his judgment or order and how to invoke the exercise of that power, when in Olurotimi v. Ige (1993) 8 N.W.L.R. (Part 311) 257 at 274 he said:– h “The power of a Judge to amend his judgment is limited only to where there is a clerical mistake in the judgment or order, or an error arising from an accidental slip or omission. And the inherent power of a court to vary its own orders relate only to where it is i necessary to carry out its own meaning and to make its meaning plain – see Thynne v. Thynne (1955) 3 All E.R. 129. The error or omission must be an error in expressing the manifest intention of the court. The correction can only be made on motion” (italics mine). j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Kola Koiki and others v. First Bank of Nigeria Plc 13 a What I understand from the above quotations is that a Judge can amend his judgment or order, passed or entered, only where it is found necessary to carry out the meaning which b the Judge intended. It cannot be done to vary the judgment or order. Having laid down the general principle, let me now examine what happened in this case and apply the principle to it. c On 18th April, 1989, on the application of the first to third appellants, the learned trial Judge ruled as follows (pages 12–13 of the record):– d “An order of preservation (sic) Injunction is hereby made restraining the defendant B.V. Magnussen (carrying on business as UNITED PRODUCERS) from withdrawing or disposing or dealing in any way with the sum of N5,863,960 with interest thereon deposited in account No. 01307718 and/or account No. 01307750 e with the First Bank of Nigeria Limited of 35 Marina Lagos deposited therein by the said defendant, his agent, servant or any person acting on his behalf upon discharged bank guarantee, pending the determination of the substantive suit in this action” (italics mine). f On 7th July, 1990, the learned trial Judge dismissed the application of the defendant (now fourth appellant) for stay of execution of his judgment, but made a further order which reads thus (see enrolled order on page 14 of record):– g “The application for stay is hereby dismissed. The First Bank of Nigeria Limited shall pay the amount preserved with interest that has accrued thereon to the First City Merchant Bank Limited of Primrose Towers, 9th Floor, 17A Tinubu Street, Lagos. The said City Merchant Bank Limited shall give its bank’s guarantee to the h Judgment Debtor within 30 days of the receipt of the money from the First Bank of Nigeria limited, pending the determination of the appeal in this suit” (italics mine). Another application for stay of execution filed by the defen- i dants in this Court was however granted on 9th April, 1991, on condition that the defendants pay the money to the First City Merchant Bank Limited within 30 days thereof as ordered by the learned trial Judge. On 8th May, 1991, a day j before the expiration of the 30 days, the respondent paid the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 14 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. money to the First City Merchant Bank Limited without any a interest. After certain contempt proceedings in the trial court the sum of N469,116.80 was paid by the respondents by cheque on 14th June, 1991, as interest on the money in com- b pliance with the trial court’s order.

As stated by Ogundare JSC in Olurotimi v. Ige (supra) the application to correct a judgment or order shall be made on c motion. This was what happened in this case when the appellant filed the motion on notice dated 18th June, 1991. The whole application was set out earlier in this judgment but for the sake of clarity and proper understanding of the situation let me here again set out the prayers therein:– d

“1. That the First Bank should give particulars of their computation culminating in the sum of N469,116.80, which the said bank paid to the Judgment Creditors through their bank, the First City Merchant Bank Limited, Primrose Tow- e ers, Tinubu Street, Lagos, as accrued interest between 18th day of April, 1989 and 7th day of May, 1991.

2. That evidence be given by parties as to the determinations f of the interest that actually accrued on the principal sum of N5,863,960, since the said money has been deposited against guarantee at the First Bank of Nigeria Limited on the 9th day of April, 1987 and paid out on the 8th day of May, 1991.” g The motion was supported by a ten-paragraph affidavit. The respondents filed a counter-affidavit of 11 paragraphs in answer to the application. The main issue in dispute there- h fore between the parties was, what was the meaning of “interest” in the context of the order of the learned trial Judge made on 9th July, 1990? According to paragraphs 5 and 7 of the appellant’s affidavit in support of the application (page 63 of the record), “interest on the money means more than i N3 million”, whereas the respondents in their counter– affidavit, paragraphs 4 and 6, maintained that “interest” on the money means the sum of N469,116.80 which they have paid. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Kola Koiki and others v. First Bank of Nigeria Plc 15 a Let me now examine the relevant orders by the learned trial Judge in order to determine what is the meaning of interest as he intended in the orders. In the first preservative b order which he made on 18th April, 1989, he referred to “the sum of N5,863,960 with interest thereon”, pending the determination of the action. And in the second order dated 9th July, 1990, the learned trial Judge talked of “the amount c preserved with the interest that has accrued thereon.” This second order in my view, seemed to have put together the two orders in one. In my view, the second order is saying that the respondents shall pay the amount preserved, that is the sum of N5,863,960 plus the interest that has accrued d thereon. But the period over which the interest was to be derived or calculated has not been specified in the order, though the amount was to be paid to the First City Merchant Bank Limited. Also the rate of interest payable on the e amount has not been specified in the orders either. And although it is reasonable to say that in this world of commercial enterprises, a deposit of such a large amount of money as in this case made in a commercial bank must of f necessity draw some interest unless there is an agreement to the contrary, there is a need to specify the rate of interest chargeable and the period over which such interest shall be charged except where it is covered by statute or law. No g such agreement was applicable here.

On 14th June, 1991, when the respondent’s Counsel gave the cheque for N469,116.80 to the trial court representing h the interest on the money concerned, and the first to third appellant Counsel protested, the learned trial Judge observed that the order of the court on 9th July, 1990 did not state the rate of interest. This in my view, amounts to a realisation on i the part of the trial court that there is something missing in the order to make it complete and meaningful. It is as a result of this that the learned trial Judge directed the judgment creditors, first to third appellants, to file a motion j on notice to determine the rate of interest, which they did. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 16 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The filing of the motion on notice in this matter is the a proper step to take in this case (see Order 25 Rule 6 of the High Court of Lagos (Civil Procedure) Rules, 1972). In my view whether the direction by the trial Judge to file it is an b order or not, does not matter at all; what matters is the result.

I have earlier found that the order complained of (9th July, 1990) did not specify the rate of interest chargeable on the c amount nor the period over which the interest is chargeable. The most important point here is this: Is the meaning of the order clear as it stands or does it carry out the meaning which the trial Judge intended? If the answer to this question is in the affirmative, then there is no power to amend the d order. What then is the intention of the learned trial Judge when he made the order complained of. In the preservative order he made on 18th April, 1989, in respect of the same amount, he ordered that the amount be preserved with inter- e est. He did not specify the rate. Therefore in the order of 9th July, 1990, which is under consideration, when he said the amount together with interest that has accrued thereon, it is my view that he meant the bank interest that has accrued on f the amount from the time it was preserved to the time it was to be paid out to the First City Merchant Bank. It is still not clear what bank interest is to be charged on the amount concerned. There is therefore some obvious difficulty in g carrying out the meaning and effect of the order made by the trial court, in that the order did not correctly state what the court actually decided (see Asiyanbi v. Adeniyi (supra), Olurotimi v. Ige (supra); Nicon v. P.I.E. Co Ltd (supra); h Makanjuola v. Balogun (1989) 3 N.W.L.R. (Part 108) 192; Faleye v. Otapo (1987) 4 N.W.L.R. (Part 64) 186; Bakare v. Apena (1986) 4 N.W.L.R. (Part 33) 1).

Looking at the order complained of, even if there was no i apparent error in it, there was some ambiguity in phrasing it and, in my view, could be corrected by the Judge who made it to make it clear. The order as it stands cannot be carried out even by reference to the Banking Act (Cap 28) Laws of j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Kola Koiki and others v. First Bank of Nigeria Plc 17 a Federation of Nigeria, 1990 or any law. Section 15 of the Banking Act merely says:– “15(1) The rate of interest charged on advances, loans or credit b facilities or paid on deposits by any licensed bank shall be linked to the minimum rediscount rate of the Central Bank subject to stated minimum and maximum rates of interest when so approved shall be the same for all licensed banks: provided that differential rates may be c approved for the various categories of banks to which this Act applies. (2) The interest rate structure of each licensed bank shall be subject to the approval of the Central Bank.” d In this case, even if the amount involved is taken to be a deposit, no rate of interest was fixed by the said section 15. So the intention of the court in this case to pay interest cannot be carried out because the rate of interest was not speci- e fied in the court order. It is also my view that the power to determine the rate of interest in this case is solely that of the learned trial Judge who made the order and should not be left to the parties or f any of them to do so or to interpret it as they wish. In this case, the respondents who paid the sum of N469,116.80 worked out their own rate of interest and the learned trial Judge, in overruling the appellant’s preliminary objection, g on page 129 of record said:– “It is my view that the bank having paid interest and the court order did not state the rate of interest, this Court has become functus officio.” h By this statement the learned trial Judge has allowed the respondents to determine the rate of interest for him which he should not have done, and since he agreed that his order did not specify the rate of interest, he had no reason at all to i accept the interest paid by the respondents as complying with his order. It is my respectful view, therefore, that the learned trial Judge was wrong in holding that, because the respondents have paid what they considered to be the inter- j est, he was functus officio. I therefore find that the learned [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 18 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. trial Judge has both the duty and the jurisdiction to deter- a mine the appropriate rate of interest chargeable on the judgment debt to give full meaning to the order he made on 9th July, 1990. From what I have said above, this appeal suc- b ceeds and it is allowed. The preliminary objection of the respondents at the trial court is hereby over-ruled. I hereby order that the learned trial Judge, Adeyinka J, c should proceed to hear and determine the first to third appellants’ application dated 15th June, 1991 on its merits. I award N1,000 costs in favour of first to third appellants d and N1,000 in favour of fourth appellant. SULU-GAMBARI JCA: I entirely agree with the judgment just delivered by my learned brother, Kalgo JCA, a draft of which I have been privileged to read. e The appeal therefore succeeds and it is accordingly allowed. I also abide with the order of costs as assessed in the leading judgment. UWAIFO JCA: I have had the benefit of reading in advance f the judgment of my learned brother, Kalgo JCA, just delivered. He has fully stated the facts of the matter and dealt with the main issue for determination. I completely agree that the true interest payable on the amount in question g ought to be ascertained in the circumstances and that the learned trial Judge erred in declining to do so upon the court process before him on the ground, as he said that he had become functus officio. h He was certainly not functus officio as I shall show. But I would first like to make it clear that by this judgment I am in no way subscribing to any view that the amount ordered by the learned trial Judge to be preserved was enti- i tled to attract interest in favour of the appellants before the date of judgment in the substantive suit in respect of which the order for preservation was made. This is so because, until a plaintiff succeeds in proving his entitlement, his right j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA Kola Koiki and others v. First Bank of Nigeria Plc 19 a to any property which is the subject matter of the cause or matter, or as to which any question may arise therein (except in the exceptional situation of declaratory judgments which b in essence relate to already existing rights) does not accrue. Where, therefore, a plaintiff cannot justifiably lay claim to a fund or money without first establishing an appropriate existing right, i.e., right conferred by statute or contract (see c paragraphs 6/2/10 to 6/2/15 at pages 37–40 of the Supreme Court Practice of England 1988 edition, Volume 1), he cannot get interest on it before judgment which creates his entitlement to it. It is therefore a matter for regret that the learned trial Judge adopted a different approach by the or- d ders he made on 18th April, 1989 and 7th July, 1990, compounded by the fact that an amount yet to be proved as owing was to be made a deposit in a bank account to attract interest from where it was ordered to be transferred to an- e other bank. Having said that, it is necessary to state that the law requires that deposits made into any licensed bank for the f purpose that they shall attract interest shall be in accordance with the guidelines under section 15 of the Banking Act (Cap 28) Volume II Laws of the Federation of Nigeria, 1990 which provides:– g “15(1) The rate of interest charged on advances, loans or credit facilities or paid on deposits by any licensed bank shall be linked to the minimum rediscount rate of the Central Bank subject to stated minimum and maximum rates of interest, and the minimum and maximum rates of inter- h est when so approved shall be the same for all licensed banks: provided that differential rates may be approved for the various categories of banks to which this Act applies. i (2) The interest rate structure of each licensed bank shall be subject to the approval of the Central Bank.” It follows, in my view, that it would not be the duty of a court to fix the interest to be paid on a deposit. That is a j function which must be performed comfortably within the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 20 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. ambit of section 15 of the Banking Act. The interest must a not be less than the minimum or more than the maximum rate approved by the Central Bank. The parties can agree on interest within the limits. In the absence of any such agree- b ment, the interest cannot be less than the approved minimum, and perhaps it would be fair to adopt the going prime rate in the said bank at the particular time for a similar amount of deposits. No party can adopt an arbitrary rate of c interest on deposits and the court cannot impose it. It is enough for the court to direct that an amount be paid into an interest-yielding account. In my view, the orders of 18th April, 1989 and 7th July, 1990 made by the trial court ought d to be taken to imply this and no more. What rate of interest was in fact used by the bank concerned becomes a matter of evidence. The learned trial Judge seemed to have realised in the course of argument when his attention was drawn by Mr Adeoye, Counsel for one of the parties, to the function of e the Central Bank in relation to interest rates, that the interest rate appropriate to the deposit in the present case had to be ascertained. He said:– f “The order of the court of 9/7/89 did not state the rate of interest. Q: What should be the rate of interest? This question can only be answered by a further argument by both parties. I direct that the judgment creditor do file an application on notice for the determination of the rate of interest applicable and g both parties will argue same. In the meantime, in view of the cheque shown to the court by the contemnor (sic) I will release the contemnor (sic) on his personal recognisance pending the determination of the issue of the rate of interest. h Otunba Afolabi Olasope is hereby released on his personal recognisance pending the determination of the rate of interest of money preserved by the court order of 9/7/89 (sic). Suit is adjourned to 21/6/91 for mention.” This was a conditional order of discharge when an alleged i contemnor (Mr Olasope) of the order of the court for the payment of a “preserved money” transferred by one bank to another bank together with accrued interest was cited for contempt. He was an officer of the First Bank of Nigeria Plc, j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA Kola Koiki and others v. First Bank of Nigeria Plc 21 a the present respondent. The order alleged to have been breached by him was one made on 9th July, 1990. The preserved money, the sum of N5,863,960 had been paid accord- b ingly by the First Bank but without interest. When the contempt proceeding for the non-payment of interest was being heard, the bank produced a cheque for N469,116.80 as accrued interest but this was disputed by the judgment credi- c tor as representing the true interest. It was when the question of the quantum of interest due and payable by the respondents was raised that the trial Judge decided not to bring the contempt proceeding to an d end. He merely gave a conditional discharge to Mr Olasope “pending the determination of the issue of the rate of interest”. The proceeding was then adjourned. The Judge had a duty to complete the task of coming to a final decision in the e said proceeding on the issue of interest. That would help in resolving the question whether the respondents were in contempt of the court order for them to pay the accrued interest so as to properly bring the contempt proceeding to f an end. Such ending is an absolutely necessary requirement in the judicial function. Until that is met, a court cannot be said to be functus officio in respect of a matter calling for its decision one way or another so that it could be said to have g “exhausted all the jurisdiction it had in the matter” and there is nothing left for it to decide (see Omoregbe v. Lawani (1980) 3–4 S.C. 108 at 129). The learned trial Judge was therefore in error to have held h that he was functus officio simply because the respondents paid the disputed interest calculated by them upon a rate needed to be justified. He had not resolved the issue of interest and brought the contempt proceeding to a final con- i clusion. He must proceed to do so, whether he comes to the right or wrong decision, so long as he exhausts his jurisdiction in the matter. The situation therefore was this: The learned trial Judge j made an order for an amount of money to be paid into a [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 22 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. deposit account with the respondents. The amount was to a yield interest. The rate of interest must by law comply with certain guidelines. In order to ascertain the appropriate rate of interest on the said amount in the circumstances and b therefore the quantum of interest for the relevant period, further investigation must necessarily be carried out since the respondents were not seen to have supplied the due information. This was when the issue that the respondents c failed to pay interest came before him. The appellants say it was not enough for the respondents to offer any amount as interest when the basis for its calculation is not disclosed and when the appellants relying on a different figure had d disputed that amount. The learned trial Judge considered that further hearing would be needed and he made an order to that effect in the process of the contempt proceedings that the respondents failed to pay interest due and payable. There is no doubt the learned Judge up to that point acted within e the law to arrive at the justice of the matter. I think the preliminary objection upon which there was the contention that the trial Judge had become functus officio f was without merit and ought to have been overruled by him. I too will allow the appeal and overrule that objection. I will also order the learned trial Judge, Adeyinka J, to hear and determine the application dated 15th June, 1991 on its merits. I award N1,000 costs in favour of the first to third appel- g lants and N1,000 in favour of the fourth appellant. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

National Bank of Nigeria Ltd v. Savol West Africa Ltd 23 a National Bank of Nigeria Limited v. Savol West Africa Limited b COURT OF APPEAL, LAGOS DIVISION UWAIFO, AYOOLA, PATS-ACHOLONU JJCA Date of Judgment: 22 FEBRUARY 1994 Suit No.: CA/L/48/88 c Banking – Banker and customer relationship – Customer instructed banker to pay a third party upon performance of the contract – Banker confirmed to the third party its will- ingness to pay as instructed by customer – Third party per- d formed the contract and requested banker to pay – Banker claimed that customer countermanded payment and refused to pay third party – Whether written confirmation of banker to pay third party could be countermanded by customer e Contract – Privity of contract – Whether a third party can enforce a contract made in its favour against a party to the contract f Facts The second defendant bought 65 containers of stockfish from Mr James Beirne and on 7th July, 1986, they entered into a written agreement with the plaintiff/respondent to g clear, forward and deliver the consignment at a contract price of N2.1 million. The first defendant/appellant bank held funds on behalf of Mr James Beirne, the importer of the stockfish and vendor to the second defendant. h Mr James Beirne was mentioned in the agreement (though not a party to it) that he would give instructions to the first defendant/appellant bank to disburse the funds in accordance with the terms of payment of the said contract. It was agreed i that an advance payment of N525,000 would be made to the plaintiff/respondent as soon as the fifth defendant agreed to make the purchase of the stockfish from the second defendant. The balance of N1,575,000 was to be paid immediately j after 96 hours of the final delivery of the stockfish. The first [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

24 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. defendant/appellant bank would confirm in writing to the a plaintiff/respondent the said terms of payment as they would be instructed. It was agreed that the demurrage and rent incurred after two weeks of the berthing of the consignment b would not be part of the contract price. Mr James Beirne by a letter dated 10th July, 1986 instructed first defendant/appellant to pay the plaintiff/ respondent as stated above. The first defendant/appellant by c a letter dated 4th August, 1986 confirmed to the plaintiff/ respondent that the sum of N525,000 would be paid immediately and the balance of N1,575,000 would be paid four days after delivery of the goods as instructed by their cus- d tomer, Mr James Beirne. Consequently, the plaintiff/respondent wrote on 24th October, 1986 to the first defendant/appellant bank informing them that the entire consignment of stockfish had been delivered by them to the e designated warehouse and requested for the payment of the balance of N1,575,000. However, the first defendant/appellant refused to pay the plaintiff because Mr James Beirne countermanded his earlier instructions and instructed f them not to make any further payments to the plaintiff/respondent. They also claimed that first defendant/appellant was not a party to the contract made between plaintiff/respondent and g the second defendant and although the first defendant/ appellant wrote the letter dated 4th August, 1986, the plaintiff/respondent did not offer any consideration. h The trial Judge gave judgment in favour of the plaintiff/ respondent and held that the balance due and payable by the first defendant/appellant was N825,000 since the plaintiff/ respondent had admitted receipt of N1,275,000. Dissatisfied with the judgment, the first defendant/appellant appealed to i the Court of Appeal and contended that there was no contractual relationship between the plaintiff/respondent and the first defendant/appellant and that there was a valid countermand. The plaintiff/respondent also cross-appealed that the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

National Bank of Nigeria Ltd v. Savol West Africa Ltd 25 a sum of N1,575,000 ought to have been awarded in their favour. The Court of Appeal dismissed the appeal and allowed the cross appeal in part. b Held – 1. The first defendant/appellant was liable to pay the plaintiff/respondent the balance of the contract sum because c the letter written to the first defendant/appellant by Mr James Beirne instructing payment to the plaintiff/ respondent upon delivering the stockfish was not a cheque which could be countermanded. d 2. The first defendant/appellant could not rely on the so- called countermand because they did not tender sufficient information to prove that the instruction was actually countermanded by Mr James Beirne. e 3. Even if the first defendant/appellant had tendered the countermand instruction on the basis of which they refused to pay the plaintiff/respondent, they would still be f liable to pay the balance of the contract sum. 4. There was privity of contract between the plaintiff/ respondent and the first defendant/appellant and there was valuable consideration for the contract since the g plaintiff/respondent performed the contract on the strength of the first defendant’s/appellant’s undertaking to pay them. h 5. Since the first defendant/appellant was not a party to the agreement dated 7th July, 1986 where it was stated that rent and demurrage would not be borne by the plaintiff/ respondent after the first two weeks of berthing of the i consignment, they could not be made to bear any burden not part of the obligation stated in their letter dated 4th August, 1986. Appeal dismissed. j Cross-appeal allowed in part. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

26 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Cases referred to in the judgment a

Nigerian Enahoro and Co Ltd v. Bank of West Africa Limited (1971) b 1 NCLR 180 Iga v. Amakiri (1976) 11 S.C. 1 at 12–13 Macaulay v. NAL Merchant Bank Limited (1990) 4 N.W.L.R. (Part 144) 283 c Majekodunmi v. National Bank of Nigeria Limited (1978) 3 S.C. 119 at 127 Nipol v. Bioku Investment and Property Co Ltd (1992) 3 d N.W.L.R. Part 232 727 Nishizawa Limited v. Jethwani (1984) 12 S.C. 234 Okambah Ltd v. Sule (1990) 7 N.W.L.R. (Part 160) 1 Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723 at e 741–742 Sabbach v. B.W.A. Ltd (1966) 1 All N.L.R. 240 Sodipo v. Lemmikainen (1986) 1 N.W.L.R. (Part 15) 220 at f 230 Thirwell v. Oyewunmi (1990) 4 N.W.L.R. (Part 144) 384 at 406 UTC (Nig.) Ltd v. Pamotei (1989) 2 N.W.L.R. (Part 103) g 244 at 282–283

Foreign Alder v. Moore (1961) 2 Q.B. 57 h Barclays Bank Limited v. Quistclose Investments Limited (1970) A.C. 567 Currie v. Misa (1875) L-.R.L 10 Ex 153 i Jacob v. Booth’s Distillery Co (1901) 85 LT 262 Jefford v. Gee (1970) 2 Q.B. 130 Les Affreteurs Reunis v. Leepold Walford (London) Ltd (1919) j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

National Bank of Nigeria Ltd v. Savol West Africa Ltd 27 a London Chattham and Dover Railway Co v. South Eastern Railway Co (1893) A.C. 429 Lowe v. Lombank Lambank Limited (1960) 1 W.L.R. 196 at b 204 New Zealand Shipping Co Ltd v. A.M. Satterthwaite and Co Ltd 1975 A.C. 154 Performing Night Society Ltd v. London Theatre of Varieties c (1924) A.C. 1 Riches v. Westminister Bank Limited (1943) 2 All E.R. 725 Scotson v. Pegg (1861) 158 E.R. 121 at 123 d Shadwell v. Shadwell (1860) 142 E.R. 62 Thomas v. Thomas (1842) 2 Q.B. 851 Trans Trust S.P.R.L v. Danubiam Trading Co Ltd (1952) 2 e Q.B. 297 Williams Brandt’s Sons and Co v. Dunlop Rubber Co (1905) A.C. 454 f Statutes referred to in the judgment Nigerian Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990, section 220(2), (4) g High Court Law of Lagos, 1955, section 12

Foreign h Judgment Act of 1838, section 17 Law Reform (Miscellaneous Provisions) Act, 1934 of Eng- land, section 3 i Nigerian rules of court referred to in the judgment High Court of Lagos State (Civil Procedure) Rules, 1972, Order 10 Rule 1 High Court of Western State (Civil Procedure) Rules Cap 44 j Order 35 Rule 10 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

28 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Books referred to in the judgment a Black’s Law Dictionary Maitland Selected Essays, 1936, page 129 b Counsel For the appellant: Obe (Mrs) (with her Shenjobi and Craiss) For the respondent: Lamuye (with him Dopamu) c Judgment UWAIFO JCA: (Delivering the lead judgment) The two appeals in this case against the decision of Agoro J given on d 23rd December, 1987, at the Lagos High Court deal with a scenario which raises some important issues of law manifested in three aspects. There is a contract between A (the plaintiff) and another. A third person (B) not a party to that e contract but acting in pursuance of instructions given thereunder mandates C (the defendant) to confirm to A how payment will be made by him (C) to A upon his performance of the contract, from B’s funds with C. C communi- f cates the confirmation in writing to A stating the terms of payment which include assurance of payment on performance. A says he has performed. C defaults to pay in compliance with the written confirmation, and pleads: first aspect – that there is no privity of contract between him and A; sec- g ond aspect – that there is no consideration for that confirmation; third aspect – that B countermanded the mandate for payment. The question is whether a good defence on the face of it to proceedings under Order 10 of the High Court h of Lagos State (Civil Procedure) Rules, 1972 has been raised by C in the circumstances. On 24 March, 1987 the plaintiff commenced an action against five defendants in which he claimed in the writ of i summons for the sum of N1,575,000 with 13% interest per annum from 1st November, 1986 until the date of judgment and thereafter interest at 6% per annum until the date of final payment. The writ of summons was accompanied by a j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 29 a statement of claim. Thereafter, on 11th May, 1987, the plaintiff took out a summons under Order 10 of the High Court of Lagos State (Civil Procedure) Rules, 1972 for final b judgment against the first and second defendants. The writ of summons and statement of claim were later amended, the claim in the amended statement of claim reading:– “WHEREOF the plaintiff claims against the first and second de- c fendants jointly and severally the sum of N1,575,000 (One million, Five Hundred and Seventy-Five Thousand Naira) being the unpaid balance of the agreed fee (contract price) of N2,100,000 (Two Million One Hundred Thousand Naira) for the clearance and delivery by the plaintiff of 65 (40) containers of stock-fish from d shed 17, Apapa Port Complex, Apapa, Lagos (of which Mr James Beirne was vendor and the third defendant was the consignee) and delivery of which was duly made by the plaintiff to the fifth defendant, and which sum the first defendant has refused, failed and or neglected to pay to the plaintiff despite the instruction of Mr e James Beirne to the first defendant to that effect in accordance with the agreement between the plaintiff and the second defendant dated 7th July, 1986 and the first defendant’s undertaking made to the plaintiff by their letter dated 4th August, 1986. 13% interest on f the said sum of N1,575,000 (One Million, Five Hundred and Sev- enty-Five Thousand Naira) from the 1st day of November, 1986 till the date of judgment and thereafter interest at the rate of 6% per annum till the date of final judgment.” g In the course of the proceedings the action was discontinued against the fourth defendant (James Beirne) and also the third and fifth defendants were struck off the action. The motion for summary judgment was supported by affidavit verifying the cause of action and amount claimed to which h documents were exhibited. I shall draw attention to some of them. But I shall do so in the course of stating the salient facts. The second defendant bought 65 containers of stockfish from Mr James Beirne. On 7th July, 1986, they entered i into a written agreement with the plaintiff to clear, forward and deliver them. The contract price for this was N2,100,000. The first defendant bank held funds on behalf of Mr James Beirne, importer of the stockfish and vendor to j the second defendant. Mr James Beirne was mentioned in [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 30 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the agreement (though not a party to it) that he would give a instructions to the first defendant bank to disburse the funds in accordance with the terms of payment of the said contract price. According to the terms, an advance payment of b N525,000 would be made to the plaintiff as soon as the fifth defendant agreed to purchase the stockfish from the second defendant. The balance of N1,575,000 would be made immediately after 96 working hours of the final delivery of the c stockfish. It was mentioned in the agreement that the first defendant bank (though not a party to the agreement) would confirm in writing to the plaintiff the said terms of payment as they would be instructed. Demurrage and rent incurred d after two weeks of the berthing of the consignment would not be part of the contract price. It was a typical commercial arrangement. By a letter dated 10th July, 1986 addressed by Mr James e Beirne to the first defendant bank, they were given authority to pay the plaintiff as above stated. The plaintiff wrote on 24 October, 1986 to the first defendant bank informing them that the entire consignment of stockfish in 16 containers had f been delivered by them to the designated warehouse. They attached delivery notes. They said in paragraph 1 of the letter:– “You would recall that the balance of N1,575,000 is still due to us g on the above transaction.” They then demanded payment of N1,575,000 “in accordance with your letter of 4th August, 1986”. That letter of 4th August, 1986, was issued by the first defendant bank follow- h ing the written instructions of Mr James Beirne dated 10th July, 1986. The letter addressed to the plaintiff by the first defendant was headed, “RE: SHIPMENT OF 26,000 BALES OF STOCKFISH” and it reads:– i “We refer to the above shipment and confirm that the payments have been agreed as follows:– (a) N525,000 (Five Hundred and Twenty-Five Thousand Naira) paid immediately. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 31 a (b) The balance of N1,575,000 will be paid to you four working days after delivery of the goods to the designated warehouse. Delivery note will be signed by the buyers and sellers. b We confirm that the above arrangement will be honoured by the bank.” The terms of (a) and (b) above were exactly as Mr James Beirne instructed the first defendant bank in writing. How- c ever, instead of the first defendant bank replying to the plaintiff’s letter of 24th October, 1986 by pointing out what the balance was out of the contract price in view of the total money already paid, their reply dated 7th November, 1986 d asked for curious information which does not arise at all from the instructions they got from Mr James Beirne or from the terms of their written commitment dated 4th August, 1986 to the plaintiff. Their said letter of 7th November, 1986 e stated as follows:– “We refer to your letter Ref. SWAL/3010/8601 of 30th October, 1986 demanding the payment of the sum of N1,575,000. Could you let us have a schedule of how the sum of N1,275,000 already f made available to you was disbursed with relevant receipts where necessary.” In my view, this looks a dishonest request, or at any rate an uninformed one, having regard to the circumstances. Which- g ever is the case, the intention or tendency was to stall payment, and it worked. As far as one can see from the role the first defendant bank were required to play in the payment of the contract price to the plaintiff, they have no business h getting involved in the details of how the plaintiff spent whatever money was paid to them. The plaintiff nonetheless explained in their letter of 10th November, 1986. They said the contract sum of N2,100,000 excluded demurrage. They further explained that apart from the initial N525,000 paid to i them, the sum of N750,000 subsequently paid was for demurrage fees. Therefore they concluded that:– “You will thus see that if the sum of N525,000 paid to us initially is added to the demurrage N750,000 it gives the figure of j N1,275,000, but as we have said the demurrage fees is clearly [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 32 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

excluded by the contract and we believe your obligation under the a contract is to ensure full payment once we have delivered – which we have now done to your knowledge. We hope this will enlighten you further on the issue and help you b to make up your minds quickly as regards the payment of our remaining balance of N1,575,000.” Their obligation was obviously to pay the money once delivery notes duly signed to support the delivery of the stock- c fish were brought to their knowledge. This they failed to carry out or to appreciate. In the event, the debt due was not paid. This led the plaintiff to take action in court. In the summons for final judgment, all these facts were d deposed to by affidavit evidence, supported by the agreement between the second defendant and the plaintiff (dated 7th July, 1986), the letter to the first defendant company from Mr James Beirne (dated 10th July, 1986) the letter of e commitment from the first defendant bank to the plaintiff (dated 4th August, 1986), letter of demand including delivery notes to pay balance of contract price from the plaintiff to the first defendant bank (dated 24th October, 1986), the f reply from the first defendant bank seeking information as to disbursement of earlier payments (dated 7th November, 1986) and the reply by the plaintiff emphasising full performance of the contract to the knowledge of the first defen- g dant bank and demanding payment of the balance. In the counter-affidavit to the summons for summary judgment, the first defendant bank said in paragraphs 6, 7, 8 and 14:– h “6. That the first defendant is not a party to the contract made between the plaintiff and the second defendant referred to in paragraphs 5, 6 and 7 of the said affidavit and is not bound by any of the terms thereof. i 7. That although the first defendant wrote the letter referred to in paragraph 8 of the said affidavit, the plaintiff offered no consideration of any kind for any confirmation therein contained, and in the premises. the same is not enforceable against the first defendant. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 33 a 8. That the first defendant acted upon the instructions of its customer, the fourth defendant, in making the said confirmation, and is not a trustee to the plaintiff in respect of the said transaction in any manner whatsoever. b 14. That contrary to paragraph 11 of the said affidavit, upon the refusal of the plaintiff to deliver the said stockfish to the fifth defendant aforesaid, the fourth defendant countermanded his earlier instructions and instructed the first de- c fendant not to make any further payments to the plaintiff.” I shall ignore paragraph 11 (not reproduced) of the counter affidavit which tends to give the impression that the present plaintiff and another were sued for failure to deliver part of d the stockfish at the time. This is because the writ of summons exhibited does not show that it was filed at all, or at any rate on the date it was indicated to have been prepared, which is 26 August, 1986. The implication of that cannot be e overlooked. Again paragraph 13 (not reproduced) of the counter-affidavit seems to suggest that the stockfish was eventually delivered but some of it in a bad state. This will also be ignored as the quantity allegedly bad is not stated. f At the hearing before the lower court of the summons for summary judgment, the submission on behalf of the first defendant bank was that: (1) the first defendant was not a party to the contract, the subject matter of the action; (2) the g earlier instruction by Mr James Beirne was countermanded after the plaintiff failed to deliver the goods. The learned trial Judge said in his ruling inter alia:– “I am satisfied that the plaintiff had delivered the 65 containers h said to contain 26,000 bales of stockfish to the specified warehouse. And since the plaintiff had admitted payment of a total sum of N1,275,000 then it seems to me that the balance due and payable by the first defendant bank would appear to be the sum of N825,000. Finally, with regard to paragraph 14 of the affidavit it is i surprising that the alleged countermand and fresh instruction given by James Beirne has not been filed as an exhibit for perusal by the court. That omission in my view is a fatal error on the part of the bank because it was the duty of the bank to give particulars of the alleged countermand by its customer having regard to the clear j instruction in the letter marked exhibit F.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 34 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Exhibit F is the letter from Mr James Beirne to the first a defendant bank dated 10th July, 1986 earlier referred to in this judgment. The above quoted passage has given rise to the appeal by b the first defendant bank and the cross-appeal by the plaintiff. In the appeal by the first defendant bank, the following issues are set down by them:– “1. Whether the learned trial Judge correctly identified the c defences raised by first defendant bank. 2. Were the defences not considered, namely, (a) No privity of contract between the plaintiff and first defendant; and (b) No consideration moving from the plaintiff to the first de- d fendant, good and arguable defences which ought to have resulted in the first defendant being given leave to defend the action? 3. In meeting the claim for summary judgment what did the first defendant have to do in order to be entitled to leave to e defend the action? 4. Was the learned trial Judge entitled to discountenance the first defendant’s deposition that the fourth defendant (Mr James Beirne) had countermanded the earlier instruction to f pay because no documentary exhibit was produced in respect thereof?” The plaintiff/respondent identified one main issue and four subsidiary issues. The said main issue reads:– g “Whether the appellant has a good defence to the plaintiff’s action to entitle it to an order granting it an unconditional leave to defend the action.” The four subsidiary issues can be made two thus:– h (i) Was there a binding contractual relationship between the plaintiff and first defendant or a trustee/ beneficiary relationship? (ii) Was there a valid countermand which could avail i the first defendant in any event? I shall consider the relationship created by the letter of 4th August, 1986 from the first defendant to the plaintiff which will cover issues 1 and 2 of the first defendant’s appeal and j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 35 a the subsidiary issue (i) of the plaintiff. I shall deal with issue 4 of the first defendant and the subsidiary issue (ii) of the plaintiff together. As a starting point, I shall join issue 3 of b the first defendant with what the plaintiff called the main issue for purposes of discussing the requirements of Order 10 Rule 1 of the High Court of Lagos Rules. Let me reproduce Order 10 Rule 1 of the High Court of c Lagos State (Civil Procedure) Rules, 1972 applicable. It reads:– “1(a) Where the defendant appears to a writ of summons specially indorsed with or accompanied by a statement of d claim under Order 3 Rule 4, the plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts, verifying the cause of action and the amount claimed (if any liquidated sum is claimed) and stating that in his belief there is no defence to the ac- e tion except as to the amount of damages claimed, if any, apply to a Judge in chambers for liberty to enter judgment for such remedy or relief as upon the statement of claim the plaintiff may be entitled to. The Judge there f upon unless the defendant shall satisfy him that he has a good defence to the action on the merits or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, may make an order empow- ering the plaintiff to enter such judgment as may be just, g having regard to the nature of the remedy or relief claimed. (b) If on the hearing of any application under this rule it shall appear that any claim which could not have been specifi- h cally indorsed under Order 3 Rule 4 has been included in the indorsement on the writ, the Judge may, if he shall think fit forthwith amend the indorsement by striking out such claim, or may deal with the claim specially indorsed as if no other claim had been included in the indorse- i ment, and allow the action to proceed as respects the residue of the claim.” The first defendant/appellant in their brief of argument drew attention to Order 14 in the old Rules of the Supreme Court j of England which is the same as the present Order 10 Rule 1 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 36 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. of Lagos State and the observation of Lord Halsbury in the a House of Lords case of Jacob v. Booth’s Distillery Co (1901) 85 L.T. 262, where he said:– “People do not seem to understand that the effect of Order XIV is b that upon the allegation of the one side or the other, a man is not permitted to defend himself in court; that his rights are not to be litigated at all. There are some things too plain for argument; and where there were pleas put in simply for the purpose of delay, which only added to the expense, and where it was not in aid of c justice that such things should continue, Order XIV was intended to put an end to that state of things and to prevent sham defences from defeating the rights of parties by delay and at the same time causing great loss to the plaintiffs who are endeavouring to en- d force their rights.” The plaintiff/respondent in their brief submitted that the purpose of a summary judgment procedure under Order 10 is for the expeditious disposal of claims which are virtually e uncontestable in the sense that the defendant apparently has no defence to them and that in such a situation the plaintiff ought not to be denied his entitlement to an early judgment. This submission is in complete conformity with the above f quoted observation of Lord Halsbury and it is my view, with great respect, that both are flawless in their expression of the purpose and essence of the said order. I think the authorities are agreed on the salutary purpose g and effect of the summary judgment procedure under Order 10. A plaintiff comes to court with a claim stating facts and circumstances entitling him to some rights. He knows or believes that the defendant has no good defence to the claim. h He issues a statement of claim to accompany his writ of summons and then applies in a summons for judgment supported by verifying affidavit evidence and other clear facts of his claim that he be given judgment without the action going to trial. The defendant ought not to be allowed to stop i him in those circumstances from obtaining judgment the way he seeks unless he shows by affidavit evidence that he has a real defence, not a sham defence to the action. He will not be allowed by the court to use delaying tactics to fool j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 37 a anyone and frustrate the plaintiff who ought legitimately to walk away with judgment for his right without much delay and with less expense if this can easily be resolved at that b stage upon the facts or on issues of law. The purpose of the procedure therefore under Order 10 is not to drive the defendant who shows he has a triable issue from the judgment seat. It is to come in the interest of justice to the aid of the c plaintiff whose claim is patently unassailable and where all the facts relied on by the defendant, assuming them to be in his favour, do not amount to a defence in law. There are a host of authorities in support of this proposition (see Nishi- zawa v. Jethwani (1984) 12 S.C. 234; Sodipo v. Lem- d minkainen (1986) 1 N.W.L.R. (Part 15) 220; U.T.C. (Nig.) Ltd v. Pamotei (1989) 2 N.W.L.R. (Part 103) 244; Macaulay v. NAL Merchant Bank Ltd (1990) 4 N.W.L.R. (Part 144) 283; Federal Military Government v. Sani (1990) 4 e N.W.L.R. (Part 147) 688; Okambah Ltd v. Sule (1990) 7 N.W.L.R. (Part 160) 1).

As to the type of affidavit evidence of the defendant that f would suffice, a mere sweeping statement or general denial is clearly insufficient. The affidavit must contain particulars upon which the substance of the facts deposed to or of the defence can be viewed. In other words, sufficient facts and g particulars must be given to show that there is a bona fide defence. It seems undeniable that in a summary judgment procedure, the affidavit (i.e. counter-affidavit) of the defendant does not need less particularisation than what may be h required in pleadings. This is obvious in defences denying indebtedness or of fraud or illegality. Although it is said that a matter of hearsay is admissible in the defendant’s affidavit, it is with a proviso that the sources and grounds of information or belief are disclosed (see Nishizawa v. Jethwani (su- i pra) at page 260; Macaulay v. NAL Merchant Bank Ltd (supra) at pages 306–307).

Coming therefore to the issue of the countermand allegedly j given by Mr James Beirne (fourth defendant) to the first [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 38 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. defendant/appellant, the plaintiff in paragraphs 11 and 12 of a their affidavit verifying cause of action deposed:– “11. That although the plaintiff had duly notified the first defendant of its full performance of the contract and although the b fourth defendant has duly instructed the first defendant to pay the said balance of N1,575,000 to the plaintiff, in accordance with the terms of the agreement, the first defendant has failed, refused and/or neglected to pay the said sum to the plaintiff. Shown to me marked exhibit E and attached c herewith is a copy of the plaintiff’s letter informing the first defendant of the delivery while the letter marked exhibit F is the fourth defendant’s instruction to first defendant to pay the plaintiff. d 12. That upon receipt of the plaintiff’s letter exhibit E the first defendant replied, asking for a breakdown of the plaintiff’s (sic) by their letter of 7th November, 1986, hereby shown to me and marked G while the plaintiff replied by its letter dated 10th November, 1986, hereby shown to me and e marked exhibit H.” I have earlier in this judgment referred to and discussed these letters. In their counter-affidavit the first defendant had only this to say in paragraph 14 in this regard about failure f to pay the plaintiff, apart from also simply saying in paragraph 2 that the contents of the above-quoted paragraphs 11 and 12 are not true. g Paragraph 14 of the counter-affidavit reads:– “14. That contrary to paragraph 11 of the said affidavit, upon refusal of the plaintiff to deliver the said stockfish to the fifth defendant aforesaid, the fourth defendant countermanded his earlier instructions and instructed the first de- h fendant not to make any further payments to the plaintiff.” It seems plain to me that in view of the documentary evidence accompanying the plaintiff’s affidavit which had been placed before the learned trial Judge, sufficient information i about the so-called countermand had not been supplied by the first defendant in their said counter-affidavit. As at 24th October, 1986 the plaintiff had notified the first defendant in writing that they had duly delivered the entire containers of j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 39 a stockfish to the designated warehouse and sent them the delivery notes as evidence. They asked for payment of the balance of the cost of delivery. On 7th November, 1986, b while not disputing such delivery, the first defendant merely asked a diversionary question in writing to know how the money already paid to the plaintiff was disbursed by them. The plaintiff on 10th November, 1986 took the trouble to do c so in writing. Nothing more was heard from the first defendant. So if it is intended by them that a defence of countermand is to be taken seriously upon the available facts, then it was necessary for them to state when indeed that countermand was given by the said Mr James Beirne. This is so d because if the understanding was that the balance should be paid four working days after delivery why was it not paid at the very latest four days after 24 October, 1986, i.e. 29th October? Instead, as at 7th November, 1986, the first defen- e dant decided to write their letter no doubt calculated with a view in future “to dribble and frustrate the plaintiff and cheat him out of the judgment he is legitimately entitled to by their delaying tactics, aimed not at offering any real de- f fence to the action but at gaining time within which (they) may continue to postpone meeting (their) obligation and indebtedness”, if I may borrow words from Aniagolu JSC in Nishizawa v. S.M. Jethwani Ltd (supra) at 278. g Perhaps the first defendant ought to have exhibited the alleged countermand if it was in writing or, if not, depose that it was given orally. That of course would have raised the question why orally when the instruction to pay based sim- h ply on completion of delivery evidenced by delivery notes duly signed was in writing. I suppose the above was the rationale behind why the learned Judge expected a countermand in writing to have been exhibited. The reason for the i alleged countermand is attempted in the said paragraph 14 of the first defendant’s counter-affidavit. That counter-affidavit was sworn by Oluyemi Olukanmi who described himself to be a senior legal officer with the first defendant bank. He j said when the plaintiff refused to deliver the stockfish to the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 40 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. fifth defendant, the fourth defendant countermanded his a earlier instructions for the payment to the plaintiff. He did not say from what source he got that information as to why the fourth defendant reacted that way or indeed how the b fourth defendant got to know about the said failure before he so reacted, and that he (the deponent) believed that source of information. That deposition in paragraph 14 is certainly unreliable (or indeed inadmissible) in the circumstances. I c think on the whole the conditions for admitting such type of affidavit as stated in Macaulay v. NAL Merchant Bank Ltd (supra) at 306–307 are lacking. The learned trial Judge’s decision on it cannot therefore, in my view, be faulted. d There is the submission of the first defendant in its respondent’s brief of argument as to the effect of the alleged countermand. It says:– e “In the present case the first defendant said that the earlier instruction to pay the plaintiff had been countermanded. The plaintiff could only challenge that ‘to the best of its knowledge’. It chose not to pursue its claims against the fourth defendant who could have resolved the issue. f If the matter had gone to trial and the first defendant proved that there was indeed such a countermand, it would have been entitled to succeed against the plaintiff.” g It is quite intriguing the sense in which the “magic” word countermand is used in the above sense. In the oral submission before this Court by Mrs Obe on behalf of the first defendant she appeared to have relied on the notion of h banker/customer relationship under which the first defendant obeyed the said fourth defendant to stop further payment to the plaintiff. As I understand that argument, the first defendant is a bank where the fourth defendant has/had an account as a customer. Out of that account, upon the fourth i defendant’s written instruction to the first defendant which the first defendant also communicated to the plaintiff, money was to be paid to the plaintiff by the first defendant upon the happening of an event. That instruction can be and j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 41 a was countermanded by the fourth defendant. Since there is that relationship of banker and customer between the first defendant and the fourth defendant, the first defendant was b obligated to comply with that instruction irrespective of any other circumstances that might otherwise have been a hin- drance but for that relationship. The plaintiff however submitted that a trust was created for valuable consideration in c favour of the plaintiff by virtue of the agreement of 7th July, 1986 between the second defendant and the plaintiff and also by the letter of 10th July, 1986 by the fourth defendant giving payment instructions to the first defendant for the benefit of the plaintiff and that the trust cannot be unilater- d ally revoked by the first defendant. I do confess that I am unable to see my way clear on the issue of the creation of trustee/beneficiary relationship from e the facts of this case. If there were to be such a trust, it means the first defendant would be the promisor upon a contract made with the fourth defendant (the promisee) on which the third party (the plaintiff) sues the promisor (see Performing Night Society Ltd v. London Theatre of Varieties f (1924) A.C. 1; Les Affreteurs Reunis v. Leopold Walford (London) Ltd (1919) A.C. 801; Williams Brandt’s Sons and Co v. Dunlop Rubber Co (1905) A.C. 454). The first obvious difficulty in talking about a trust in this case is to make g out the contract between the first defendant and the fourth defendant which the plaintiff can sue on. I cannot venture such an assignment based on the facts of this case. In any case the issue of trust does not arise from any of the grounds h of appeal filed. Adverting to the submission about countermand, I am of the respectful view that it cannot avail the first defendant. I do not think the situation here is purely that of banker/ i customer in the ordinary course of countermanding payment or revoking authority as envisaged by law. The question of countermanding payment and the duty of a banker in relation thereto do not arise unless they involve the use of a j cheque. Section 75 of the Bills of Exchange Act (Cap 35) [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 42 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Volume II Laws of the Federation of Nigeria, 1990 (which a came into force on 9th August, 1917) provide for this, and it reads:– “75. The duty and authority of a banker to pay a cheque drawn b on him by his customer are determined by:– (a) countermand of payment; (b) notice of the customer’s death.” So, when a cheque is issued, the drawer is entitled to stop c payment on it by instructing his banker and when the instruction duly gets to the banker he must comply with it irrespective of any other prevailing circumstances known to the banker. d The letter written to the first defendant by the fourth defendant instructing payment to the plaintiff upon delivering the stockfish is not a cheque which can be countermanded as a cheque could. If the instruction in question was withdrawn e and the first defendant decided to comply, their liability or otherwise for compliance will depend on any existing collateral matters relating to the instruction. f I will at this stage correct a misconception. The first defendant in its brief of argument fell into it. The plaintiff in the course of the case stumbled into and out of it. It is about the operative contract in this case. I shall first quote what the first defendant said in its brief of argument together with the g emphasis added by it under “No Privity of Contract”:– “The plaintiff’s claim was clearly based on a contract made between it and the second defendant. The writ of summons claimed:– ‘. . . against the first and second defendants jointly and h severally the sum of N1,575,000 . . . being the unpaid balance of the agreed fee . . . which sum the first defendant has refused, failed and/or neglected to pay to the plaintiff despite the instruction of the fourth defendant in accordance i with the agreements between the second defendant and the plaintiff dated July 7th, 1986 and the first defendant’s letter dated 4th August, 1986’ (emphasis added). There can be no doubt that the agreement the subject of the plaintiff’s claim is the one made between it and the second defendant, j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 43 a and this is repeated in paragraphs 7, 8 and 9 of the statement of claim.” I am compelled to say that the above interpretation of that b excerpt from the writ of summons is clearly wrong. The emphasis made in part of the writ of summons as above should have been extended to the end so as to show that both the agreement between the second defendant and the plain- c tiff as well as the first defendant’s letter of 4th August, 1996 must be relied on. Besides, the amended statement of claim dated 23rd June, 1987 which states the relevant claim is quite clear. I repro- d duced it in full before but for effect I shall do so again as to its relevant portions. It reads inter alia:– “. . . the plaintiff claims against the first and second defendants jointly and severally the sum of N1,575,000 . . . being the unpaid e balance of the agreed fee (contract price) of N2,100,000 . . . for the clearance and delivery by the plaintiff of 65 (40) containers of stockfish . . . and which sum the first defendant has refused, failed and or neglected to pay to the plaintiff despite the instruction of Mr James Beirne to the first defendant to that effect in accordance f with the agreement between the plaintiff and the second defendant dated 7th July, 1986 and the first defendant’s undertaking, made to the plaintiff by their letter dated 4th August, 1986.” The issue must be, what is the effect in law of the said letter g dated 4th August, 1986 which encouraged the plaintiff to fulfil the contract to clear and deliver the stockfish? The case made by the plaintiff properly understood is not founded on paragraphs 7, 8 and 9 of the statement of claim, h but essentially on paragraphs 13, 14 and 15 which read:– “13. The plaintiff avers that despite the fact that they have duly notified the first defendant of their completion of their part of the contract, the said first defendant, as bank trustees, i have failed, refused and/or neglected to pay the said amount due to the plaintiff, contrary to the said agreement between the plaintiff and the first defendant. 14. The plaintiff shall rely at the trial on the first defendant’s letter dated 4th August, 1986 confirming the agreement be- j tween the plaintiff and the second defendant, and promising [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 44 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

to pay to the plaintiff the sum of N1,575,000 four working a days after delivery of the goods to the designated warehouse. 15. The plaintiff avers that although the plaintiff has fully b complied with the first defendant’s letter of 4th August, 1986, the first defendant has failed, refused and/or neglected to pay the said amount to the plaintiff” (emphasis added by me). The learned trial Judge said in his ruling after considering c the statement of claim, affidavits and counter-affidavit before him:– “In view of the foregoing observations, I have come to the conclusion that the first defendant bank failed to meet the case of the d plaintiff by a definite answer to the claim put forward except by slight modification of the amount claimed.” In their brief of argument, the plaintiff submitted inter alia to conclude their argument:– e “It is submitted that . . . the law will not allow a party to resile from a promise given by him to another that that other will be paid for services to be rendered to a third party once the services have been rendered by that other to the third party. . . In the instant case, f the pertinent question is, will equity allow the appellant to resile from its promise or undertaking or confirmation that it will pay to the plaintiff the N2.1 million contract fee as per exhibit C”? I think equity will not permit a person to resile from his promise to another that a certain settled event will remain so g as to save that other, relying on that promise, from acting to his detriment. Section 50 of the Evidence Act and the case of Joe Iga and Amakiri (1976) 11 S.C. 1 at 12–13 cited by the plaintiff in their brief of argument adequately lends sup- h port to this. It is clear that the first defendant’s argument that there was no privity of contract and no consideration was based on a wrong premise because they focused only on the contract i between the plaintiff and the second defendant. Of course that contract is relevant. But the facts upon which an operative contract may be founded and which, I think, the plaintiff eventually relied on are the circumstances and message of j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 45 a the first defendant’s letter of 4th August, 1986 to the plaintiff. What is the legal effect of that letter, the contents of which I have earlier set out? b I shall state the position in summary form. There was already a contract between the second defendant and the plaintiff. By that contract, the plaintiff was to clear from the wharf and deliver stockfish to a designated warehouse, pro- c vided he was paid. It was agreed he would he paid by a third party. The first defendant was nominated as the third party with specific instructions as to the conditions of payment including payment after four days of performance. The first d defendant agreed and communicated these conditions to the plaintiff by their letter of 4th August, 1986. The plaintiff performed the contract as agreed after receiving the said first defendant’s letter. They then demanded payment but after a e long time, the first defendant having failed to pay, the plaintiff sued them. They raised in their defence the issues of no privity of contract, no consideration, and withdrawal of instruction to pay in the form of a countermand as regards f the letter of 4th August, 1986. They in essence pleaded no liability to make further payment to the plaintiff. In very simple form what happened can be put thus: A contract existing between A, B and C encouraged or induced B to g perform it with a promise to pay B the contract price. B performed but C refused to pay, claiming there was no contract between B and him.

I have already dealt with the countermand as it relates to h this case. Let me consider whether there was a contract or agreement between the first defendant and the plaintiff. An agreement is a manifestation of mutual assent by two or more persons to one another. An offer, duly accepted, usu- i ally constitutes an agreement. There must be outward manifestation of the agreement. This results from a promise. A promise in this sense is an undertaking that a certain state of affairs exists or that something shall happen or not happen in j the future (see Lowe v. Lambank Ltd (1960) 1 W.L.R. 196 at [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 46 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

204). The giver of the undertaking is called the promisor. A a promise results from the acceptance of a proposal or offer. Whether that creates a binding, enforceable contract depends on other factors which need not be gone into here. An offer b can be accepted orally, in writing or by conduct duly communicated or known to the offer (see Majekodunmi v. National Bank of Nigeria Ltd (1978) 3 S.C. 119 at 127; Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723 at c 741–742). It is well established that a promise to induce another person to perform a contract he has already entered into with a third party may be binding and enforceable. As in the pre- d sent case, the plaintiff had already entered into a contract to clear and deliver the stockfish with the second defendant. The first defendant then undertook to pay the contract price if the plaintiff would perform that contract: That promise or e offer became a binding contract once the plaintiff by conduct accepted it by clearing and delivering the stockfish. In Scotson v. Pegg (1861) 158 E.R. 121 at 123; Wilde B. observed:– f “It is said, because the plaintiffs, in delivering the coals are only performing that which they were already bound to do. But to say that there is no consideration is to say that it is not possible for one man to have an interest in the performance of a contract made with g another. But if a person chooses to promise to pay a sum of money in order to induce another to perform that which he has already contracted with a third person to do, I confess I cannot see why such a promise should not be binding.” The above principle, in my opinion, covers the present case h without any reservation. This principle has been declared to be good law by the Privy Council in New Zealand Shipping Co Ltd v. AM. Satterthwaite and Co Ltd (1975) A.C. 154 where Lord Wilberforce delivering the majority judgment of i the Board said at 168:– “In their Lordship’s opinion, consideration may quite well be provided by the appellant, as suggested, even though (or if) it was already under an obligation to discharge to the carrier . . . j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 47 a . . . An agreement to do an act which the promisor is under an existing obligation to a third party to do, may quite well amount to valid consideration and does so in the present case, the promisee obtains the benefit of a direct obligation which he can enforce. b This proposition is illustrated and supported by Scotson v. Pegg (1861) 6 H and N 295 which their Lordships consider to be good law.” The dissenting judgments of Viscount Dilhorne and Lord c Simon of Glaisdale did not dispute the correctness of this proposition. I will respectfully adopt it. The facts of the present case have convinced me of the justice, equity and common sense of it. I can well say that the consideration d provided in the case in hand is the risk or detriment undertaken or the forbearance suffered by the plaintiff (the promisee) by being induced by the first defendant’s promise to accept (a) the arrangement of delayed payment by four days e after completion of the delivery of the stockfish; and (b) the credit necessarily given by way of forbearance by the plaintiff by not insisting on payment before performance. There- fore there was privity of contract between the plaintiff’ and f the first defendant and there was valuable consideration for the contract. The reasoning behind the notion of detriment constituting valuable consideration played itself out completely in the g well-known case of Shadwell v. Shadwell (1860) 142 E.R. 62. The facts of that case are structurally on all fours with those of the present case. There, the plaintiff had entered into a contract with A, a third party called Ellen Nicholl h (contract of engagement to marry). The defendant, A’s un- cle, wrote to the plaintiff promising to pay him an annual income as a result of the news of the intended marriage. The plaintiff married A but the annual income was not all paid i during the lifetime of the defendant. The plaintiff sued his estate for the amount on the basis of the letter. He averred:– “That the plaintiff did all things necessary, and all things necessary happened, to entitle him to have the said testator pay to him eighteen of the said yearly sum of £150 each respectively, and that the j time for the payment of each of the eighteen yearly sums elapsed [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 48 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

after he married the said Ellen Nicholl, and in the life time of the a said testator . . .” This averment is like the one made by the plaintiff in the present case in its amended statement of claim. b It is argued on behalf of the defendant that there was no consideration for the promise to pay the annual income. But an enforceable contract supported by consideration was found by the majority, and in the judgment of the court c delivered by Erle CJ, he said at 68:– “. . . I am aware that a man’s marriage with the woman of his choice is in one sense a boon, and in that sense the reverse of a loss; yet, as between the plaintiff and the party promising to sup- d ply an income to support the marriage, it may well be also a loss. The plaintiff may have made a most material change in his position, and induce the object of his affection to do the same, and may have incurred pecuniary liabilities resulting in embarrassments which would be in every sense a loss if the income which had been e promised should be withheld . . .” The same inference of incurrence of pecuniary liabilities can quite justifiably be made in respect of the position in which the plaintiff in the present case were put by the letter written f to them by the first defendant. They would have incurred pecuniary liabilities towards clearance and delivery of the stockfish having been induced by that letter to perform the contract on the terms of credit. The detriment they under- g took would have been compounded by withholding from or denying payment to them contrary to what had been agreed. That detriment is the valuable consideration to support the contract. The old cases define consideration as “something h which is of value in the eye of the law, moving from the plaintiff: it may be some detriment to the plaintiff or some benefit to the defendant” (see Thomas v. Thomas (1842) 2 Q.B. 851). As also said in Currie v. Misa (1875) L.R. 10 Ex i 153:– “A valuable consideration in the sense of the law may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 49 a In view of this binding contract could the first defendant be heard to raise the issue of countermand instruction allegedly given by the fourth defendant even if the said countermand b had been in writing and had been produced? I cannot imagine that they can. Any step taken in the circumstances amounting to a breach of the contract would, on the facts of this case, result in a claim for payment of a debt. A debt is a c definite sum of money fixed by the agreement of the parties as payable by one party in return for the performance of a specified obligation by the other party or upon the occurrence of some specified event or condition (see Trans Trust S.P.R.L. v. Danubian Trading Co Ltd (1952) 2 Q.B. 297; d Alder v. Moore (1961) 2 Q.B. 57). The plaintiff’s action was well founded. The first defendant had no bona fide or good defence to it at all. The learned trial Judge was right to have so held and the appeal must fail. e I now deal with the cross-appeal. The learned trial Judge awarded the plaintiff N825,000 instead of the N1,575,000 claimed. The cross-appeal is on the difference as well as f interest which the learned Judge failed to award although claimed. The first defendant raised objection to the competency of the appeal. It is based on the argument that since plaintiff’s action in the summary judgment procedure failed to the extent of the N750,000 not having been awarded out g of the claim for N1,575,000, then as regards the N750,000 the first defendant must be deemed to have been granted an unconditional leave to defend the action. Therefore, as was contended, section 220(2)(a) of the 1979 Constitution would h apply to deny the plaintiff the right to appeal in respect of the N750,000 that was dismissed. Section 220(2)(a)provides:– i “(2) Nothing in this section shall confer any right of appeal:– (a) from a decision of any High Court granting unconditional leave to defend an action.” The result of that submission is that any item of the claim in j a summary judgment procedure which is disallowed must [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 50 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. mean that the defendant was given an unconditional leave to a defend that item. That is a most ingenious argument worthy of attention. But I am not, with due respect, persuaded by it. It is based on inverse reasoning. Whether a defendant will be b let into defend under the summary judgment procedure will depend on the state of his affidavit evidence. The relevant rules of Order 10 guide the situation. They provide that, unless the defendant shall satisfy the Judge that he has a c good defence to the action on the merits or shall disclose such facts as may be deemed sufficient to entitle him to defend the action generally, he may make an order empow- ering the plaintiff to enter such judgment as may be just, d having regard to the nature of the remedy or relief claimed. That has nothing to do with the error a plaintiff may have made in computing his claim or the misapprehension of the trial Judge of the facts or the law in giving a final decision on the claim. Suppose a plaintiff claims a liquidated sum, e arrived at by putting several figures together. The defendant does not satisfy the Judge that he is entitled to defend the action generally but rather deposes to facts irrelevant to the claim. The Judge allows summary judgment procedure upon f which he was addressed by Counsel. Suppose he gives judgment less than the amount claimed owing to miscalculation or misunderstanding by him. The plaintiff will of course be entitled to appeal on that point to show how the Judge went g wrong. So whether the Judge decides to disallow any part of the claim will depend on how he exercises his power under Rule 1(b) on the hearing of the application for summary judgment. But an unconditional grant of leave to defend h must be a result, in my opinion, of a deliberate and positive attitude of the Judge to the affidavit evidence of the defendant in the exercise of his powers under Rules 5 and 6 in relation to the claim made by the plaintiff by which he i reaches a decision that the case should go to trial. That is when section 220(2) and (4) of the 1979 Constitution applies and says that such grant of leave is not appealable. The objection lacks merit. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 51 a It must be remembered that the action is based on the obligation undertaken by the first defendant in its letter of 4th August, 1986 addressed to the plaintiff. That letter does not b commit it to pay for rent and demurrage. It cannot be made to bear any burden not part of that obligation or that letter. The said sum of N750,000 represented demurrage fees. That much is stated by the plaintiff and found by the learned trial c Judge. The amount cannot be got from the first defendant. It is not party to the agreement dated 7th July, 1986 where it is stated that rent and demurrage would not be borne by the plaintiff after the first two weeks of berthing of the consignment. The second defendant would have been the proper d party to be sued for that amount of N750,000. The cross- appeal on that issue must fail. As to the issue of interest, the learned Judge said:– e “The claim for interest will be refused as being outside the contemplation of the parties.” The plaintiff argued that it is entitled to interest both on the debt from the time when the cause of action arose to the date f of judgment; and after judgment, at a rate of interest allowed on judgment debt till payment of the judgment debt. For the first part of the interest rate, section 3 of the Law Reform (Miscellaneous Provisions) Act, 1934 (England) is relied on. g For the second part, the authority cited is section 17 of the Judgments Act, 1838 (England). Decided cases on these Acts were also cited and passages therefrom quoted copiously in the plaintiff’s/respondent’s brief of argument. I feel h obliged by the industry exhibited by learned Counsel in guiding me by the argument in the brief. Unfortunately, I can see no argument whatsoever canvassed by the first defendant on the issue of interest either in its appellant’s brief i or reply brief. The plaintiff pleaded in its amended writ of summons and amended statement of claim (a) 13% interest per annum on the debt from 1st November, 1986 till the date of judgment; j and (b) 6% interest per annum on the judgment debt till the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 52 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. date of final payment. From the letter dated 24th October, a 1986 (exhibit D) written by the plaintiff to the first defendant informing it that delivery of the stockfish had been completed, and in view of the fact that according to the letter b of 4th August, 1986 (exhibit C) from the first defendant to the plaintiff wherein it is stated that payment be made four days after delivery, it is quite reasonable for the plaintiff to make the date of accrual of its cause of action 1st Novem- c ber, 1986. I will also mention that the verifying affidavit in support of the summons for summary judgment contains the interest claimed by the respondent in its statement of claim as in the writ of summons. d In summary judgment procedure, judgment is obtained by the plaintiff without trial once the Judge is satisfied that there is no defence and no fairly arguable point to be urged on behalf of the defendant (see Sodipo v. Lemmikainen e (1986) 1 N.W.L.R. (Part 15) 220 at 230; UTC (Nig.) Ltd v. Pamotei (1989) 2 N.W.L.R. (Part 103) 244 at 282–283). As far as entitlement to or claim for interest is concerned in such summary judgment procedure, any reference to pro- f ceedings tried in any court must eliminate actual trial but be taken as reference only to the mere procedure of obtaining summary judgment in accordance with the reliefs as claimed. g There is no provision made in the High Court of Lagos Law and the Rules of 1972 made thereunder covering the award of interest on debts or other claims before judgment h or on judgment debt. But section 12 of the High Court Law which came into effect on 31st December, 1955 makes it possible to apply any relevant provisions for this purpose which were in force as at that date in England, that is to say, the practice and procedure of the High Court of Justice in i England in force “for the time being” on 31st December, 1955. For the time being here obviously means as at 31st December, 1955 (see NIPOL Ltd v. Bioku Investment and Property Co Ltd (1992) 3 N.W.L.R (Part 232) 727 as per the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 53 a leading judgment of Akpata JSC at 742–745 in a full dis- course of the meaning of that phrase, and also at 748–750 per Uwais JSC). Section 12 reads:– b “12. The jurisdiction vested in the High Court shall, so far as practice and procedure are concerned, be exercised in the manner provided by this or any other enactment, or by such rules and orders of court as may be made pursuant to this or any other enactment, and in the absence of any such provi- c sions in substantial conformity with the practice and procedure for the time being of the High Court of Justice in England.” Having thus said that, I refer to section 3 of the Law Reform d (Miscellaneous Provisions) Act, 1934 of England which reads inter alia:– “In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there e shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the period between the date when the cause of action arose and the date of judgment, provided that nothing in this section:– f . . . (b) shall apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise; . . .” g In interpreting a rather similar provision to section 12, made in Order 35 Rule 10 of the High Court (Civil Procedure) Rules (Cap 44) of the Western State, the Supreme Court in Enahoro and Co Ltd v. Bank of West Africa Ltd (1971) 1 N.C.L.R. 180 held that where no provision for the award of h interest of the type mentioned in the above-quoted section 3 is made in our local laws or Rules, resort would be had to the position in England as at the relevant time. In such a situation the power to award interest will be exercised here i as would the High Court of Justice in England. The provision of section 3 of the Law Reform (Miscellaneous Provi- sions) Act, 1934 was held applicable in that case. Also in Sabbach v. Bank of West Africa Ltd (1966) 1 All N.L.R. 240 j the Supreme Court in reliance on section 12 of the High [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 54 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Court Law of Lagos as well as the principle of the statutes of a general application that were in force in England on 1st January, 1900, held that the Judgments Act, 1838; applied to Lagos in the absence of any local provision to the contrary. b Section 17 of the Judgments Act, 1838 provides:– “Every judgment debt shall carry interest at the rate of four percent per annum from the time of entering up the judgment until the same shall be satisfied and such interest may be levied under a c writ of execution, on such judgment.” In awarding interest under the Act of 1934 (and similar Acts), the overriding principle is said to be that interest should be awarded to the plaintiff not as compensation for d the damage done but for being kept out of money which ought to have been paid to him. This was expressed by Lord Herschell LC in London Chatham and Dover Railway Co v. South Eastern Railway Co (1893) A.C. 429–437 thus:– e “. . . I think that when money is owing from one party to another and that other is driven to have recourse to legal proceedings in order to recover the amount due to him, the party who is wrongfully withholding the money from the other ought not in justice to benefit by having that money in his possession and enjoying the f use of it, when the money ought to be in the possession of the other party who is entitled to its use. Therefore, if I could see my way to do so, I should certainly be disposed to give the appellants, or anybody in a similar position, interest upon the amount withheld from the time of action brought at all events.” g The Act of 1934 probably reacting to the above observation now provides for interest on any debt or damages from the date between when the cause of action arose and the date of h judgment at a rate the court may think fit (see Thirwell v. Oyewumi (1990) 4 N.W.L.R. (Part 144) 384 at 406 per Akanbi JCA in reference to the period of award of interest under the Law Reform (Miscellaneous Provision) Act, 1934). It has been said that under the Act it is not even nec- i essary for a plaintiff to claim interest in his pleadings before the court can award it in deserving cases (see Riches v. Westminster Bank Ltd (1943) 2 All E.R. 725; Jefford v. Gee (1970) 2 Q.B. 130 at 144). But I think that it is desirable to j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 55 a draw attention in the pleading to the rate of interest desired and where evidence is necessary to adduce it in support. That will help the Judge in the exercise of his discretion to b award what is appropriate. I think in the present case, 13% interest per annum on the debt between 1st November, 1986 when the cause of action accrued and 23rd December, 1987 when judgment was de- c livered is quite reasonable. It was not challenged by the first defendant bank. I believe they refrained from doing so advisedly, they themselves being in the banking industry where the rate of interest is well familiar to them. I think the d learned Judge should have awarded it there being no support in law for the reason he gave for refusing to do so. I accordingly award interest on N825,000 at 13% per annum from 1st November, 1986 to 23rd December, 1987 in favour of e the plaintiff calculated under normal banking practice. Ob- viously the plaintiff are also entitled to interest on the said judgment debt of N825,000 including the accrued interest thereon at 4% per annum from 24th December, 1987 until f final payment of the judgment debt and interest under section 17 of the Judgments Act, 1838.

In the circumstances, I dismiss the appeal of the first de- g fendant bank. I allow the cross-appeal of the plaintiff/ respondent/cross-appellant only in respect of interest. I assess costs in favour of the plaintiff at N3,800 in respect of the appeal and N1,200 in respect of the cross-appeal taking h into account the fact that the cross-appeal only partially succeeded.

AYOOLA JCA: I have had the privilege of reading in advance the leading judgment of my learned brother, Uwaifo i JCA. I agree with him, not without some initial hesitation, that this appeal should be dismissed. I feel no hesitation, however, in agreeing with him that the cross-appeal should only partially succeed for the reasons he had so clearly j stated in his judgment. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 56 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The facts of this case have been carefully set out in the a judgment of Uwaifo JCA. Since in arriving at the same conclusion, I would be traversing a slightly different course, I set out briefly the background facts. b The respondent and one Nimanteks Association Ltd (Ni- manteks) entered into a contract whereby the respondent agreed to be clearing agents of some commodity then await- ing customs clearance at the Apapa Wharf Complex. A term c of the agreement was that the respondent would clear the commodity into warehouses nominated within Lagos by buyers of the 26,000 bales of stockfish, for a fee of N2,100,000 (two million, one hundred thousand naira). The d contract provided, for payment of the fees as follows:– “PAYMENT:– Our vendors, Messrs James Bierne will give instructions to the bankers/trustees of this transaction, the National Bank of Nigeria e Limited, Head Office, Lagos, to disburse the funds as affecting the payment of your services as follows:– (i) Advance payment, amounting to N525,000 (Five Hun- dred and Twenty-five Thousand Naira), representing f 25% of the total commitment to you will be made immediately on receipt of purchase commitment from our buyers, Messrs Marco Construction Company Limited. (ii) The balance of 75% of our total commitment to you g amounting to N1,575,000 (One Million, Five Hundred and Seventy-five Thousand Naira), will by a similar instruction from Messrs James Bierne, be paid to you by the same bankers/trustees, the National Bank of Nigeria Limited, Lagos, immediately after 96 working hours of h the final delivery of the stock. (iii) The total commitment of N2,100.000 (Two Million, One Hundred Thousand Naira) does not include the accruing rent and demurrage after the first two (2) weeks of the i berthing of the consignments. (iv) The National Bank of Nigeria Limited, Head Office or its accredited branch in Lagos, will confirm to you in writing of all the instructions for payment as above- referred to.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 57 a By his letter dated 10th July, 1986, James Bierne, mentioned in the agreement above, authorised the appellant to disburse funds to the respondent in line with the terms of payment b contained in the agreement. By its letter of 4th August, 1986, the appellant wrote to the respondent confirming that the arrangement would be honoured by the bank. Claiming that it had delivered the commodity, the respondent by its c letter of 24th October, 1986 written to the appellant demanded payment of the sum of N1,575,000. This action arose because the bank failed to pay that sum or any part thereof. d It would appear that the basis of the respondent’s claim as contained in paragraphs 13, 14 and 15 of the amended statement of claim is that:– (i) the appellant as “bankers/trustees” had failed, re- e fused and/or neglected to pay the said amount due to the plaintiff, contrary to the said agreement between the plaintiff and the first defendant; and (ii) the appellant’s letter dated 4th August confirming f the agreement between the respondent and the second defendant was a promise to pay to the respondent N1,575,000 four working days after delivering of the goods to the designated warehouse. The g appellant failed to fulfil that promise even though the respondent had fully complied with the said letter. h In the counter-affidavit filed on its behalf the appellant put forward a defence, namely:– (i) that the appellant was not a party to the contract made between the respondent and the second defen- i dant, Nimanteks; (ii) that, although the appellant wrote the letter dated 4th August, 1986, the respondent offered no consideration of any kind for any confirmation therein con- j tained; [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 58 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(iii) that the appellant was not a trustee in respect of the a said transaction in any manner whatsoever; (iv) that a sum of N1,275,000 has already been paid to the respondent; b (v) that upon the refusal of the appellant to deliver the commodity to the buyers (fifth defendant) James Bierne countermanded his earlier instruction and instructed the appellant not to make any further pay- c ments to the respondent. In his judgment the learned Judge held that the appellant was under a duty to carry out the instructions of its customer, James Bierne, contained in the letter dated 10th July, d 1986 which was that the sum of N525,000 be paid immediately and N1,575,000 be paid four working days after the delivery of the goods to a specified warehouse. He found that the respondent had delivered the commodity to the e specified warehouse. As regards the defence that the earlier instructions of James Bierne were countermanded, he held that the alleged defence was lacking in particularity. On this appeal, the main complaint of the appellant is that f the learned Judge failed to consider the good and arguable defences of law raised by the appellant touching on the absence of privity of contract between it and the respondent and of consideration for the promise contained in the appel- g lant’s letter of 4th August, 1986; and good and arguable defences on the facts; namely, that the original instruction to pay the appellant had been withdrawn by James Bierne. The respondent on the other hand argued that the appellant was a h trustee and that the respondent was entitled to enforce the trust. In the alternative, it argued that if the relationship was contracted equity will not allow the appellant to resile from its undertakings. i The learned trial Judge did not decide the case on the basis that there was a contractual relationship. Rather he relied substantially on what he regarded as the appellant’s duty to carry out the instructions of its customer. For my part, as I j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 59 a read the appellant’s letter of 4th August, 1986, such an approach was quite open to the learned Judge. The appellant’s letter of 4th August, 1986 rather than con- b tain a promise was merely confirming its customer’s instructions as envisaged in the document of 7th July, 1986. By the document dated 7th July, 1986 the respondent and Ni- manteks had already agreed as to the source of funds to pay c the respondent fees and the channel of payment when it was indicated that the appellant was to disburse the funds as affecting the payment of the respondent’s services upon James Bierne’s instructions. It is manifest that there were d funds kept with the appellant to be disbursed by the appellant as contained in the document of 7th July, 1986. The appellant’s letter of 4th August, 1986 does in my view neither contained a promise nor spawned a contract. At best it e created an estoppel against the appellant from denying that funds were in its hands to be disbursed upon James Bierne’s instructions as specified in its letter of 4th August, 1986 as bankers/trustees. But the issue of estoppel has not arisen f because the appellant had not denied those facts. In my view, the learned Judge was right in not treating the matter as one of contract and, therefore, in ignoring the defence of absence of consideration and privity which the g appellant had tried to raise. The respondent relied heavily on the trust device to justify their right to sue. On this appeal the appellant argued, albeit h in passing only, that the trust concept does not avail the respondent because, it was submitted, “the bare assertion that the appellant acted as banker/trustee to the transaction cannot avail” the respondent without it being shown in what i manner the appellant became a trustee. In the document of 7th July, 1986 copied to the appellant the appellant was described as banker/trustee of the transaction. There were also the further affidavit (on pages 80–81 j of the record) and exhibit B attached thereto in which the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 60 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. appellant wrote to the Chief Registrar of the High Court of a Lagos that:– “We confirm that a sum of N22,680,000 has already been paid by Marco Construction Ltd to the bank in account of James Bierne b and the same is being held in an escrow Trust Account” (emphasis mine). An escrow account has been defined in Black’s Law Dic- tionary as follows:– c “A bank account generally held in the name of the depositor and an escrow agent which is returnable to depositor or paid to third person on the fulfilment of escrow condition; e.g. funds for payment of real estate taxes are commonly paid into escrow account d of bank-mortgagor by mortgagee.” The trust device rightly described as “the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence” (Maitland “Selected Essays” (1936) e at page 129) has been used in varying circumstances of which the trust of a promise is but one. A reminder of the fertility of the device is the Quistclose Trust which derived its name from the recent case of Barclays Bank Ltd v. Quist- f close Investments Ltd (1970) A.C. 567. In that case A lent money to B for a specific purpose. B kept the money with bank C with whom it had an overdraft. The purpose failed. A and C laid claim to the money. It was held that A could g recover the money under a resulting trust. Lord Wilberforce said at 580:– “That arrangements of this character for the payment of a person’s creditors by a third person give rise to a relationship of a fiduciary character or trust in favour, as a primary trust, of the creditors, and h secondly, if the primary trust fails, if the third person has been recognised in a series of cases over 150 years.” The facts in this case are not exactly the same as in the Quistclose case but the principle is the same and the versatil- i ity of the trust concept which it embodied cannot be ignored. In this case, upon deposit of money into the escrow trust account, the primary trust is in favour of the creditors who are to be paid from that account of whom the respondent is j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 61 a one. I do not feel uncomfortable in applying the trust device in this case. It meets the justice of the case more clearly in every respect. b It is too late in the day for the appellant to deny that it was a trustee of the funds deposited with it in an escrow trust account. As to those parts of that money to be disbursed, the bank held such money in trust for the benefit of those per- c sons to whom disbursement is to be made in fulfilment of condition. From the circumstances, it was clear that there was an irrevocable intention to benefit those third persons out of the fund held in the escrow trust account. The respon- d dent as one of such persons is entitled to enforce the appellant’s duty. The only defence of any apparent significance is that James Bierne has countermanded his earlier instruction to e pay. The learned Judge held the view that the alleged defence was lacking in particularity. I am inclined to agree with him. It is not probable that a bank which had committed itself by way of estoppel that it had funds in its hand and f instructions to disburse such in a particular manner would not obtain a documented countermand or convey such to the respondent as soon as it was made. Besides, if there had been a countermand it was from the counter-affidavit, before g there was full delivery of the commodity by the respondent. In these circumstances, the learned Judge was right in holding in effect that the counter-affidavit has not disclosed a good defence in that regard. h Although I agree that this appeal should be dismissed, my initial hesitation arose from the doubt I entertained about the propriety of adopting the summary judgment procedure in a case in which the question of the relationship of the parties i has been difficult and has engendered wide ranging and divergent consideration. Be that as it may, it is manifest that justice is very much on the side of the respondent and that, whatever the nature of j the relationship of the parties, the appellant has not shown [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 62 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. any reasonable justification for denying it of the money it a was entitled to. I too would dismiss the appeal and for the reasons stated by Uwaifo JCA in the leading judgment, I would allow the cross-appeal in part. I abide by the order as b to costs made by Uwaifo JCA.

PATS-ACHOLONU JCA: I have read in draft the illuminating judgment of my learned brother, S.O. Uwaifo JCA. The c forensic legal analysis he brought to bear on the issues, raised and adroitly canvassed and agitated before the court, exposes the fallacy that is attended in some of the arguments in the brief of the appellant. I agree that the issues that really call for determination are as adumbrated in the leading judg- d ment. The appellant’s main argument is that, as the first defendant was not party to the original agreement, there was no privity of contract and therefore could not possibly be liable. However it ignored the fact that its undertaking to e play ball, i.e., by promising to pay plaintiff/respondent on the successful execution of its contract even if made at the behest of another, necessarily induced the plaintiff/respondent to perform its own side of the contract with f the second defendant. It will indeed be a strange and lop- sided and truncated argument for a party to suddenly seek to back out from a state of affairs he has helped to cause to exist and by which the other party has suffered some detri- g ment on the premise that it was not ab initio a party to such a contract. The observation of Wilde B in Scotson v. Pegg (1861) 152 E.R. 121 at 123 is in syntactic relation to the present case and is to be followed. There he stated as fol- h lows:

“It is said because the plaintiffs in delivering the coals are only performing that which they were already bound to do. But to say that there is no consideration is to say that it is not possible for one i man to have an interest in the performance of a contract made with another. But if a person chooses to promise to pay a sum of money in order to induce another to perform that which he has already contracted with a third person to do, I confess I cannot see why such a promise should not be binding” (see also the Privy Council j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA National Bank of Nigeria Ltd v. Savol West Africa Ltd 63 a decision in New Zealand Shipping Co Ltd v. A.M. Satterthwaite and Co (1975) A.C. 154 at 168). It must be stated here that the purpose of law in any society b claiming to be civilised is to bring order, stability and inter- dependence consciousness in a given society. To that end, the courts through the well-oriented reasoned and seasoned legal activism and social engineering will by their liberal c interpretative powers focus on the egalitarian aspect of the life of the society and make the society become responsive to the norms and demands of some philosophical tenets which guarantee the well-being and orderliness of the com- munity. Therefore, the appellants will simply not be allowed d to opt out of a situation they themselves helped in no small measure to bring to existence. Having induced the plaintiff/ respondent/cross-appellants to perform the contract by agreeing to release the money when so mandated they would e be estopped from denying liability and rest either defence on a porous ground that they were not party to the contract. On the issue of cross-appeal, I subscribe to the view espoused by my learned brother and share the observation that f in the light of section 12 of the High Court Law of Lagos this is a case in which we have to fall back on the provision of English Law, to wit, application of relevant provision as concerning imposition of interest rate thereby following a g practice that is for the time being in force in England. On the whole I hereby dismiss the appeal and allow the cross- appeal partially and I abide by the order and costs made in the leading judgment. h Appeal dismissed. Cross-appeal allowed in part. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

64 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a African Continental Bank Limited v. Alhaji Taofiki Alao b COURT OF APPEAL, LAGOS DIVISION UWAIFO, KALGO, PATS-ACHOLONU JJCA Date of Judgment: 16 MAY 1994 Suit No.: CA/L/160/90

Banking – “Bank draft of exchange”, “Cheque” – Meaning c of Banking – Bank drafts issued by banker in favour of a third party – Whether promissory notes or bills of exchange – When a bank draft will not be regarded as cheque – Whether d payee of bank drafts could compel banker to honour its drafts in furtherance of an act prohibited by statute – Whether Exchange Control Act applies to foreigners Bills of exchange – Exchange Control Act – Application and e operation of – Scope of Contract – Illegal contract – Where it is evident that contract is tainted with illegality – Effect – Whether can be f enforced Words and phrases – “Bank draft”, “Bill of Exchange”, “Cheque” – Meanings of Facts g The plaintiff/respondent claimed that he gave some loans of unspecified CFA Francs to some unnamed Nigerian traders for the payment of their children’s school fees in the United h Kingdom (U.K.) when they met in Cotonou between De- cember, 1980 and January, 1981. The 45 bank drafts which were said to be in repayment of the loan granted were made payable in the U.K. They were issued by the defendant/ appellant bank in Lagos on the application of whom no i evidence was led. They were all dated between December, 1980 and January, 1981. The honouring of the drafts ran into difficulty in London. The plaintiff/respondent wanted them credited into his account in London. The drafts were not, j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

African Continental Bank Ltd v. Alhaji Taofiki Alao 65 a however, in his name and were crossed and indorsed “A/C payee only. Not negotiable”. The defendant/appellant bank in London turned down all efforts by the plaintiff/respondent b to get the proceeds of the bank drafts. The plaintiff instituted this action at the Lagos High Court to seek three declarations and a mandatory order. The trial Judge gave judgment in favour of the plaintiff/respondent and held that the 45 c drafts were valid, properly and regularly negotiated drafts. He ordered the defendant/appellant to direct its London branch to honour the drafts. Dissatisfied with the judgment, the appellant appealed to d the Court of Appeal and contended that the trial Judge erred by holding that the 45 bank drafts were mere promissory notes and therefore not within the provisions of section 3(1) of the Bills of Exchange Act. It also contended that the trial e Judge erred in enforcing an illegal contract despite evidence that the applications made for foreign exchange to the Central Bank of Nigeria in respect of the 45 bank drafts were fraudulently made in the names of non-existent educa- f tional institutions or students in the U.K. It also asserted that the foreign exchange transaction contravened sections 2(2), 3(1) and 7(c) of the Exchange Control Act since the approval of the Minister was not obtained. The respondent argued that the transaction was not illegal because it was for g the Nigerians who borrowed the moneys from the respondent in Benin Republic to obtain any necessary permission required for such external loans under the law in the country. h In determining the appeal, the Court of Appeal considered the provision of sections 3(1), 5 and 73 of the Bills of Ex- change Act, sections 2(2), 3(1) and 7(c) of the Exchange Control Act. i Held – 1. A banker’s draft payable to order on demand addressed by some branch of a bank to another branch or head office of the same bank and not crossed is not a cheque. In j the instant case, however, since the bank drafts were [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

66 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

addressed by one branch of the appellant to another and a they were all crossed, they were bills of exchange and not promissory notes. 2. A cheque means a draft drawn upon a bank and payable, b signed by the maker or drawer, containing an unconditional promise to pay a sum certain in money to the order of the payee. c 3. By virtue of section 3(1) of the Exchange Control Act, except with the permission of the Minister, no person other than an authorised dealer shall in Nigeria and no person resident in Nigeria other than an authorised dealer shall outside Nigeria buy or borrow gold or for- d eign currency from or sell or lend any gold or foreign currency to any person other than an authorised dealer. Similarly, under section 7(c) of the same Act, except with the permission of the Minister no person in Nigeria e shall make any payment whatsoever in respect of any loan, bank overdraft, or other credit facilities outside Ni- geria. In the instant case, granting of the loan in foreign currency by the respondent to some Nigerians in Coto- f nou and the payments made in respect of the loans outside Nigeria by procuring 45 bank drafts encashable in the U.K. without the approval of the Minister contravened the provisions of the Exchange Control Act, there- g fore the appellant could not be compelled to honour the drafts. 4. A bill of exchange is an unconditional order in writing, addressed by one person to another signed by the person h giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or to the bearer. By virtue of section 73 of the i Bills of Exchange Act, a cheque is a bill of exchange. 5. When the object of either the promise or the consideration is to promote the committal of an illegal act, the contract itself is illegal and cannot be enforced. An act j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

African Continental Bank Ltd v. Alhaji Taofiki Alao 67 a directed at repaying an illegal loan is itself illegal because it is a promise to promote obligations arising out of the very act of the illegal loan. A court should not en- b force an illegal contract or allow itself to be made an instrument of enforcing an obligation alleged to arise out of a contract or transaction which is illegal if the illegality is duly brought to the notice of the court. It matters c not whether the defendant pleaded the illegality or not. If the evidence adduced by the plaintiff proved the illegality, the court ought not to assist him. In the instant case, since the respondent entered into an illegal contract, the obligations arising out of the procurement of the d banker’s drafts were equally illegal and unenforceable as the court would not assist in the enforcement of such illegal contract. e 6. A bank draft is a cheque, draft or order for payment of money drawn by an authorised officer of a bank upon either his own bank or some other bank in which funds of his bank are deposited. It is also called a certified f cheque. Appeal allowed.

Cases referred to in the judgment g Nigerian George v. Dominion Flour Mills Ltd (1963) 1 S.C.N.L.R. 242 h Onyiuke v. Okeke (1976) 10 N.S.C.C. 146 Sodipo v. Lemminkainen OY (1985) 2.N.W.L.R. (Part 8) 547 Sodipo v. Lemminkainen OY (No. 2) (1986) 1 N.W.L.R. i (Part 15) 220 Foreign B and B Viennese Fashions v. Losane (1952) 1 All E.R. 909 j Cope v. Rowland (4) (1836) 2 M and W 149 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

68 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

George v. Royal Exchange Assurance Corporation (1900) 2 a Q.B. 214 Gordon v. London City and Midland bankMidland Bank Ltd (1903) A.C. 240 b St. John Shipping Corporation v. J. Bank Ltd (1956) 3 All E.R. 683 Williams Hill (Park Lane) Ltd v. Hotman Hofman (1950) All c E.R. 1013

Nigerian statutes referred to in the judgment Bills of Exchange Act (Cap 21) Laws of the Federation of d Nigeria, 1990, sections 3(1), 5 and 73 Exchange Control (Anti Sabotage) Act (Cap 114) Laws of the Federation of Nigeria, 1990, sections 1(1)(c), 1(1)(d)(iii), 2(2), 3(1) and 7(c) e

Book referred to in the judgment Black’s Law Dictionary (5ed) page 215 f Counsel For the appellant:. Ezeogu For the respondent: Nwadialo (with him Mike-Dipeolu) g Judgment UWAIFO JCA: (Delivering the lead judgment) The main issues in this appeal concern the Bills of Exchange Act and h the Exchange Control Act. They touch upon what to do with a total of 45 bank drafts with proceeds of £212,310 to which the plaintiff, a Beninois living in Port Novo, claims to be entitled to. The said claim is based on some loans of some amount of unspecified CFA Francs which he allegedly gave i to some also unnamed Nigerian traders for the payment of their children’s school fees in the United Kingdom (U.K.) when they met in Cotonou between December, 1980 and January, 1981. The 45 bank drafts which were said to be in j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 69 a repayment were made payable in the U.K. They were issued by the defendant bank in Lagos, on the application of whom no evidence was led. They were all dated between Decem- b ber, 1980 and January, 1981. The honouring of the drafts ran into difficulty in London. The plaintiff wanted them credited into his account in London. The drafts were not however in his name and were crossed and indorsed “A/C payee only. c Not negotiable”. The defendant bank in London turned down all efforts by the plaintiff to get the proceeds of the bank drafts. The plaintiff then took action at the Lagos High Court to d seek three declarations and a mandatory order. On 31st May, 1988, C.O. Segun J granted all four reliefs. The reliefs which the plaintiff claimed against the defendant were stated as follows:– e “1. A declaration that the 45 drafts amounting to £212,310 (Two hundred and twelve thousand, three hundred and ten pounds sterling) drawn by the defendant in Lagos on its London branch office and presented to the said London branch office by the plaintiff through his various bankers f are valid, properly and regularly negotiated drafts. 2. A declaration that the said drafts have not expired and are still negotiable. 3. A declaration that the plaintiff is entitled to have the drafts g honoured by the London branch of the defendant. 4. An order of the court compelling the defendant to direct its London branch to honour the drafts.” h The defendant having complained against the judgment in its appeal to this Court, raised the following four issues for determination in its brief of argument:– “(i) Whether the learned trial Judge in law directed himself i properly by entering judgment for the plaintiff/respondent in respect of a transaction whose illegality is not only transparent on the face of it but also pronounced by statute. (ii) Whether the learned trial Judge in law directed himself properly by holding that the 45 bank drafts tendered in evi- j dence are mere Promissory Notes and therefore not within [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 70 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

the provisions of section 3(1) of Bills of Exchange Act Cap a 21 Laws of the Federation of Nigeria, 1990. (iii) Whether the learned trial Judge erred in law by deviating from and/or not following the Supreme Court of Nigeria b decision in Chief Harold Sodipo v. Lemminkainen (sic) ANR (1986) 1 S.C. 197 by granting judgment to the plaintiff/respondent. (iv) Whether the learned trial Judge erred in law by relying only on the single uncorroborated evidence of the plaintiff with- c out more to come to a decision that the plaintiff has an enforceable right.” I think the issues which really arise from the grounds of appeal are two, namely: (a) whether there was apparent or d proved illegality affecting the plaintiff’s cause of action; (b) whether, apart from illegality, the evidence justified the plaintiff’s claim to the proceeds of the 45 bank drafts. e At the lower court, learned Counsel for the defendant, Chief Ezeogu, referred to some paragraphs of the statement of claim as showing the illegal transaction which brought about the plaintiff’s claim of right to the drafts in question. f He also specifically pleaded illegality in the statement of defence. In regard to the statement of claim, the plaintiff, having pleaded that he did a lot of business with some of his Nigerian friends, averred in paragraphs 4, 5, 7, 8 and 9 as g follows:– “4. Between 1980 and 1981 some of these Nigerians in the ordinary course of business, approached the plaintiff in Be- nin or/and in Europe to enable them [to] settle various schools’ and universities’ bills of their children and depend- h ants in Europe and America thus sparing such children and dependants hardship and inconveniences which late settlement of schools and other bills might entail. 5. The Nigerian friends who approached the plaintiff to ac- i commodate them as stated in the foregoing paragraph did so because of the long delay in their getting the Central Bank of Nigeria’s approval for Foreign Exchange applications to enable them [to] remit funds to their children and dependants abroad. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 71 a 6. The plaintiff granted the requests of his Nigerian friends in this regard and provided funds abroad to them through his country’s local currency, the C.F.A. Francs which is fully and freely convertible in the world currency market being b aligned to French Francs. 7. When the Nigerians eventually obtained the foreign exchange approvals from the Central Bank of Nigeria, the drafts issued by the defendant to the Nigerians in relation to c the school fees and maintenance allowance of their children and other dependants were passed to the plaintiff in settlement and reimbursement of the sums earlier advanced by him. d 8. The plaintiff and the said Nigerians also agreed on how to meet shortfall or surplus as the case might be should there be any shortfall or surplus after the plaintiff would have collected the proceeds of the drafts. 9. The plaintiff received altogether 45 drafts from the Nigeri- e ans pursuant to this arrangement the total value of which was £212,310. The particulars of the drafts are set out in the schedule to this statement of claim.” The plaintiff in his testimony said he had helped seven Nige- f rians the same way previously and that he was able to claim the proceeds of seven bank drafts which they later brought to repay him. I must say that there is of course no evidence whatsoever to support this. But even if there had been such g evidence it would have no bearing on whether the present transaction was illegal. The plaintiff further said:– “After this transaction (meaning of those seven bank drafts), other customers of mine came seeking for my help in the same way. h This was between December 1980/January, 1981. The customers were all from Nigeria and I decided to help them like the first one. I loaned them the money and transferred the money to their children through my bank and they came back with their bank drafts and remittance slips. The drafts were endorsed at the back for me i by them and paid into my account. In all 45 bank drafts were brought down by the defendant in Lagos on its London branch Office.” The drafts were admitted in evidence and marked exhibit A– j A44. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 72 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

From the above quoted evidence taken along with the a paragraphs of the statement of claim already reproduced above, and what has since transpired, it appears that (1) the said unnamed Nigerians negotiated and obtained loans in b foreign currency from the plaintiff; (2) the said loans were to be repaid from the foreign reserve of Nigeria; (3) the loans were negotiated and obtained between December, 1980/January, 1981; (4) the repayment of the loans as per c exhibits A–A44 is what the plaintiff sought to enforce by the action he subsequently brought. I make the following preliminary comments: Not one of those Nigerians was pleaded by name and none testified as to the amount of CFA Francs d he received as loan. He did not produce any document in support of his having sent the money through his bankers to the children of the alleged Nigerians in the U.K.

It will be noted further that the reason given for the said e Nigerians approaching the plaintiff for urgent assistance is the delay in getting the Central Bank of Nigeria to give approval for the remittance of money to their children. In the present case, the loans were said to have been given between f December, 1980 and January, 1981. Yet, an examination of the 45 bank drafts (exhibits A–A44) shows that the earliest one was issued on 10th December, 1980, two others on 15th December, 1980 and 17th December, 1980 respectively, six g on 29th December, 1980, 2 on 30th December, 1980, 28th January, 1981 (most of them early January) and six in the first week of February, 1981. It follows that it was about the same time that the alleged loans were given that the bank h drafts were issued. One may then ask what delay by the Central Bank the said Nigerians were worried about that made them approach the plaintiff?

From all the preliminary comments I made above and as i further noted, the proximity between the time of the alleged loans and the issuance of the bank drafts is relevant for consideration in the present case because the defendant pleaded in sub-paragraph 18(2) of particulars of fraud that all or j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 73 a most of the applications made for foreign exchange to the Central Bank of Nigeria in respect of the 45 bank drafts were fraudulently made in the names of non-existent educa- b tional institutions or students in the United Kingdom. It pleaded certain documents including a letter addressed to the defendant branch in London by the South Coast Interna- tional School of Management Marketing and Sales Ltd, c Bournemouth, on 27th October, 1983 re a certain Babatunde Adio (one of the so-called student beneficiaries of the bank drafts). It reads:– “Your letter dated 24th October, 1983 refers. We regret to have to d advise you that the above named has never been a student at this school and is unknown to us. In addition the letter purportedly from us to the Central Bank of Nigeria is not genuine and the signatory ‘Moris Bruce Foreign Students Adviser’ is not and has never been an official of this school. e We intend very shortly to take this matter up with the Nigeria High Commission in London and we are also advising the local police.” f The letter and three annexures were admitted as exhibits E, E1–E3. The draft involved, exhibit A19, was for £8,800. There was also evidence that most of the schools or institutions where some student beneficiaries were said to attend g were non-existent. This obvious evidence of an attempt to swindle from this country’s foreign exchange reserve escaped the thoughtful- ness of learned Counsel for the plaintiff, Mr Alao Aka h Bashorun. First, he submitted in the court below that the drafts are not bills of exchange but promissory notes and that the defendant is bound to honour them. Second, that the evidence led by the defendant that the schools were non- i existent went to no issue and that being an allegation of crime it must be proved beyond all reasonable doubt. The learned trial Judge held that the drafts were promissory notes. He added: “If exhibits A to A44 are mere promissory j notes made by the defendant/bank to pay the amount stated [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 74 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. therein, then they are bound to pay up”. As regards the a schools, he said:–

“The evidence given by them was that the schools mentioned in the various drafts were non existent. This is an allegation of crime b and proof beyond all reasonable doubt is required to sustain it.”

I have illustratively referred to only two aspects of the submission of learned Counsel for the plaintiff and the reliance c on them by the learned trial Judge to eventually give judgment for the plaintiff. That was how all other untenable submissions of learned Counsel for the plaintiff were accepted. That was how, in particular, the learned Judge d avoided the effect of the decision in Sodipo v. Lem- minkainen OY (No. 2) (1986) 1 N.W.L.R. (Part 15) 220 which was cited to him by learned Counsel for the defendant. He went to rely on the definition of “securities” under e section 2(1) of the Exchange Control Act, 1962, which has no bearing whatsoever on the issue at hand, when what his attention was drawn to was section 3(1) of the Bills of Ex- change Act as to what a bill of exchange is, and then held that the bank drafts were promissory notes. He further said f inter alia:–

“It seems to me from the above provisions of section 2(1) that the Exchange Control Act has removed promissory (sic) notes out of g the application of the Act. It would therefore not apply to the transaction which is the subject matter of this action. There cannot therefore be a contravention of any of the provisions of the Ex- change Control Act, 1962 and the transaction cannot be illegal nor tainted with illegality under the Laws of this country. If it is ille- h gal, this Court would not lend its aid to enforcing it . . . The evidence shows clearly that the plaintiff and the said citizens of this country discussed the transaction in Cotonou, Republic of Benin and came to terms whereby the bank drafts were handed i over to the plaintiff in that country. The offer was, presumably, made without dissimulation, in a quixotic attempt to help business associates in need. The plaintiff in my opinion has an enforceable right against the defendants who issued the drafts to their London branch asking that branch to pay the amount stated therein.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 75 a I cannot pretend to follow the reasoning in the above-quoted passage nor to comprehend how, even if the drafts were promissory notes intended to repay foreign currency loans b which had allegedly been received, the transaction would not be a contravention of the Exchange Control Act in the circumstances of this case. In my view, the learned trial Judge was in error to have held, first, that the bank drafts c were not bills of exchange but promissory notes and, secondly, that there was no illegality in the transactions. In Black’s Law Dictionary (5ed) page 215, “cheque” is defined as: “A draft drawn upon a bank and payable on demand, signed by the maker or drawer, containing an unconditional d promise to pay a sum certain in money to the order of the payee”. At page 132, a bank draft is called a cheque, draft or other order for payment of money, drawn by an authorised officer of a bank upon either his own bank or some other e bank in which funds of his bank are deposited. It is plain that a bank draft is a cheque; it is sometimes called a certified cheque. f By section 73 of the Bills of Exchange Act (as codified) in Cap 113 Volume II Laws of the Federation of Nigeria, 1990, the following definition of a cheque is given:– “73. A cheque is a bill of exchange drawn on a banker payable on demand; and except as otherwise provided in this part, g the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque.” A cheque or bank draft is therefore an aspect of a bill of exchange which itself is defined in section 3(1) as follows:– h “3(1) A bill of exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a i sum certain in money to or to the order of a specified person, or to bearer.” The plaintiff himself treated the drafts in question as cheques. He paid them into his bank account in Cotonou for j clearance in London into his bank account there. That means [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 76 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. he regarded them as a means of payment, bills of exchange. a Section 5 of the Bills of Exchange Act provides:– “5(1) A bill may be drawn payable to, or to the order of, the drawer, or it may be drawn payable to or to the order of b the drawee. (2) Where in a bill the drawer and the drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract; the holder may treat the instrument, at his option, either as a bill of ex- c change or as a promissory note.” Provisions similar to sections 3(1) and 5 of the Bills of Ex- change Act were considered in the rather technical decision of the House of Lords in Gordon v. London City and d Midland Bank Ltd (1903) A.C. 240 where it was held that a banker’s draft payable to order on demand addressed by one branch of a bank to another branch or head office of the same bank and not crossed is not a cheque. Although in the e present case the drafts were addressed by one branch of the defendant bank to another, they were all crossed, unlike those in the Gordon’s case. Lord Lindley observed at 250:– “But I agree with the Court of Appeal in thinking that the bank, f which is both drawer and drawee of these instruments, is not entitled to treat them as bills of exchange as defined in section 3 of the Bills of Exchange Act, although a holder may sue the bank upon them, and treat them either as bills of exchange or as promissory notes: see section 5 sub-section 2.” g It seems to me unrewarding for the plaintiff to have argued and for the learned trial Judge to have accepted the argument that the drafts were not bills of exchange but promissory notes. They were obviously a medium of payment in pounds h sterling – a foreign currency. That was the material issue. It is what brings about the illegality under section 7(c) of the Exchange Control Act. It is without dispute clear that the plaintiff’s action is i founded on the loan transactions he said he entered into with some (unnamed) Nigerians by which he loaned them, according to him, CFA Francs in Cotonou to the value of £212,310 and the promise by those Nigerians to repay him j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 77 a in pounds sterling. The said promise, according to him, was sought to be fulfilled by the procurement of 45 bank drafts issued in the names of various persons and institutions but b the proceeds of which he has been unable to realise. These matters involve foreign exchange control. I must therefore turn to the Exchange Control Act. Section 2(2) provides:– “2(2) The obligations and prohibitions imposed by this Act c shall, unless otherwise prescribed, apply to all persons notwithstanding that they are not in Nigeria and are not Nigerian citizens.” I shall next refer only to sections 3(1) and 7(c) in view of the d facts of this case. Section 3(1) provides:– “3(1) Except with the permission of the minister, no person other than an authorised dealer, shall, in Nigeria, and no person resident in Nigeria other than an authorised dealer, shall, outside Nigeria, buy or borrow gold or foreign cur- e rency from or sell or lend any gold or foreign currency to any person other than an authorised dealer.” Section 7(c) states:– “7. Except with the permission of the minister, no person shall f do any of the following things in Nigeria, that is to say:– . . . (c) make any payment whatsoever in respect of any loan, bank overdraft or other credit facilities outside Nigeria.” g From the facts relied on by the plaintiff, some Nigerians resident in Nigeria took loans of CFA Francs (i.e. borrowed foreign currency) from him in Cotonou. That clearly contravenes section 3(1) of the Exchange Control Act, being with- h out the Minister’s permission, he not being an authorised dealer. Later, those Nigerians made payment in respect of the said loans outside Nigeria by procuring 45 bank drafts encashable in the U.K. This contravenes section 7(c) being i without the Minister’s permission. Both acts are consequently illegal. The first act which contravenes section 3(1) and the second act which contravenes section 7(c), apart from being illegal, are now criminal offences under section j 1(1)(e) and 1(1)(d)(iii) respectively of the Exchange Control [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 78 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(Anti Sabotage) Act, 1984 now in Cap 114 Volume II Laws a of the Federation of Nigeria, 1990 and severely punishable.

The illegality involved in this matter has been the pith and b substance of the defence in the court below and the defendant’s/appellant’s argument in this appeal. I do not think, with due respect, that Mr Nwadialo for the respondent has any reply to that contention. He says in the respondent’s c brief: “It was for the Nigerians who borrowed the moneys from the respondent in Benin Republic to obtain any necessary permission required for such external loans under the law of their country. This was certainly not the concern of d the respondent.” As already shown, the Exchange Control Act applies to both Nigerians and non-Nigerians. Once illegality is committed, a transaction under the Act is not spared simply because the plaintiff who relies on it is not a Nige- e rian, or that the person who normally should ensure that the Minister’s permission was obtained did not do so. The transactions are simply tainted with illegality and no action is available to any of the parties: ex turpi causa non oritur f actio. All through the said brief I have been unable to find, with due respect, any submission of substance worthy of attention. g The law has been well established in this country on the effect of illegality of a transaction. As was held to be the law in Onyiuke v. Okeke (1976) 10 N.S.C.C. 146 at 150, when the object of either the promise or the consideration is to h promote the committal of an illegal act, the contract itself is illegal and cannot be enforced. In my view, an act which is directed at repaying an illegal loan is itself illegal because it is a promise to promote obligations arising out of the very act of the illegal loan. It is as much illegal as the execution i of a deed of charge in respect of gaming debts which by virtue of the Gaming Act, 1835, were deemed to be illegal as in Williams Hill (Park Lane) Ltd v. Hofman (1950) 1 All E.R. 1013. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 79 a In Sodipo v. Lemminkainen OY (1985) 2 N.W.L.R. (Part 8) 547, Aniagolu JSC in his leading judgment inter alia said at 557–558:– b “No court . . . ought to enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal, if the illegality is duly brought to the notice of the court . . . It mattered not whether the defendant pleaded the illegality or not. If the evidence adduced c by the plaintiff proved the illegality, the court ought not to assist him . . . A contract may be against public policy either from the nature of the acts to be performed or from the nature of the consideration. Where the illegality of the contract, although not pleaded, d is disclosed in the evidence it is the duty of the court to take objection . . . The same principle applies in respect of a contract which is made illegal by a statutory order, even though the question of illegality is raised by the party who has been guilty of it, and even though the other party honestly believed, as a result of the state- e ments made to him by the party guilty of the illegality, that no breach of the order was being committed, the reason for this attitude of the law being that the contract sought to be enforced was altogether prohibited.” f These views were largely reiterated in Sodipo v. Lem- minkainen OY (No. 2) (1986) 1 N.W.L.R. (Part 15) 220 where also section 3 of the Exchange Control Act was considered. They are aptly relevant to this case and answer Mr g Nwadialo’s submission that it was the responsibility of the Nigerians who borrowed CFA Francs from the plaintiff to get the necessary permission. I believe it must be clear beyond doubt that the plaintiff, h upon the combined effect of sections 3(1) and 7(e) of the Exchange Control Act, cannot seek the aid of the court to have the reliefs he has sought. The entire transaction from the pleading and evidence of the plaintiff is illegal and the i so-called obligations arising out of the procurement of the bankers’ drafts are equally illegal and unenforceable. I will add that from the nature of the evidence in this case, particularly having regard to exhibits E and E1–E3, it would j appear that the plaintiff in collaboration with others had [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 80 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. contrived to benefit unlawfully from the foreign exchange a reserve of this country. It seems to me that no part of the £212,310 was intended to meet educational fees. I cannot forbear to draw attention to the implication of what had b happened. The plaintiff had resorted to subterfuge to deplete for personal and diabolical ends the foreign reserves of this country. He flouted the law of the land. He is an alien but some Nigerians collaborated with him. This instance might, c must be, is, a tip of the iceberg. In the prevailing world economic order, it is no exaggeration to say that a buoyant foreign reserve is the life blood of our development. It ought not to be allowed to be misused. It appears in this case to d have been attempted to be done with much ease just by presenting fake documents. All that is frightening enough. But what I find extremely worrying is that in the face of the clear illegality and fraud shown, the effort nearly received judicial approval. I think it is necessary to advise that trial e courts should take a firm stand against illegality (and fraud) properly brought to their attention, and proved, for, as said by Bairamian JF in George v. Dominion Flour Mills Ltd (1963) 1 S.C.N.L.R. 242 at 248, “. . . the courts administer f the law of the land and will not help a plaintiff who breaks it”. In the same case at 120, the Federal Supreme Court quoted with approval the observation of Kennedy J in George v. Royal Exchange Assurance Corporation (1900) 2 g Q.B. 214 at 220, part of which reads:– “No court ought to enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract brought to the notice of the court, and if the person h invoking the aid of the court is himself implicated in the illegality.” This admonition cannot be more relevant for strict and un- compromising compliance than in the observance of the i Exchange Control Laws. For this reason and others already given the decision of the learned trial Judge in this case is entirely perverse and cannot be allowed to stand. He unfortunately overlooked patent illegality and fraud. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 81 a I accordingly allow the appeal and set aside the judgment of the lower court together with the order for costs. I would instead dismiss the action. I would in addition order that the b 45 bank drafts be impounded and photostat copies of them immediately brought to the notice of the Minister of Finance and also the Attorney-General of the Federation and Minis- ter of Justice together with this judgment for their necessary c attention. I award the defendant/appellant N2,000 as costs in the court below and N2,500 as costs in this Court against the plaintiff/respondent. KALGO JCA: I have had a preview of the judgment of my d learned brother, Uwaifo JCA, just delivered and I agree with it. The transaction involved in this appeal are no doubt tainted with illegality and cannot therefore under our law be enforced or allowed to stand. The whole arrangement consti- e tuted an infringement and contravention of the Exchange Control (Anti Sabotage) Act, 1984, and this Act applied irrespective of the fact that a non-Nigerian was involved, as the transaction involved the movement of Nigerian currency f from Nigeria to another country without the relevant permission first had and obtained. And since the court cannot overlook any illegality once disclosed in the evidence even if not pleaded, the decision of the learned trial Judge cannot be allowed to stand (see Sodipo v. Lemminkainen OY (1985) 2 g N.W.L.R. (Part 8) 547). I therefore agree that there is merit in this appeal. I allow it and set aside the decision of the learned trial Judge dated h 31st May, 1988. I adopt as mine the orders of costs made in the leading judgment. PATS-ACHOLONU JCA: I have read the leading judgment of my learned brother and I agree with him. I wish however to i state some few points. The appeal in this case touches a very sensitive issue as regards the definitions of a cheque within the provision of the Bills of Exchange Act, and operationalisation of the j Exchange Control Act. The points of contention in reality [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 82 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. are as to the legality or otherwise of the plaintiff’s cause of a action in the light of other attendant factors affecting some dealings in respect of transactions made by the plaintiff/ respondent. In the court below a lot is shrouded in secrecy b and the equivocation and half truths made manifest, made it difficult to discern with some degree of certainty why the plaintiff/appellant appeared to be hedging. It is noted that the gravamen of his case is that having c helped some people with transferring a total sum of £212,310 ostensibly to be used for the maintenance of their children in various schools in Great Britain, and they in return issuing drafts which the defendant refused to honour, d the court ought to compel the defendant to direct its London branch to honour the drafts. In considering this appeal, it is, I think important to restate some averments in the statement of claim:– e “4. Between 1980 and 1981 some of these Nigerians in the ordinary course of business, approached the plaintiff in Be- nin or/and in Europe to enable them [to] settle various schools’ and universities’ bills of their children and dependants in Europe and America thus sparing such children and f dependants hardship and inconveniences which late settlement of schools’ and other bills might entail. 6. The plaintiff granted the requests of his Nigerian friends in this regard and provided funds abroad to them through his g country’s local currency, the CFA Francs which is fully and freely convertible in the world currency market being aligned to French Francs. 8. The plaintiff and the said Nigerians also agreed on how to meet any shortfall or surplus as the case might be, should h there be any such shortfall or surplus after the plaintiff would have collected the proceeds of the drafts.” It is interesting and I dare say instructive that the names of those who the plaintiff helped in the past and those whom he i had now helped are not known as their names were not stated. What was he running away from? Was the transaction whereby the moneys were passed or transferred to Lon- don lawful, having regards to sections 3 and 7 of the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA African Continental Bank Ltd v. Alhaji Taofiki Alao 83 a Exchange Control Act which render the transaction the like of which the plaintiff/appellant seeks to enforce illegal, yet he seeks to enforce those obviously illegal transactions b through these courts – the High Court and the Court of Ap- peal. It is a trite law that a party cannot rely on a transaction besmirched with illegality to enforce a right he claims (see Sodipo v. Lemminkainen (No. 2) (1986) 1 N.W.L.R. (Part c 15) 220). By making an agreement with persons with naked rapacity and greed to thwart the provisions of the law of this country with a view to earning or transferring some money overseas d without doing so through the proper channel, the respondent allowed himself to be lulled into a fool’s paradise.

Neither this Court nor any other court for that matter will e enforce transactions or services that have blemishes on them and which by their very nature the parties involved ought to be prosecuted for playing with the state of our economy in a most sinister form. f In St. John Shipping Corporation v. J. Bank Ltd (1956) 3 All E.R. 683 at 685, Devlin J (as he then was) stated as follows:– g “There are two general principles (relating to illegal contracts). The first is that a contract which is entered into with the object of committing an illegal act is unenforceable. The application of this principle depends on proof of the intent, at the time the contracts h was made to break the law, if the intent is mutual, the contract is not enforceable at all; and if unilateral, it is unenforceable at the suit of the party who is proved to have it.”

A very illuminating case that is apposite to the case under i consideration is an old case of Cope v. Rowland (4) (1836) 2 M and W 149. In that case, the plaintiff brought an action for work and labour done by him as a broker and the plea was that he was not duly licensed to act as a stockbroker j pursuant to the statute. The statute imposed a penalty on any [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 84 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. unlicensed person acting as a broker. Parke B declared the a law as follows:– “It is perfectly settled, that where the contract which the plaintiff seeks to enforce be it express or implied is expressly or by impli- b cation forbidden by the common or statute law, no court will lend its assistance to give it effect. It is equally clear that a contract is void, if prohibited by a statute though the statute inflicts a penalty only, because such a penalty implies a prohibition . . . And it may be safely laid down, notwithstanding some dicta apparently to the c contrary, that if the contract be rendered illegal, it can make no difference in point of law, whether the statute which makes it so has in view the protection of the revenue, or any other object.” See also B. and B. Viennese Fashions v. Losane (1952) 1 All d E.R. 909 at 913. In Beresford v. Royal Insurance Co Ltd, the court dismissed the claim of a personal representative who claimed on policies of life insurance which had matured owing to committing suicide of the assured, in circum- e stances that amounted to a crime. The respondent in this case cannot pretend that the contract which he entered into was not with a view to sidetracking the obvious provisions of the Exchange Control Act. No amount of subtlety can f disguise the nefarious intention implicit in those transactions. In that case this Court will distance itself from the illegal contracts. As he made his bed so he will lie on it. I agree with the judgment of my learned brother, Uwaifo g JCA, and I abide by the order he made therein. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION)

Bank of the North Ltd v. Alhaji Suarau Akorede 85 a Bank of the North Limited v. Alhaji Suarau Akorede b COURT OF APPEAL, IBADAN DIVISION SALAMI, MUKHTAR, NSOFOR JJCA

Date of Judgment: 2 JUNE 1994 Suit No.: CA/I/172/91

Banking – Loan and overdraft – Limitation of action in loan c or overdraft transaction – When time begins to run – How to successfully plead – Effect Banking – Loan and overdraft – Refusal of customer to d repay – Condition precedent to bank instituting an action therefor Facts e The appellant, a banker, sued the respondent, one of its customers, claiming an overdraft advance to the respondent in 1981 as well as the accrued interest thereon. The respondent in his defence contended that he was granted a loan in 1981 and the appellant demanded repayment in 1982, and f that the action was statute-barred. The trial Judge dismissed the appellant’s claim on the ground that it was statute-barred. g The appellant appealed to the Court of Appeal. Held – 1. The action of borrowing and lending money by a cus- h tomer from his bank is a specie of contract. Thus, there is not much distinction between an overdraft and a loan on current account, the only differing feature being when the loan is secured by mortgage and that distinction i arises where the security is to be foreclosed. 2. The statute of limitation does not run, in the absence of special contract or waiver, until after demand for payment as demanded either by the issue of a writ or other- j wise as an essential ingredient in the cause of action. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION)

86 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Appeal dismissed. a

Cases referred to in the judgment b Nigerian Abiodun v. Adehin (1962) 1 All N.L.R. 550 Adegbaiye v. Loyinmi (1986) 5 N.W.L.R. (Part 43) 655 Aforka v. A.C.B. Ltd (1994) 3 N.W.L.R. (Part 331) 217 c Akpene v. Barclays Bank (1977) 1 S.C. 47 Are v. Adisa (1967) N.M.L.R. 304 British India Insurance Co (Nig.) Ltd v. Thawardas (1978) 3 d S.C. 143 Djukpan v. Orovuyebe (1967) N.M.L.R. 287 Kosile v. Folarin (1989) 3 N.W.L.R. (Part 107) 1 e Okparaoke v. Egbuonu (1941) 7 W.A.C.A. 53 Owosho v. Dada (1984) 7 S.C. 149 Shonekan v. Smith (1964) 1 All N.L.R. 168 f Tewogbade v. Akande (1968) N.M.L.R. 404 U.B.N. Ltd v. Ozigi (1991) 2 N.W.L.R. (Part 176) 677

Nigerian statutes referred to in the judgment g Evidence Act (Cap 112) Laws of the Federation of Nigeria, 1990, sections 75 and 149(d) Limitation Law (Cap 64) Laws of Oyo State, 1978, section 4(1)(a) h

Counsel For the appellant: Aluko For the respondent: Sobanjo i

Judgment SALAMI JCA: (Delivering the lead judgment) The plaintiff, a banker, in Suit No. I/633/89 brought an action against the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA Bank of the North Ltd v. Alhaji Suarau Akorede 87 a defendant, one of its customers, claiming the sum of N29,574.89 being an overdraft advanced to the customer in 1981 as well as accrued interest thereon. The current ac- b count number 504403 showed a debit balance of N29,574.89 as at 31st July, 1989. The overdraft made to the defendant was with interest at the rate of 18% per annum in accordance with Central Bank Regulations. The plaintiff pleaded that c the defendant failed to repay the advance in spite of repeated demands. The defendant did not only file a statement of defence but he also counter-claimed. The defendant admitted being a d customer of the bank with a current account but denied that the debt was as a result of an overdraft. Rather, he contended he was granted a loan of N10,000 in September, 1981 at- tracting an interest rate of 10% orally agreed upon by him- e self and the manager of the bank payable in five equal monthly instalments with effect from October, 1981. He pleaded that the plaintiff demanded repayment of the loan at the expiration of the repayment period in 1982. He further f averred that the statement of account contained wrong entries and the whole action is now statute-barred (Limitation Law (Cap 64) of the Laws of Oyo State of Nigeria, 1978). In his counter-claim, the defendant claims that the debit g balance in the statement of account of the defendant does not reflect the actual indebtedness (if any) of the defendant and that the plaintiff is not entitled to charge interest at a rate other than the one agreed upon and an order ascertaining the h true indebtedness of the defendant to the plaintiff if any. The plaintiff denied all the allegations contained in the defence and counter-claim in his own reply to defence and i counter-claim. The plaintiff called one witness in support of its claim while the defence called two witnesses including the defendant in support of defence. Counsel then addressed the j trial court. The learned trial Judge in a reserved and well [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA 88 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. considered judgment made these findings of facts on the a evidence that:– “(1) The amount advanced to the defendant by the plaintiff was an overdraft of N10,000 and not a loan on 15/9/81. b (2) There was no rate of interest expressly agreed upon by the parties other than the prevailing rate at the time of the advance given to the defendant which was 18%. (3) When the defendant failed to pay back the amount, a demand was accordingly made by the plaintiff in 1982 five c months after the overdraft granted became payable. This is based on the fact that plaintiff pleaded in paragraph 6 of the statement of claim that there was a demand and the defendant admitted it that the demand was made in 1982 and the defendant’s evidence was never challenged on the same issue. d (4) Nothing was done by the plaintiff thereafter to recover the debt until this action was instituted in 1989.” Thereafter, the learned trial Judge considered the defence of the defendant relating to limitation law which he thought to e be sufficiently fundamental to have been raised and tried in limine. The learned trial Judge, Oluborode J, then concluded as follows:– “The plaintiff having failed to institute its action, within 6 years f after the demand in 1982, which I found proved as mentioned above makes in my view the case statute barred. In the circumstance I do not consider going into other defences very necessary. Now I pass on to the counter-claim by the defendant asking this g Court inter alia to declare or ascertain true indebtedness of the defendant to the plaintiff and to declare that the plaintiff is not entitled to charge any interest in excess of the rate agreed upon. I should say straight away that in view of my finding above it appears to me that the court cannot revive an action which is already h statute barred by making the relief sought by way of counter- claim. The court cannot ascertain a debt which is legally irrecover- able. It is an exercise in futility. In the circumstance the counter- claim shall and is hereby struck out.” The plaintiff was dissatisfied with the judgment and has i appealed to this Court on three grounds of appeal which are set out immediately hereunder:– “1. The learned trial Judge erred in law by holding that the claim of the plaintiff against the defendant for the sum of j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA Bank of the North Ltd v. Alhaji Suarau Akorede 89 a N29,574.89 that the defendant is owing the plaintiff is statute barred on the ground that no action was instituted to recover the same since 1982 when demand was made as raised in the pleading and evidence of the defendant. b PARTICULARS OF ERROR (i) The findings of fact that was made by the learned trial Judge that the defendant was granted overdraft and not c loan has destroyed the defence of statute of limitation based on the existence of loan repayable within 5 months. (ii) Letter of demand which the defendant alleged was written to him for the repayment of the loan was not d tendered in evidence to establish the period when the cause of action arose. (iii) By virtue of section 131 of the Evidence Act oral evidence of the defendant cannot be relied upon in the e absence of the letter of demand that he alleged was written to him. (iv) There was no evidence on the part of the plaintiff that there was a demand in 1982. f 2. The learned trial Judge erred in law by holding that the claim of the plaintiff against the defendant for the sum of N29,574.89 that the defendant is owing the plaintiff is statute barred without the proper evaluation of the evidence g that was adduced at the trial. PARTICULARS OF ERROR (i) Evidence of the plaintiff that the defendant was not granted any loan and that there was no agreement to h repay the loan within 5 months was never discredited under cross-examination. (ii) The defendant admitted in the course of proceeding that he is owing the plaintiff and the defendant sought a relief in court in respect of the indebtedness of the i defendant to the plaintiff. 3. The learned trial Judge erred in law by striking out the counter-claim in view of his finding on the limitation law when the defendant had given evidence in support of the j counter-claim. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA 90 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

PARTICULARS OF ERROR a (i) The defendant has given evidence in support of the counter-claim that his indebtedness of N10,000 to the plaintiff should attract interest at the rate of 10% in- b stead of 18% being claimed by the plaintiff. (ii) The defence of statute of limitation has been impliedly waived by the defendant.” Parties in compliance with practice and procedure of this c Court filed and exchanged briefs of argument. The plaintiff (hereinafter referred to as appellant) settled appellant’s and appellant’s reply briefs. The defendant (hereinafter referred to as respondent) filed respondent’s brief. In both appellant’s d and respondent’s briefs issues for determination were formulated. In the appellant’s brief the issues identified as calling for determination are:– “(i) Whether in the absence of the letter of demand that the e respondent alleged was written to him there is credible evidence to establish the defence of statute of limitation. (ii) Whether the defence of statute of limitation that is based on the existence of loan repayable within 5 months can still be f sustained in view of the finding of the learned trial Judge that the respondent was granted overdraft and not loan. (iii) Whether the respondent can still rely on the defence of statute of limitation in view of his pleas to the court that the court should declare that he was owing the appellant g N10,000 with the rate of interest of 10%. (iv) Whether it was proper for the learned trial Judge to strike out the counter-claim when evidence was being led in support of the counter-claim and defence of statute of limita- h tion has been waived.” In the respondent’s brief of argument two issues were identified as calling for determination. They are:– i “(i) Whether the learned trial Judge is right in his conclusion that the plaintiff’s claim was statute barred. (ii) Whether the learned trial Judge was wrong in disregarding the counter-claim after he had made a finding that the appellant’s claim was statute barred.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA Bank of the North Ltd v. Alhaji Suarau Akorede 91 a Pausing here, I wish to discuss ground 3 of the grounds of appeal. The ground raises the issue of acknowledgement which was never canvassed at any stage of proceeding in the b court below. This Court is thereby denied the opportunity or benefit of the opinion of the trial Judge since it is not a court of first instance. To raise the issue for the first time in this Court leave of this Court is required. There is nothing before c me indicative of such leave having been sought and obtained. The Supreme Court laid down the principle governing an appeal court’s exercise of its discretion as to whether to grant or refuse leave to argue a new point or points not raised in the court below in the case of Djukpan v. d Orovuyebe and another (1967) N.M.L.R. 287 where Lewis JSC, delivering the judgment of the court, said at 289 and 290 of the report that:– “We agree with Dr. Odje that this Court has a discretion whether e to allow grounds of appeal to be argued which had not been argued in the High Court, but in our view when this is the position the burden is on the appellant to satisfy us that there will be no injustice by allowing them to be argued here on the material before f us. If there are special circumstances and they involve substantial points of law then as the Privy Council did in Abinabina v. Enyi- madu (1) leave may be granted or as in the Commissioner of Lands v. Arah (2) where the new points sought to be raised went to the existence of the action then leave may be granted. The Judicial g committee of the Privy Council in The United Marketing Co v. Kara (3) has in our view helpfully set out the practice which it considers desirable in the following passage from Lord Hodson’s judgment at page 524:– h ‘Their Lordships are of opinion that the appellants should be allowed to take this point at this stage. In the first place, the point could have been met by evidence that if the claim had been made against the company under a subsisting policy the company would not rely on the breach of the condi- i tion or possibly by some other evidence. Their Lordships would not depart from their practice of refusing to allow a point not taken before to be argued unless satisfied that the evidence upon which they are asked to decide established beyond doubt that the facts, if fully investigated, would j have supported the new plea: Connecticut Fire Insurance [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA 92 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Co v. Kavanagh (1982) A.C. 473, 480; and Arcrambault v. a Archambault (1902) A.C. 575. Even if the facts were beyond dispute and no further investigation of facts were required, their Lordships would not b readily allow a fresh point of law to be argued without the benefit of the judgment of the Judges in the court below. In this case the appellants have relied in support of their submission that there was a breach of conditions on two South African cases, Lewis Ltd v. Norwich Union Fire Insurance c Co Ltd (1916) S.A.L.R. App. 509 and Sacks v. Western As- surance Co (1907) Tr. H.C. 257 which on similar facts support their mission, but their Lordships are not prepared to say that the point is too plain for argument to be required upon it. The argument and the judgment in these two cases d indicate that at any rate in the United States of America there are conflicting decisions on this topic and no direct authority in this country was available so far as the re- searches of the appellants were able to show. Accordingly, e their Lordships would not, even if the question were a bare question of law, entertain the submission that the respondent’s claim is to be defeated by reason of his breach of a condition of his contract of insurance with the Jubilee Co, and they would follow the guidance given by Lord Birken- f head L.C. in North Staffordshire Railway Co v. Edge (1920) A.C. 254, 263 when he said:– “The efficiency and the authority of a Court of Appeal and especially a final Court of Appeal are increased and g strengthened by the opinions of learned Judges who have considered these matters below. To acquiesce in such an attempt as the appellants have made in this case is in effect to undertake decisions which may be of the highest importance without having received any assistance at all h from the Judges in the courts below.” The Lord Chancellor went on to say that there might be very exceptional cases where new matters might be considered but their Lordships do not regard this case as requiring i such exceptional treatment. Moreover, there may, for instance, be cases where subsequent decisions of this Court are contrary to what was decided in the High Court so that they were not known at the time in that court or there may be special circumstances j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA Bank of the North Ltd v. Alhaji Suarau Akorede 93 a where the lower court is bound by a decision, when the higher Court is not, which would warrant leave being granted though – even then in the latter instance it is desirable for the point to be taken at the earliest opportunity even b if it has in fact then only to be reserved for argument in a later appellate court.’” See also Shonekan v. Smith (1964) 1 All N.L.R. 168; Akpene v. Barclays Bank (1977) 1 S.C. 47; Adegbaiye v. Loyinmi c (1986) 5 N.W.L.R. (Part 43) 655 and Kosile v. Folarin (1989) 4 S.C.NJ 198; (1989) 3 N.W.L.R. (Part 107) 1. The learned Counsel has not made any effort to explain why the discretion of this Court should be exercised in fa- d vour of his client. Since appellant has failed to proffer any explanation the discretion of this Court would not be exercised in its favour. Ground three of the grounds of appeal is incompetent and for that reason it is struck out. The issue e identified therefrom as well as arguments canvassed in that behalf in all the briefs are hereby expunged. Be these instances as they may, I cannot fathom the grudge of the appellant in respect of striking out of the respondent’s f counter-claim which stricto sensu is not a separate or independent action. The counter-claim is pegged on the appellant’s claim and fizzled with the acceptance of the appellant’s version that the facilities or advance given to the g respondent was an overdraft and not a loan and the interest rate is 18% and not 10% as alleged by the respondent. Pray what is left of the respondent’s counter-claim to be considered with its life and soul taken away. Nothing. It is seri- h ously anaemic. It is all gimmick. The respondent, if he ever had a cause of action, disappeared with the findings of the learned trial Judge which are set out earlier in this judgment. In the circumstance, the only issue calling for determina- i tion in this appeal is as framed in the respondent’s issue (i), which is related to the remaining two grounds of appeal in the respondent’s brief. The appellant failed to relate its formulation to any of the grounds of appeal. At the hearing of j the appeal, learned Counsel for the appellant adopted and [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA 94 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. relied upon both the appellant’s and the respondent’s reply a briefs, the respondent also adopted and relied on appellant’s brief. The appellant contended that the letter of demand that the b respondent alleged was written to him ought to have been tendered in evidence to establish the period when demand was made and the period that he was given to liquidate the overdraft in order to establish the period within which the c cause of action arose for the defence of the statute of limitation. Counsel submits that the defence of the statute of limitation has been abandoned since there is no credible evidence to establish the period when the demand for the d payment of the debt was actually made and the period the respondent was given in the letter of demand to liquidate the overdraft. Counsel quoted in support of his submission the case of Federal Capital Development Authority v. Alhaji e Musa Naibi (1990) 3 N.W.L.R. (Part 138) 270 at 282. Learned Counsel for the respondent contended that, whether the claim of the appellant was based on overdraft or loan, the same is time barred. The respondent relied on sec- f tion 4(1)(a) of the Limitation Law of Oyo State Cap 64 Volume 3, Halsbury’s Laws of England (3ed) Volume 24, paragraph 396; Wema Bank Ltd v. Okutoro (1980) High Court of Lagos State 219 at 223–224; National Bank of g Nigeria Ltd v. Makun 1963 W.N.L.R. 49 at 51–52 and National Bank of Nigeria Ltd v. Adewale Thompson (1962) 2 All N.L.R. 36 at 38–39, 42. He then refers to paragraph 6 of the statement of claim and paragraphs 6, 7 and 9 of the h statement of defence. The appellant averred in paragraph 6 of its statement of claim as follows:– “6. The plaintiff has demanded from the defendant for the payment of his debt but the defendant has been promising to i pay without paying. The plaintiff will rely on its letters of demand to the defendant” (italics mine). The respondent reacted to the appellant’s averment set out above in paragraphs 6 and 7 of the statement of defence and j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA Bank of the North Ltd v. Alhaji Suarau Akorede 95 a counter-claim by admitting part of it and denying the rest. He averred as follows:– “6. The defendant admits paragraph 6 of the statement of claim b only to the extent that the plaintiff demanded repayment of the loan at the expiration of repayment period in 1982. 7. The defendant denies making any promise and will contend that any letter of demand after 1982 are after thought and cannot be used in this case” (italics mine). c In the circumstance, it is an elementary principle of our law which no longer requires citing of authorities in civil cases, that what is admitted requires no further proof. See section 75 of the Evidence Act (Cap 112) Laws of the Federation of d Nigeria, 1990 and T.L. Owosho v. H.A. Dada (1984) 7 S.C. 149 at 163–164 where Aniagolu JSC said:– “But a plaintiff need not proceed to prove an admitted fact. And a fact is deemed to be admitted if it is neither specifically denied nor e admitted by implication, having regard to the other facts averred in the pleadings.” See also the case of The British India Insurance Co Nigeria Ltd v. Thawardas (1978) 3 S.C. 143 at 149 where the Su- f preme Court discussed and appraised the case of Chief Ok- paraoke v. Obidike Egbuonu (1941) 7 W.A.C.A. 53 at 55. The appellant filed a reply to a statement of defence as well as defence to the counter-claim but failed or neglected g to deny the two paragraphs, particularly paragraph 6. The averment of the respondent to the effect that he was served notice in 1982 soon after the expiration of the agreed repayment period of five months is taken as established. h The respondent, whom I presume to be illiterate, without so deciding, because he testified in Yoruba and went further to say that he discussed a loan with the appellant who approved N10,000 for him at the rate of 10% payable in five i monthly instalments with effect from October, 1981. He took advantage of the transaction by drawing the loan and since then had not operated the account, a fact which is confirmed by exhibits A and B. He testified further that soon j after the expiration of the five months he received a letter [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA 96 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. from the appellant in 1982. The substance of his evidence a was neither challenged nor controverted and was accepted rightly, in my view, by the learned trial Judge who, however, found that what the appellant referred to as a loan was b in fact an overdraft and the rate of interest was at the prevailing rate of 18% and not 10% as alleged by the respondent. In civil cases, which the instant appeal is, the burden of c proof is never static; it shifts as the case develops; it shifts on the party who will lose if no evidence is adduced (see Abiodun and others v. Adehin (1962) 1 All N.L.R. 550; Tewogbade and Co v. Arasi Akande and Co (1968) d N.M.L.R. 440 and Are v. Adisa (1967) N.M.L.R. 304). The respondent having shown that he received a notice in 1982, it is incumbent on the appellant who pleaded in paragraph 6 of its statement of claim that it would rely on its letters of e demand to take steps, if he has any letter to the contrary, to challenge or confront the respondent with it or them. But it failed to do so. Its failure to do so is fatal to its case. It follows that if it had done so it would have been against it. See f section 149(d) of the Evidence Act Cap 112 which provides as follows:– “149. The court may presume the existence of any fact which it thinks likely to have happened, regard being had to com- g mon course of natural events, human conduct and public and private business in their relation to the facts of the particular case, and in particular the court may presume:– (a) . . . h (b) . . . (c) . . . (d) that evidence which could be and is not produced i would, if produced, be unfavourable to the person who withholds it; (e) . . .”. With this, it appears respondent’s case is cut high and dry. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA Bank of the North Ltd v. Alhaji Suarau Akorede 97 a Now, having resolved the issue of facts, I turn to the provisions of section 4(1)(a) of Cap 64 of the Laws of Oyo State, 1978, which provides as follows:– b “4(1) The following actions shall not be brought after the expiration of six years from the date on which the course of action accrued, that is to say:– (a) Actions founded on simple contract or on tort.” c The present action is founded on simple action of borrowing and lending money by a customer from his bank which, to my mind, is a specie of contract. I am not unaware of the heavy weather the learned Counsel for the appellant has d made about a possible distinction between an overdraft and a loan. I am not aware of any authority and, if there were, he was unable to draw a line by adducing evidence amply dem- onstrating that the incidence of an overdraft and a loan vis-à- e vis the provisions of section 4(1) of Limitation Law (Cap 64) is different. There is not much distinction between an overdraft and a loan on current account, the only differing feature is when the loan is secured by mortgage and that distinction arises where the security is to be foreclosed (see f generally the case of Aforka v. African Continental Bank Ltd (1994) 3 N.W.L.R. (Part 331) 217 and Union Bank of Nige- ria Ltd v. Professor Albert Ojo Ozigi (1991) 2 N.W.L.R. (Part 176) 677). g I think that it is just a case of that which is called a rose will still smell sweet by another name. In either case, a notice of demand must be served on the borrower. I refer to the following passage based on the decision in Joachimson v. h Swiss Bank Corporation (1921) 3 K.B. 110 in Halsbury’s Laws of England (3ed) Volume 24, paragraph 396:– “In the case of money on current account, the statute does not run, in the absence of special contract or waiver, until after demand for i payment, as a demand, either by the issue of a writ or otherwise, is an essential ingredient in the cause of action against the banker for money lent.” And in Lloyds Bank Ltd v. Margolis and others (1954) 1 All j E.R. 734, Upjohn J has this to say at 738, about dealings in [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION) Salami JCA 98 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. an overdraft current account where the bank took a legal a charge secured on a farm owned by the customer:– “As between a customer and a banker who are dealing on a current account it seems to me impossible to assume that the bank were to b be entitled to sue on the deed on the very day after it was executed without making a demand and giving the customer a reasonable time to pay.” See also the observation of Lord Chancellor in Rouse v. c Bradford Banking Co (1894) A.C. 586:– “I would be inclined to take the view that it would be unreasonable for a bank, after having granted an overdraft to immediately proceed to sue for it, without making a demand, and giving the cus- d tomer a reasonable time to pay. I can hardly think that it would be in the contemplation of a customer to whom an overdraft was given that, the bank would without warning issue a writ. If the bank are at liberty to act that way commerce and industry would be greatly handicapped.” e On the facts accepted by the learned trial Judge and authorities cited there had been a breach since 1982 when a demand for repayment of the loan was made. The appellant’s action to recover the same was not brought until August, 1989, a f period of about seven years and six months, the appellant’s claim I agree is caught by the six-year provision of the Limi- tation Law (Cap 64) allowing for a reasonable period of more than one year to repay has indebtedness from time of g demand. The answer to the only issue calling for determination is positive. Grounds 1 and 2 of the grounds of appeal fail and are dismissed by me. The appeal equally fails and it is dis- h missed. The respondent is entitled to costs of this appeal which is assessed at N750. In parenthesis, the appellant, assuming its action is not met and defeated by the Limitation Law (Cap 64) would still i have met a dismal failure as it failed to show that there had been a breach. It did not lead evidence of its own demand for repayment nor evidence of the period in the letter of demand to liquidate the demand. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, IBADAN DIVISION)

Bank of the North Ltd v. Alhaji Suarau Akorede 99 a MUKHTAR JCA: I have read in advance the lead judgment just delivered by my learned brother, Salami JCA, and I am in complete agreement with him that the appeal lacks merit b and should be dismissed with N750 costs in favour of the respondent. NSOFOR JCA: I agree. Appeal dismissed. c [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

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a N.A.B. Kotoye v. Mrs F.M. Saraki and another

SUPREME COURT OF NIGERIA b KUTUGI, ADIO, OGUNDARE, ONU, WALI, JJSC Date of Judgment: 29 JULY 1994 Suit No.: SC.147/1993

Banking – Banks and Other Financial Institutions Decree No. 25 of 1991 – Section 11 thereof – Scope of – Action that c cannot be brought in court – Interpretation of – Whether retrospective Banking – Holder of shares in a bank – Statute prohibiting d legal action challenging the ownership of shares registered in favour of shareholder of a bank – Whether such statute ousts the jurisdiction of the court from hearing suits asserting that shares in a bank are held in trust – Section 11 of the Banks and Other Financial Institutions Decree No. 25 of e 1991 Company law – Registered shareholder – Scope of rights and privileges of f Company law – Trustees of shares in a company – Scope of power, rights and privileges of -

Interpretation of statutes – Banks and Other Financial Insti- g tutions Decree No. 25 of 1991 – Section 11 thereof – How construed – Whether has retrospective effect Facts h In the consolidated Suits Nos. LD/845/87 and LD/938/87, the plaintiffs/respondents together and the second plaintiff alone respectively claimed against the defendant/appellant as follows:– i “LD/845/87:– (1) A declaration that the 2,400,000 shares and the Bonus Scripts and other shares attached thereto standing in the name of the defendant in the Register of shareholders of Societe Generale Bank (Nigeria) Limited is held by him in j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

N.A.B. Kotoye v. Mrs F.M. Saraki and another 101 a trust for the plaintiffs (or alternatively) for the second plaintiff. (2) An order directing an Inquiry into the amount of any divi- b dends which may have been received by the defendants as holder of the aforementioned shares up to the date of the judgment herein. (3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as c trustees for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. (4) An order for rectification of the Register of shares to give effect to any judgment delivered herein.” d “LD/938/87:– 1. A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of shareholders of Societe Generale Bank (Nigeria) Limited is held by him in e trust for the plaintiff. 2. An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to date of the judg- f ment, herein. 3. An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. g 4. An order for rectification of the Register of Shares to give effect to any judgment delivered herein. 5. An order for the refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plain- h tiff’s behalf. “LD/845/87:– (1) Whereupon the defendant by way of counter claim claims i against the second plaintiff the sum of N730,000 being money advanced to the second plaintiff or to his order at his request. (2) The defendant also claims interest thereon at the rate of 15% per annum from the 15th day of May, 1986 until pay- j ment.” [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

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“LD/938/87:– a (1) A declaration that of the 6,876,840 shares standing in the name of the plaintiff in the Register of Members of Societe Generale Bank Nigeria Limited 2,783,483 thereof are not b held by the plaintiff beneficially but upon trust for the plaintiff and the defendant for disposal as they shall both agree to deserving Nigerians of their choice. (2) An injunction restraining the plaintiff from dealing with the said shares as if he were sole beneficial owner.” c During the hearing of the consolidated suits, the Federal military Government promulgated the Banks and Other Financial Institutions Decree No. 25 of 1991 concerning the subject matter of the suits. Thereafter, the defendant/ d appellant, relying on section 11 of the Decree, filed an application praying the High Court to strike out the consolidated suits as the court lacked jurisdiction to continue to hear same. However, the High Court ruled that section 11 of e the Decree did not deprive it of jurisdiction to hear the suit. The appeal of the defendant/appellant to the Court of Appeal was also dismissed. Thereafter, the appellant appealed to the Supreme Court contending that the provision of section 11 f of the Decree which provided that no suit shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the said shares vests in any person other than the registered shareholder ousted g the jurisdiction of the court to hear the suit. The Supreme Court Dismissed the appeal. Held – 1. That since the plaintiff/respondents did not claim that h title in the shares vests in them or in any person other than the defendant/appellant registered as shareholder, section 11 of Decree No. 25 of 1991 did not oust the jurisdiction of the court from hearing the suit. i 2. Even if the defendant/appellant was successfully pronounced to be a trustee of any of the shares thereof, he would still remain the registered legal owner of the shares while the plaintiffs/respondents would become j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

N.A.B. Kotoye v. Mrs F.M. Saraki and another 103 a the beneficial owners only and this would not contravene the provisions of section 11 of Decree No. 25 of 1991. 3. A registered holder of shares in a company becomes b entitled to certain rights, benefits and privileges. Except as otherwise provided by the law and the provisions of the Memorandum and Articles of Association of the company, he has the right to sell, mortgage or otherwise c dispose of the shares. He is entitled to receive dividends on the shares registered in his name and to keep the dividends so received for his own use. In other words, the essence of being registered as an owner or a holder of d shares in a company is that one is, inter alia, entitled to enjoy in one’s right the foregoing rights, benefits and privileges. 4. A trustee of shares in a company in whose name the e shares are registered is still regarded the registered legal owner of the shares while the beneficial owners are the beneficiaries. This is because a trust relationship is generally equitable in its nature. It is of no consequence that f the trustee, though the registered holder, is a mere notional or nominal owner of the shares while the beneficiaries are the beneficial owners. g 5. The opening clause in section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991 which states: “Notwithstanding, anything contained in any law or in any contract or instrument” ought to be restricted to a provision in any law or contract or instrument which h allows a litigant to maintain a suit against a registered holder of shares in a bank on the ground that the title in such shares vests in any other person other than the registered holder. The clause cannot be read to cover cases i of trusts, particularly in the instant case, where the suit is not being maintained because there is a trust but because of lack of it or because of any law or contract or instrument which gives the plaintiffs a right to maintain the j action. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

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6. It is not the rectification of the name of a registered a holder of shares in a bank that is forbidden by section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991 but it could even be the number of shares or b any other error as may he revealed during the trial. But once the registered holder is declared a trustee of any of the shares for a beneficiary, the question of rectifying the register of shareholders to reflect the name of the benefi- c ciary would no more arise because the registered holder cannot be a trustee unless he holds the shares in his name to enable him to exercise control over them. 7. It is a well-established principle of interpretation of d statutes that, where the provision of any law ousts the jurisdiction of the court on a matter, such a provision must be narrowly and strictly construed, unless it clearly and unambiguously states so. The wording of section 11 of e the Banks and Other Financial Institutions Decree No. 25 of 1991 has no retrospective effect, nor does it affect the issue of the relationship of a trustor and a trustee and the beneficial interest accruing of the former from shares f in a bank held and registered in the name of the latter for the benefit of the former. Thus, legislation shall not be made to apply retrospectively to affect the acquired right before it or to affect litigations pending in court, unless g such intention is manifestly and unambiguously made clear in it. To hold otherwise is to import into the statute something that was not intended or contemplated by the legislature. h Appeal dismissed.

Cases referred to in the judgment

Nigerian i A-G of Bendel State v. A-G of the Federation (1981) 10 S.C. 1 Abioye v. Yakubu (1991) 5 N.W.L.R. (Part 190) 130 Adegoke v. Adibi (1992) 5 N.W.L.R. (Part 242) 410 j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

N.A.B. Kotoye v. Mrs F.M. Saraki and another 105 a Adeyemi v. Opeyori (1976) 9–10 S.C. 31 Afolabi v. Governor of Oyo State (1985) 2 N.W.L.R. (Part 9) 734 b Ahmed v. Kassim (1958) S.C.N.L.R. 28; (1958) N.S.C.C. 11, 12 Aya v. Henshaw (1972) 5 S.C. 87 c Balogun v. Amubikahun (1989) 3 N.W.L.R. (Part 107) 18 Barclays Bank v. C.B.N. (1976) 1 All N.L.R. 409 Bello v. Diocesan Synod of Lagos (1973) ECSLR Vol. 3 (Part 1) 330 d Din v. A-G Federation (1988) 4 N.W.L.R. (Part 87) 147 Egbe v. Onogun (1972) 1 All N.L.R. (Part 1) 95 Ezewani v. Onwordi (1986) 4 N.W.L.R. (Part 33) 27 e Kotoye v. C.B.N. (1989) 1 N.W.L.R. (Part 98 ) 419 Lamai v. Orbih (1980) 5–7 S.C. 28 Lawal v. G.B. Ollivant (1972) 3 S.C. 124 f Lokoyi v. Olojo (1983) 2 S.C.N.L.R. 127 N.P.A. v. Panalpina (1974) 1 N.M.L.R. 82 Nabhan v. Nabhan (1967) All N.L.R. (Reprint) 51 g Nwosu v. Imo State Environmental Sanitation Authority (1990) 2 N.W.L.R. (Part 135) 688 Obeya Memorial Hospital v. A-G Federation (1987) 3 N.W.L.R. (Part 60) 325 h Ojukwu v. Gov. of Lagos State (1986) 3 N.W.L.R. (Part 26) 39 Olatunbosun v. NISER Council (1988) 1 N.W.L.R. (Part 80) 25 i Oloba v. Akereja (1988) 3 N.W.L.R. (Part 84) 508 Oloriode v. Oyebi (1984) 1 S.C.N.L.R. 390; (1984) 5 S.C. 1 Osadebay v. A-G, Bendel State (1991) 1 N.W.L.R. (Part j 169) 525 [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

106 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Otapo v. Sunmonu (1987) 2 N.W.L.R. (Part 58) 587 a Owoniboys Technical Services Ltd v. John Holt Ltd (1991) 6 N.W.L.R. (Part 199) 550 Peenok Investment Ltd v. Hotel Presidential Ltd (1982) 12 b S.C. 1 Tukur v. Gov. of Gongola State (1989) 4 N.W.L.R. (Part 117) 517 c Udoh v. Orthopaedic Hospital Management Board (1993) 7 N.W.L.R. (Part 304) 139

Foreign d A-G v. Boden (1912) 1 K.B. 539 Abel v. Gee (1871) LR 6 C.P. 365 Anisminic Ltd v. Foreign Compensation Commission (1969) 2 A.C. 147 e Asante v. Taawia (1949) 65 TLR 105 Cartledge v. E. Jopling and Sons Ltd (1963) A.C. 758 Colonial Sugar Refining Co v. Irving (1905) A.C. 369 f Commissioners of Customs and Excise v. Cure and Deeley, Ltd (1962) 1 Q.B. 340 Coxhead v. Mullis (1878) 3 CPD 439 g Dove v. Dove (1963) P. 321 Fullalore v. Parker 31 L.J. C.P. 239 Heyting v. Dupont (1961) 1 W.L.R. 1192 h Hickson v. Darlow (1883) 23 Ch.D. 690 In re Jones 9 LR Eq. 63 Irving v. National Provincial Bank Ltd (1962) 2 Q.B. 73 Jennings v. Kelly (1939) 4 All E.R. 464 i Moon v. Durden 2 Exh. 22 Re Athlumney (1898) 2 Q.B. 547 Re Bradon’s Patent (1884) 9 A.C. 589 j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

N.A.B. Kotoye v. Mrs F.M. Saraki and another 107 a Sheldon v. Bromfield Justice (1964) 2 Q.B. 573 Shop and Store Developments Ltd v. I.R.C. Smallwood v. Gallardo 275 U.S. 56, 48 S.C. 1 23 b Smith v. East Elloe R.D.C. (1956) A.C. 736 Sussex Peerage Case 1843 1860 All E.R. 54 Sutters v. Briggs (1922) 1 A.C. 1 c Vandevell’s Trust (No. 2) (1974) Ch. 269 Western Derby Union v. Metropolitan Life Assurance Soci- ety (1897) A.C. 647 d Williams v. Williams (1971) All E.R 764 Wong v. Beaumont Property Trust Ltd (1965) 1 Q.B. 173 Young and Co v. Mayor, etc of Leamington (1882) 8 Q.B.D. 579; (1883) 8 App. Cas. 517 e Nigerian statutes referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, section 11 f Constitution of the Federal Republic of Nigeria (Promulga- tion) Decree No. 12 of 1989, section 3(2) Constitution of the Federal Republic of Nigeria, 1979, section 33(1) g Decree No. 48 of 1977, section 2(1) Decree No. 47 of 1979, section 5(1) NISER Act No. 70 of 1977, Schedule 2, section 4 h Books referred to in the judgment Bennion, Francis Statutory Interpretation (2ed) section 164 Black’s Law Dictionary (5ed) i Halsbury’s Laws of England (3ed) Volume 9, page 353 Halsbury’s Laws of England (4ed) Volume 4, paragraph 922 Halsbury’s Laws of England (4ed) Volume 4, paragraph 906 j page 557 [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

108 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Maxwell on Interpretation of Statutes (12ed) page 29 et seq. a 251–252 Shorter Oxford English Dictionary b Snell’s Principles of Equity (27ed) pages 87–88 Stroud’s Judicial Dictionary

Counsel c For the appellant: Ajayi (with him Ayanlaja, Kuyatsemi (Miss), Okosun and Osunde (Miss)) For the respondents: Williams (with him Williams, Igwe, Jagun and Cole (Miss)) d

Judgment KUTIGI JSC: (Delivering the lead judgment) In the consolidated Suits Nos. LD/845/87 and LD/938/87, the plaintiffs/ e respondents together and the second plaintiff alone respectively claimed against the defendant/appellant as follows:– “LD/845/87:– (1) A declaration that the 2,400,000 shares and the Bonus f Scripts and other shares attached thereto standing in the name of the defendant in the Register of shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the second plaintiff. g (2) An order directing an Inquiry into the amount of any dividends which may have been received by the defendants as holder of the aforementioned shares up to the date of the judgment herein. h (3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustees for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. i (4) An order for rectification of the Register of shares to give effect to any judgment delivered herein.” “LD/938/87:– 1. A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of shareholders of j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 109 a Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiff. 2. An order directing an inquiry into the amount of any divi- b dends which may have been received by the defendant as holder of the aforementioned shares up to date of the judgment, herein. 3. An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as c trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. 4. An order for rectification of the Register of shares to give effect to any judgment delivered herein. d 5. An order for the refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plaintiff’s behalf.” The defendant counter-claimed against the plaintiffs in the e consolidated suits thus:– “LD/845/87:– (1) Whereupon the defendant by way of Counter claim claims against the second plaintiff the sum of N730,000 being money advanced to the second plaintiff or to his order at his f request. (2) The defendant also claims interest thereon at the rate of 15% per annum from the 15th day of May, 1986 until payment.” g “LD/938/87:– (1) A declaration that of the 6,876,840 shares standing in the name of the plaintiff in the Register of Members of Societe Generale Bank Nigeria Limited 2,783,483 thereof are not held by the plaintiff beneficially but upon trust for the plain- h tiff and the defendant for disposal as they shall both agree to deserving Nigerians of their choice. (2) An injunction restraining the plaintiff from dealing with the said shares as if he were sole beneficial owner.” i The hearing of the consolidated suits was still in progress when the defendant filed a motion on notice to strike out the suits on the ground that the court had no jurisdiction to continue to entertain same and or allow the proceedings to be j maintained. The motion was supported by a four-paragraph [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC 110 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. affidavit sworn to by one Oluwole Koya, a legal practitioner a in the Chambers of Ayanlaja, Adesanya and Co who are Counsel with Chief G.O.K. Ajayi, S.A.N., for the defendant/ applicant. Paragraphs 2 and 3 of the affidavit merely recited b plaintiffs’ claims in Suits Nos. LD/845/87 and LD/938/87 reproduced above. The remaining paragraph 4 which I consider vital to the motion reads:– “4. That it is common ground both in the pleadings filed and c the evidence adduced so far before this Honourable Court by both parties to the proceedings in the two consolidated cases aforesaid that the shares in dispute are registered in the name of the defendant in the books of Societe Generale Bank (Nigeria) Limited as holder thereof.” d The motion was filed pursuant to the promulgation of Banks and Other Financial Institutions Decree No. 25 of 1991. The commencement date was 20th June, 1991. Section 11 of the said Decree reads:– e “11. Notwithstanding anything contained in any law or in any contract or instrument, no suit or other proceeding shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the said f shares vests in any person other than the registered holder. Provided that nothing in this section shall bar a suit or other proceedings on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on behalf of the minor or person suffering g from the mental illness” (Italics are mine for emphasis only). In a considered ruling delivered on 27th November, 1992 the learned trial Judge dismissed the motion or application. h At page 54 of the record he said:– “It is not in dispute as far as the claims go that the titles to the shares held by the defendant in S.G.B.N. vest in him. I do not find that section 11 bars this suit or other proceeding based on the i claims in the first four paragraphs of the consolidated suits from being maintained against the defendant. The question of whether or not there is a trust concerning the shares held in the name of the defendant in S.G.B.N. is far from being determined and cannot be until the whole evidence is taken. The learned defence Counsel j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 111 a had pointed out in his reply that the fifth claim in Suit No. LD/938/87 is unaffected in any way by this motion. This is a relief for refund of the balance of certain sum allegedly held by the defendant in the plaintiff’s behalf therein. I agree with him.” b Dissatisfied with the ruling above, the defendant appealed to the Court of Appeal, Lagos. He formulated eight issues for determination while the plaintiffs formulated only one as follows:– c “Whether the jurisdiction of the court to continue the hearing of this action has been ousted by the provision of section 11 of the Banks and Other Financial Institutions Decree 1991 of No. 25.” The Court of Appeal agreed with the plaintiffs when it said d in its judgment at page 100 of the record that:– “The issue before this Court is the correct interpretation of section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991 and applying the said interpretation to the claims in this case so as to determine whether the court below has the jurisdiction to e continue the case or not.” It then considered the issue and arrived at the conclusion that the High Court had jurisdiction to continue the consolidated suits and dismissed defendant’s appeal with costs. f Aggrieved by the decision of the Court of Appeal the defendant has now appealed to the Supreme Court. Five issues were identified for determination in his brief. The plaintiffs on their part set out only one issue for determination in their g brief. It reads:– “Whether the claims contained in the statement of claim in this action (or any of them) can strictly be regarded, be described or categorised as a claim by the plaintiffs or either of them that the h title to the shares registered in the name of the defendant vests in them or either of them than in the said defendant.” I agree entirely. The issue above was the same issue before the trial High Court and the Court of Appeal even though worded differently. In fact we are to consider whether the i claims of the plaintiffs are caught by the provision of section 11 of Decree No. 25 of 1991 which is reproduced here again:– “11. Notwithstanding anything contained in any law or in any j contract or instrument, no suit or other proceeding shall be [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC 112 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

maintained against any person registered as the holder of a a share in a bank on the ground that the title to the said shares vests in any person other than the registered holder. Provided that nothing in this section shall bar a suit or other b proceedings on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on behalf of the minor or person suffering from the mental illness.” c The provisions can be conveniently broken down as follows:– 1. No suit or other proceedings shall be maintained against a registered holder of shares in a bank on the ground that d the title to the said shares vests in any person other than the registered holder. 2. No suit or other proceedings on behalf of a minor or person suffering from any mental illness against a regis- e tered holder of shares in a bank on the ground that the registered holder holds the share on behalf of the minor or person suffering from mental illness is maintainable (see the proviso above). f I must say at once that the opening clause that: “Notwith- standing anything contained in any law or in any contract or instrument”, ought to be restricted to a provision in any law or contract or instrument which allows a litigant to maintain g the suit against a registered holder on the ground that the title in the shares vests in any other person other than the registered holder. We have not been referred to any law or contract or instrument which provides as such. I venture to h say that the clause cannot be read to cover cases of trusts more so as the suit herein is not being maintained because there is a trust, rather it is because of a lack of it. It is a settled cardinal principle of statutory interpretation i that, where in their ordinary meaning the provisions are clear and unambiguous, effect should be given to them without resorting to external aid. The duty of the court is to interpret the words of the statute as used. Those words may be j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 113 a ambiguous, but, even if they are, the power and duty of the court to travel outside them on a voyage of discovery are strictly limited (see, for example, Attorney-General of b Bendel State v. Attorney-General of the Federation (1981) 10 S.C. 1; Abioye v. Yakubu (1991) 5 N.W.L.R. (Part 190) 130; Lawal v. G.B. Ollivant (1972) 3 S.C. 124; Aya v. Hen- shaw (1972) 5 S.C. 87). c There is no doubt at all that the plaintiffs do not come under my classification (B) above. They are neither minors nor persons suffering any mental illness. We are therefore left with classification (A) only. The task now will be to exam- d ine the plaintiffs’ claims or reliefs one by one to see whether any of them is covered thereunder. It should be noted at once that the only ground for disqualification provided under (A) above, and in fact under section 11 of Decree No. 25 e of 1991, is “that the title to the said shares vests in any other person than the registered holder”.

So that unless the plaintiffs specifically claim that title in f the shares vests in them or in any person other than the defendant registered holder, it would be difficult to bring them under section 11 of the Decree. It is common ground as stated in paragraph 4 of the affidavit in support of the mo- g tion above, that the shares in dispute are registered in the name of the defendant in the books of Societe Generale Bank Ltd as holder thereof. The consolidated suits in no way sought to challenge or deny that the defendant is the registered holder of the shares in question or that the shares are h vested in him. I think therefore that Chief Williams, S.A.N., was right when he said that the plaintiffs are not challenging the fact that the defendant is the registered owner of the shares, but that the defendant is a trustee of those shares for i the plaintiffs as the beneficial owners. That in my view is the plain and ordinary meaning of the plaintiffs’ claims in this case. I appreciate that there might be problems in respect of the claim for rectification depending on what turns j out to be rectified after the trial. Definitely it could not be [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC 114 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the rectification of the name of the defendant as a registered a holder of the shares which section 11 (ibid) forbids; but it could even be the number of shares or any other error as may be revealed during the trial. But once the defendant is b declared a trustee of any of the shares for the plaintiffs, the question of rectifying the register of shareholders to reflect their names would no more arise because defendant cannot be a trustee unless he holds the shares in his name to enable c him to exercise control over them. There is no doubt at all that section 11 (ibid) sought to oust the jurisdiction of the court to entertain matters in respect of registered shareholders in banks. Therefore, being an ouster d clause, the provision will have to be construed strictly and very strictly too (see Barclays Bank v. C.B.N. (1976) 1 All N.L.R. 409). Ouster clauses must not be construed liberally, or loosely or wantonly. And that is what I have endeavoured e to do in this case. We must not forget that a constructive trust, as in this case, is imposed by equity on the ground of conscience and it is not based on the prior or presumed intention of the parties. I would like to believe that the parties f herein are conscionable people. A constructive trust is a trust to be made out of the circumstances. The trial High Court was therefore right when it said:– “The question of whether or not there is a trust concerning the shares held in the name of the defendant in S.G.B.N. is far from g being determined and cannot be until the whole evidence is taken.” The Court of Appeal was equally right when it held as per Ubaezonu JCA, who read the lead judgment, that:– h “The present suit does not challenge or deny that the appellant is the registered holder of the shares in question or that the shares are vested in him. No. What I understand him to be saying is:– I concede that the shares are vested in you but, you hold it [sic] in trust for me.” i I think that, if as a result of the plaintiffs’ claims, the defendant is successfully pronounced to be a trustee of any of the shares thereof, he, the defendant, will still remain the registered legal owner of the shares while the plaintiffs will j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Kutigi JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 115 a become the beneficial owners only, a trust relationship being equitable generally. It is of no consequence whatsoever that the defendant, though a registered holder, is a mere notional b or nominal owner of the shares while the plaintiffs are the real beneficial owners. That is exactly what the law of trust is all about. It is not the function of any court to change the law and Decree No. 25 of 1991 has not changed it. It is none c of the business of the court to read into section 11 other meanings simply because the court does not like the natural and direct result of its application which does not lead to any absurdity. d I must observe that this being an interlocutory application, I must avoid making any observation in the judgment which might appear to prejudge the main issues in the proceedings relative to the interlocutory application (see for example e Egbe v. Onogun (1972) 1 All N.L.R. (Part 1) 95; Ojukwu v. Governor of Lagos State (1986) 3 N.W.L.R. (Part 26) 39. It was therefore necessary for me to have restricted myself to the single issue identified by the plaintiffs and the lower f courts for determination as above. In conclusion this appeal fails and it is hereby dismissed. I hold that the two lower courts, the trial High Court and the Court of Appeal, were right when they respectively came to g the conclusion that the High Court has the jurisdiction to continue with the consolidated suits herein. The plaintiffs are awarded costs assessed at one thousand naira (N1,000) against the defendant. h WALI JSC: I have read in advance the lead judgment of my learned brother, Kutigi JSC, and I agree with the reasoning and conclusion that the appeal be dismissed. I however wish i to make the following contributions:– The plaintiffs:– (1) Mrs F.M. Saraki; and j (2) Dr. Olusola Saraki [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC 116 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. by their amended statement of claim in Suit No. LD/845/87 a claimed against the defendant, the following reliefs:– “(1) A declaration that the 2,400,000 shares and the Bonus Scripts and other shares attached thereto standing in the b name of the defendant in the Register of Shareholder of So- ciete Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the second plaintiff; c (2) An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein; (3) An order of injunction restraining the defendant from hold- d ing or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities; (4) An order for rectification of the Register of Shares to give e effect to any judgment delivered herein.” The defendant, in his amended statement of defence counter- claimed as follows:– “46. WHEREUPON the defendant by way of counter-claim f claims against the second plaintiff the sum of N730,000 being money advanced to the second plaintiff or to his order at his request. 47. The defendant also claims interest thereon at the rate of g 15% per annum from the 15th day of May, 1986 until payment.” Also on the amended statement of claim to Suit No. LD/938/87, Dr. Sola Saraki v. N.A.B. Kotoye, the plaintiff h claimed the following reliefs against the defendant:– “(1) A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in i trust for the plaintiff. (2) An order directing an inquiry into the amount of any dividend, which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 117 a (3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. b (4) An order for rectification of the Register of Shares to give effect to any judgment delivered herein. (5) An order for refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plaintiff’s be- c half.” The defendant on his part and in his further amended statement of defence claimed against the plaintiff as follows:– “(i) A declaration that of the 6,876,840 shares standing in the d name of the plaintiff in the Register of Members of Societe Generale Bank Nig. Limited 2,783,483 therefore are not held by the plaintiffs beneficially but upon trust for the plaintiff and the defendant for disposal, as they shall both agree to deserving Nigerians of their choice. e (ii) An injunction restraining the plaintiff from dealing with the said shares as if he were the sole beneficial owner.” The two suits were consolidated for hearing. While the hearing was in progress, the defendant, by a motion on notice f dated 16th March, 1992 applied to the this Court for an order:– “Striking out the consolidated suits herein on the ground that this Honourable Court has no jurisdiction to continue to entertain same g and or allow the proceedings to be maintained against the defendant/applicant.” The application was opposed. After hearing arguments from both parties, the learned trial Judge, Olusola Thomas J, h delivered his Ruling on 27th November, 1992 in which he opined thus:– “Turning again to the provisions of section 11 of Decree No. 25 of 1991, one finds that the restriction of [a] suit or other proceeding i against a registered holder of a share in the bank as provided in the main part thereof is when one party challenges the registered holder that his ‘title to the said shares vests in any person other than himself’. On the other hand the proviso used a different language when exempting the minor or person suffering from mental j illness, that is, ‘on the ground that the registered holder holds the [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC 118 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

shares on behalf of the minor or person suffering from mental ill- a ness’” and then declared:– “I do not find that section 11 bars this suit or other proceeding b based on the claim in the first four paragraphs of the consolidated suits from being maintained against the defendant. The question of whether or not there is a trust concerning the shares held in the name of the defendant in S.G.B.N. is far from being determined and cannot be until the whole evidence is taken.” c The defendant appealed against this Ruling to the Court of Appeal. And the Court of Appeal also after hearing the appeal opined thus before dismissing the said appeal:– d “The provision of section 11 of the Decree may be broken up as follows:– No suit or proceedings shall be maintained against:– (i) A registered holder of shares in a bank; e (ii) On the ground that the title of the shares so registered in his name vests in another person other than himself. Thus, if any person brings an action in any court to say that title of f the shares in a bank registered in A’s name does not vest in A but in B, the jurisdiction of the court is ousted from entertaining such an action. The registration of the shares of a bank in the name of a person is absolute as to the person in whom the title to the said shares vests. The Decree is clear on this and gives no room for g argument or speculation. The only issue in this case is whether (A) in whose name the shares are registered can hold the same in trust for a third party (B). The Decree is silent on this. In interpreting a statute, a court does not import into it what it does not say. The Decree talks of title or a person registered as holder. It does not h talk about beneficial interest in the said shares or whether the person in whom the title vests can or cannot hold the shares in trust for another person.” The defendant has now further appealed to this Court. i Both parties filed and exchanged briefs of argument as required by the Rules of Court. In the brief filed by the defendant now the appellant, five issues out of the six grounds filed by him were identified for determination, while the j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 119 a plaintiffs, now the respondents, formulated only one issue for determination. Since the main and determining issue in this appeal is the b interpretation of section 11 of Decree No. 25 of 1991, in my view the issue formulated by Chief William, S.A.N., is the appropriate one for the purpose of determining whether the trial court has jurisdiction to continue with the hearing of the c plaintiffs’ case as formulated in the pleadings, and it reads thus:– “Whether the claims contained in the statement of claim in this d action or (or any of them) can strictly be regarded, be described or categorised as a claim by the plaintiffs or either of them than title to the shares registered in the name of the defendant vests in them or either of them than the defendant.” e Both learned Senior Advocates agreed that the materials to look at in deciding this issue of jurisdiction are the statement of claim filed, and in the present case, the amended statement of claim in Suit No. LD/845/87, the second amended f statement of claim in Suit No. LD/938/87, and the defendant’s counter-claim in the amended statement of defence in Suit No. LD/845/87 and the counter-claim in further amended statement of defence in Suit No. LD/938/87. In this regard, both parties agreed that the shares in dispute are g registered in the name of the defendant. But the plaintiff contended that this notwithstanding, section 11 did not bar the plaintiffs’ claim to the beneficial ownership of these shares. h Undoubtedly, looking at the averments contained in the pleadings of both parties, the issues of trust, trustee and beneficiary are very prominent and, therefore in my view, i Ubaezonu JCA was not totally wrong when he summarised the determinant issue in the appeal before them in his lead judgment as follows:– “The only issue in this case is whether A in whose name the shares j are registered can hold the same in trust for B.” [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC 120 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

I do not think, having regard to the pleadings earlier referred a to, one should quarrel so much with the way the learned trial Justice recast the germane and determining issue in this appeal. b Now section 11 of Decree No. 25 of 1991 provides thus:– “11. Notwithstanding anything contained in any law or in any contract or instrument no suit or other proceeding shall be maintained against any person registered as the holder of a c share in a bank on the ground that the title to the said shares vests in any person other than the registered holder. Provided that nothing in this section shall bar a suit or other proceedings on behalf of the minor or persons suffering d from mental illness.” In the course of hearing this appeal, this Court suo motu raised the question of retrospectivity of section 11 (supra), and while learned Senior Advocate for the defendant/ e appellant submitted that it has retrospective application, learned Senior Advocate for the plaintiffs/respondents, did not make any submission on the issue. It is a well- established principle of interpretation of statutes that, where f the provision of any law ousts the jurisdiction of the court on any matter, such a provision shall be narrowly and strictly construed, unless it clearly and unambiguously states so (see Dove v. Dove (1963) 321; (1993) 2 W.L.R. 714). In this g case, the Court of Appeal, while interpreting section 12(3) of the Matrimonial Causes Act, 1950 which provided that if the spouse obtaining a decree nisi of divorce did not make an application for it to be made absolute six months after the h trial, then the other spouse could make application within a further period of three months, if the circumstances war- ranted obtaining a decree absolute, the Court of Appeal held that this did not oust the jurisdiction of the court to substitute a decree of judicial separation for a decree nisi, because, i “. . . had it been the intention of the legislature to revoke the jurisdiction it would have been done in a clear way than by inference from the subsection” (see also Commissioners of Customs and Excise v. Cure and Deeley Ltd (1962) 1 Q.B. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 121 a 340; Barclays Bank v. C.B.N. (1976) 1 All N.L.R. 409 at 421 and Attorney-General Bendel State v. Attorney-General Federation (1981) 10 S.C. 1). b This same principle was emphasised by Viscount Symonds in Smith v. East Elloe R.D.C. (1956) A.C. 736 where he said at 750:– “It is a principle not by any means to be whittled down that the c subject recourse to Her Majesty’s courts for determination of his rights is not to be excluded except by clear words.” It shall also not be made to apply retrospectively to affect the acquired right before it or to affect litigations pending in d court, unless such intention is manifestly and unambiguously made clear in it. See Hickson v. Darlow (1883) 23 Ch.D. 690 where it was held that the Bills of Sales Act (1878) (Amendment) Act, 1882 which made void bills of e sale not registered within seven days of their execution, would not apply to instruments executed more than a week before the commencement of the Act. It was similarly held in Re: Brandon’s Patent (1884) 9 App. Cas. 589 that the f provisions of the Patents, Designs and Trade Marks Act, 1883, would not affect any patents granted before its commencement. See also the case of Moon v. Durden 2 Ex 22 in which the g majority judgment of that court (3 to 1) while interpreting the 18th section of Statute 8 and 9 Vic 109 which is worded thus:– “And be it enacted that all contracts or agreements, whether by parol or in writing, by way of gaming or wagering, shall be null h and void, and that no suit shall be brought or maintained in any court of law or equity for recovering any sum of money or valuable thing alleged to be won upon any wager, or which shall have been deposited in the hands of any person to decide the event on i which any wager shall have been made” held that the provision had no retrospective effect to affect suits commenced before its coming into operation. In Colonial Sugar Refining Co v. Irving (1905) A.C. 369, j the Australian Commonwealth Judiciary Act, 1903 which [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC 122 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. had abolished a right of appeal to the Privy Council from the a Supreme Court of Queensland, it was held not to apply retrospectively to a suit pending when the Act was passed and decided by the Supreme Court after that date. b In Re Athlumney (1898) 2 Q.B. 547, Wright J opined thus:– “Perhaps no rule of construction is more firmly established than this, that a retrospective operation is not to be given to a statute so c as to impair an existing right or obligation, otherwise than as regards a matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in a language that is fairly capable of either interpretation, it ought to be construed as prospective only.” d Looking at the wording of section 11, I am of the view that it has neither retrospective effect, nor does it affect the issue of relationship of a trustor and a trustee and the beneficial interest accruing to the former from shares in a bank held e and registered in the name of the latter for the benefit of the former. To hold otherwise is to import into the statute something that was not intended or contemplated by the legislature. The Decree only ousts the jurisdiction of the court from f determining a dispute challenging the vesting of bank shares in the name of the person in whose name they are registered. The proviso to section 11 (supra) only provides exceptions to the main section in cases of persons of unsound mind or g minors. The proviso in my view does not affect the question of trust or a claim of beneficial interest from such trust; and the case of Western Derby Union v. Metropolitan Life As- surance Society (1897) A.C. 647 cited by learned Senior h Counsel for the plaintiffs/respondents is apposite. In that case Lord Herschell ,while dealing with the effect of the proviso to the enactment, said:– “I decline to read into any enactment words which are not to be i found there, and which would alter its operative effect because of provisions to be found in the proviso. Of course a proviso may be used to guide you in the selection of one or other of two possible constructions of the words to be found in the enactment, and show when there is doubt about its scope, which it may reasonably j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 123 a admit of doubt as to its having this scope or that, which the proper view to take, but to find in it an enacting provision which enables something to be done which is not to be found in the enactment itself on any reasonable construction of it simply because other- b wise the proviso would be meaningless and senseless, would, as I have said, be in the highest degree dangerous . . . and, accordingly, a proviso is inserted to guard against the particular case of which a particular person was apprehensive, although the enactment was c never intended to apply to his case, or to any other similar cases at all.” Commenting on the views (supra) Lord Davey opined thus:– d “My Lords, it seems to me that the whole argument of the appellant really comes to the old and apparently ineradicable fallacy of importing into an enactment, which is expressed in clear and apparently unambiguous language, something which is not contained in it, by what is called implication from the language of a proviso e which may or may not have a meaning of its own. I entirely agree with what has fallen from my noble and learned friend opposite (Lord Herschell) upon this subject.” The style of Military Regimes’ legislations on ouster of the f court’s jurisdiction has always been plainly and clearly drafted such that no iota of doubt is left as regard their intent, purport and scope (see, for example, section 5(1) of Decree No. 47 of 1979 and section 2(1) of Decree No. 48 of g 1977). I shall briefly touch upon the issue of fair hearing. I have gone through the briefs of argument filed by both parties in the Court of Appeal and I find myself convinced and satis- h fied that both patties were heard on the germane and determinant question of ouster of the court’s jurisdiction by section 11 of Decree No. 25 of 1991. The Court of Appeal, after considering the written and oral submissions by learned i Counsel, came to the conclusion, as did the trial Court, that section 11 did not oust the jurisdiction of the court to hear the plaintiffs’ claim. Dealing with issues other than this one would be academic, as the result derived therefrom will have j no effect on the court’s power to continue with the hearing [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Wali JSC 124 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. of the action. There is no miscarriage of justice. I come to a the conclusion that section 11 has not ousted the trial court’s jurisdiction to continue with the hearing of the cases now pending before it. Both the decisions of the trial court and b the Court of Appeal are on firm ground on this issue and I equally affirm them. It is for these reasons contained in the lead judgment of my learned brother, Kutigi JSC, that I also hereby dismiss this c appeal and subscribe to the consequential orders contained in it. ONU JSC: I had before now the privilege of reading in draft d form the judgment of my learned brother, Kutigi JSC, just delivered and with it I am in complete agreement. I wish, however, to add some comments of mine in elaboration as follows:– e This appeal arose from the decision of the Court of Ap- peal, Lagos Division delivered on 30th June, 1993 which dismissed an appeal by defendant, herein appellant, from the Ruling of the Lagos High Court (per Olusola Thomas J) f wherein that court decided that its jurisdiction to continue the trial of two consolidated actions before it was not ousted by section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991 (hereinafter in this judgment referred g to as Decree No. 25). Decree No. 25, section 11 states:– “Notwithstanding anything contained in any law or in any contract or instrument, no suit or other proceeding shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the said share vests in any person other h than the registered holder. Provided that nothing in this section shall bar a suit or other proceedings on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on i behalf of the minor or the person suffering from the mental illness.” But first, the genesis and historical background of the case giving rise to this appeal. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 125 a It all began from inception in 1987 at the Lagos State High Court wherein the plaintiffs, Mrs F.M. Saraki and Dr. Olu- sola Saraki had in Suit No. LD/845/87 jointly claimed from b the defendant, N.A.B. Kotoye, as per their amended statement of claim, as follows:– “(1) A declaration that the 2,400,000 shares and the Bonus scripts and other shares attached thereto standing in the c name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the second plaintiff; (2) An order directing an inquiry into the amount of any divi- d dends which may have been received by the defendant as holder of the afore mentioned shares up to the date of the judgment herein; (3) An order of injunction restraining the defendant from hold- e ing or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities; (4) An order for rectification of the Register of Shares to give effect to any judgment delivered herein.” f The defendant in his own amended statement of defence counter-claimed against the plaintiffs (vide his paragraphs 46 and 47) thus:– g “46. Whereupon the defendant by way of counter claim claims against the second plaintiff in the sum of N730,000 being money advanced to the second plaintiff or to his order at his request. 47. The defendant also claims interest thereon at the rate of h 15% per annum from the 15th day of May, 1986 until payment.” In the second suit, Suit No. LD/938/87, the second plaintiff alone claimed against the defendant in his second amended i statement of claim as follows:– “1. A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in j trust for the plaintiff. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 126 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

2. An order directing an inquiry into the amount of any divi- a dends which may have been received by the defendant as holder of the aforementioned shares up to the date of judgment. b 3. An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. c 4. An order for rectification of the Register of the shares to give effect to any judgment delivered therein. 5. An order for the refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plaintiffs’ behalf.” d In his further amended statement of defence and counter- claim, the defendant pleaded thus:– “(i) A declaration that the 6,876,840 shares standing in the e name of the plaintiff in the Register of Members of Societe Generale Bank Nigeria Limited 2,783,483 thereof are not held by the plaintiff beneficially but upon trust for the plaintiff and the defendant for disposal as they shall both agree to deserving Nigerians of their choice. f (ii) An injunction restraining the plaintiff from dealing with the said shares as if he were sole beneficial owner.” Pleadings having been duly exchanged by the parties; the g two suits which were consolidated went to trial. Before the conclusion of hearing and following the promulgation of Decree No. 25, by the Federal Military Government, the defendant brought an application, on grounds of jurisdiction, h in which he prayed the trial High Court for:– “Striking out the consolidated suits herein on the ground that this Honourable Court has no jurisdiction to continue to entertain same and/or allow the proceedings to be maintained against the defen- i dant/applicant.” In his considered Ruling, Olusola Thomas J held that, in the light of the submissions of learned Counsel on both sides, it was his conclusion that there was want of clarity in the j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 127 a drafting of section 11 of Decree No. 25 and that, therefore, there was an ambiguity. He then went on to hold that the interpretative function of the court was called for, adding b that the two alternative interpretations of section 11 (ibid) would have the effect of either:– (i) taking away the beneficial interest of a cestui qui trust, or (ii) merely protecting the legal title of a registered holder of c shares in a bank.” He in addition maintained that:– (a) It was the duty of the court to adopt the more reason- d able construction and hold that section 11 was intended to protect the title or the legal title of a registered shareholder; e (b) Section 11 did not bar the claims of the plaintiffs from being maintained against the defendant; and (c) The question of whether or not there was a trust concerning the shares held in the defendant’s name f was far from being determined and could not be determined until the whole evidence was taken and proceeded to dismiss the defendant’s motion on 27th November, 1992. g The Court of Appeal sitting in Lagos (per Sulu-Gambari, Ubaezonu and Tobi JJCA) before which an appeal was heard on 30th June, 1993, dismissed it and held that the trial h High Court had jurisdiction to continue the consolidated suits. The defendant has further appealed to this Court complaining that the decision in the lead judgment of the court below, i per Ubaezonu JCA, was premised on a wrong issue formulated by him and failure generally on that court’s part to consider all the eight issues formulated from the 11 grounds of appeal, and that it amounted to a denial of fair hearing j contrary to section 33 of the 1979 Constitution. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 128 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In his notice of appeal dated 8th July, 1993, the defendant a filed six grounds of appeal and his amended brief of argument formulated five issues, distilled therefrom as follows:– 1. Was the issue which the Court of Appeal formulated and b decided the proper issue that arose for determination before it? 2. Did the refusal by the Court of Appeal to consider the c eight issues formulated by the defendant/appellant as arising from his grounds of appeal constitute a denial of fair hearing? 3. Was not the learned trial Judge obliged to accede to the d defendant’s prayer on the application having regard to the fact that the plaintiffs who had accepted the defendant’s main contention on the effect of section 11 of the Decree had been unable to sustain the only other propo- e sition which they had advanced in response to the defendant’s argument? 4. Does the proviso to section 11 create ambiguity or alter or affect the meaning of section 11 in any way? f 5. Did not what the learned trial Judge say amount to accepting the case made by the defendant? The issue formulated at the plaintiffs’ instance as arising for our determination is:– g “. . . the question for determination in this appeal as in the courts below involves a decision as to whether Decree No. 25 has effectively put an end to the rights of a beneficiary under a trust where the property subject to the trust are shares in a bank.” h After the exchange of briefs by the parties in accordance with the rules of this Court this case came up for hearing on 7th June, 1994. Learned Senior Advocates for both sides adopted their briefs of argument. Learned Senior Advocate i for the appellant who also filed a reply brief adopted same before each expatiated on them. I shall for the purpose of my consideration of the appeal deal with the five issues submitted at the appellant’s instance, bearing in mind, however, j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 129 a that the crux of what are contained in the five issues are, in my opinion, encapsulated in the lone issue proffered on the plaintiffs’ behalf. b Issues 1 and 2:– Issue 1 asks: Was the issue which the Court of Appeal formulated and decided the proper issue that arose for determination before it? Issue 2, on the other hand, poses the c question: Did the refusal by the Court of Appeal to consider the eight issues formulated by the defendant/appellant as arising from his grounds of appeal constitute a denial of fair hearing? The defendant has argued both in his amended d brief as well as through learned Senior Advocate on his behalf, firstly, that the court below was in error when it agreed with the plaintiffs that the only issue for determination in the appeal was that formulated by the plaintiffs and e repeated in his brief. It was contended that the sole issue which was formulated as hereinbefore mentioned did not arise from any of the nine grounds of appeal filed by the defendant in his appeal to that court. That being so, it was f erroneous for the court below to have raised an issue for determination which did not arise from the grounds of appeal. That issue as formulated in the lead judgment of Ubae- zonu JCA in the court below was:– g “The only issue in this case is whether A, in whose name the shares are registered can hold the same in trust for a third party B.” Learned Senior Advocate for the plaintiffs, Chief Williams, has, in his oral submission argued that the issue there put h could have been better stated and that, even though not strictly enough, was right or not far from being right. Be that as it may, as it was the jurisdiction of the High Court to entertain the actions, now the subject of appeal, that were i involved, the court below and even this Court, are bound to look into the matter of jurisdiction being very fundamental. This is the more so because an issue relating to jurisdiction of the court appealed from will always be considered and j determined by the court to which an appeal lies. That is to [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 130 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. say, a question as to whether or not the court from which an a appeal lies has jurisdiction, will be considered by the court to which an appeal lies even where both parties are reluctant to, or agree not to raise it, or even where the point is not b raised in the notice of appeal. See Asante v. Taawia (1949) 65 TLR 105 (a Privy Council case); Heyting v. Dupont (1961) 1 W.L.R. 1192 and Wong v. Beaumont Property Trust Ltd (1965) 1 Q.B. 173, the latter being a case where c the point of jurisdiction involved before the Court of Appeal in England was not raised in the court below or in the notice of appeal but as it went to jurisdiction, the Court of Appeal (England) considered it. Hence, in the instant case, the fact d that the defendant has not included any aspect of the question in his grounds of appeal or in the questions for determination formulated in his brief of argument before the court below, can in no way curtail the jurisdiction of the court below to decide whether or not the jurisdiction of the trial e court has been ousted by Decree No. 25. In other words, the question of whether or not the jurisdiction of the trial High Court in this case has been ousted by Decree No. 25, in my view, depends solely on the true meaning and intent of the f enactment and not upon what the defendant, or for that matter the plaintiffs, chooses or choose to put in his or their grounds of appeal or cross-appeal or brief or pleading or any document of a similar purport. g Be it noted and as indeed conceded by learned Senior Counsel on both sides, that when determining whether or not a court has jurisdiction, it is the statement of claim alone that h must be looked at in a case of this nature. Indeed, if none of the parties chooses to raise the point or where all of them do agree that the trial court has jurisdiction, the court is not bound to refrain from holding a different view should it be convinced that such a view represents the correct decision in i law on the question of jurisdiction (see Owoniboys Techni- cal Senvices Ltd v. John Holt Ltd (1991) 6 N.W.L.R. (Part 199) 550; Osadebay v. Attorney-General, Bendel State (1991) 1 N.W.L.R. (Part 169) 525; Adegoke v. Adibi (1992) j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 131 a 5 N.W.L.R. (Part 242) 410 at 420 and Tukur v. Governor of Gongola State (1989) 4 N.W.L.R. (Part 117) 517). I am therefore not impressed by the argument of learned Senior b Advocate for the defendant when he contended that the issue formulated and decided by the court below was not an issue that arose for determination in the appeal and that, furthermore, that the result was that the defendant was never heard c by the court below on the issues properly placed before them when Ubaezonu JCA, reading the lead judgment of that court held inter alia:– “The only issue in this case is whether A in whose name the shares d are registered can hold the same in trust for a third party B” the latter which was derived from the oral submission of Mr Ladi Williams wherein he said:– “What we are saying is that this is not to be interpreted to mean e where you have a cestui que trust or beneficiary claiming under a trust, such beneficiary cannot direct the person in whom title vests how to deal with the shares and dividends attached thereto.” I therefore share the learned Senior Advocate, Chief Wil- f liams’ view, that this Court may raise the point of jurisdiction even if the two courts below did not do so and were overruled (see Vandevell’s Trust (No. 2) (1974) Ch. 269 (per Lord Denning)). It is my considered view, therefore, that the g issue which the court below formulated and decided was not the wrong issue that arose for determination before it. It is accordingly answered in the affirmative. Secondly, the defendant has argued that the court below contravened his right to a fair hearing. After stating how seven other issues h apart from the first as formulated by the defendant for determination and distilled from 11 grounds (nine original and two additional) came about, it is learned Counsel for the defendant’s contention that in formulating only one issue out i of eight, the court did not only formulate the wrong issue, they, so to say, swept aside all other issues formulated by the defendant and which properly arose before them. After relying on several recent decisions of this Court such as Alhaji j Abu Momodu and others v. His Highness Alhaji Momoh and [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 132 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. another (1991) 1 N.W.L.R. (Part 169) 608 at 620, 621; Aja a Mazi Aja and another v. John Okoro and others (1991) 7 N.W.L.R. (Part 203) 260; Sylvanus Odife and another v. Geofrey Aniemeke and others (1992) 7 N.W.L.R. (Part 251) b 25 at 42 and Oshoboja v. Amuda and others (1992) 6 N.W.L.R. (Part 250) 690, it was submitted that it was erroneous on the part of the court below without examining the eight issues within the ambit of the 11 grounds of appeal c filed to conclude as they did that the eight issues were unnecessary and prolix when in fact each of them arose out of the grounds of appeal filed. The dicta in the case of Ejow- homu v. Edok-Eter Mandilas Ltd (1986) 5 N.W.L.R. (Part d 39) 1; (1986) 2 N.S.C.C. 1184 at 1193–1197 (per Karibi- Whyte JSC) 1208 (per Obaseki JSC) and 1209 (per Ani- agolu JSC) were cited to us in support of the proposition thereof. e It is next argued that the resolution of this issue is closely linked with the first issue considered above in that the question of fair hearing, like that of natural justice, must depend upon the circumstances of the case, the nature of the inquiry, f the rules of procedure applicable, the subject matter that is being dealt with and so forth. The underlying factor, however, it is maintained, is that the person concerned should also be heard by the adjudicating panel before a decision is g reached one way or the other.

After referring us to several other recent decisions of this Court on the duty of the court below to determine all issues h placed before it for determination, learned Counsel submitted that it is usual in a situation of a proved denial of the right of fair hearing for the appellate court to remit the case to the court below so that all issues raised may be properly considered. The case of Ezeoke and others v. Nwagbo and i others (1988) 1 N.W.L.R. (Part 72) 616 at 627 and Obi Awanze Okonji and others v. George Njokanma and others (1991) 7 N.W.L.R. (Part 202) 131 were called in aid. How- ever, in a situation where a court, as herein, has failed to j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 133 a consider or pronounce on issues placed before it, and a resolution of other issues by the appellate court, it will be unnecessary to remit the issues not considered to the lower court b for consideration and determination (vide Chief G.A. Titiloye and others v. Chief J. Omoniyi Olupo (1991) 7 N.W.L.R. (Part 205) 519 at 539). We were therefore urged not to remit this appeal to the court below but to determine accordingly c in view of other issues raised and considered hereafter. It is pertinent for me to advert first to the learned Senior Advocate, Chief Williams’, reaction to this question of denial of fair hearing. He submitted that the lone issue relied d on by the court below could have been better put but definitely saw nothing wrong with it since it is enough and right. I agree with Chief Williams. With utmost due respect to the learned Senior Counsel for the defendant, the questions e which a court or tribunal asks itself before arriving at a decision go to the jurisdiction of that court or tribunal to make the decision. Thus, if it asks itself the wrong question, then it would lack jurisdiction to give the decision it may give. In f the case of N.P.A. v. Panalpina (1974) 1 N.M.L.R. 82 at 115, this Court, when citing with approval the following passage from the judgment of Lord Pearce in Anisminic Ltd v. Foreign Compensation Commission (1969) 2 A.C. 147 at 195, said:– g “Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an en- quiry. Or the tribunal may at the end make an order which it has h no jurisdiction to make . . . or it may ask itself the wrong questions . . . Any of these things would cause its purported decisions to be a nullity.” I also agree with Chief Williams that it follows from the i foregoing that, in deciding whether or not the jurisdiction of the High Court is or is not ousted by Decree No. 25, it is very important for that court to ask itself the right question. Accordingly I hold that it was competent for the court below j to determine what questions the High Court should have [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 134 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. asked itself in deciding the aforementioned question. It can- a not be right, in my opinion, to suppose that the court below or this Court are bound by and cannot step outside the eight questions formulated by the defendant even if it considers, b as the court below obviously did, that those are wrong ones. The defendant’s argument that he was denied a fair hearing in the failure to consider the eight questions formulated by him cannot be sustained. Where a court is clearly convinced c that the questions which it ought to ask itself are the wrong questions, then it has no jurisdiction to consider those questions since the answers to them are only of academic interest. In the result, it is my view that it is a misconception to d argue that deciding those questions so formulated are the wrong questions, the court is contravening the right of the party to a fair hearing. For, as clearly pointed out by this Court in Kotoye v. C.B.N. (1989) 1 N.W.L.R. (Part 98) 419 at 448 (per Nnaemeka-Agu JSC):– e

“For the rule of fair hearing is not a technical doctrine. It is one of substance. The question is not whether injustice has been done because of lack of hearing. It is whether a party entitled to be f heard, before had in fact been given an opportunity of hearing. Once an Appellate Court comes to the conclusion that the party was entitled to be heard before a decision was reached but was not given the opportunity of a hearing the order/judgment thus entered is bound to be set aside.” g

See section 33(1) of the 1979 Constitution. In Sheldon v. Bromfield Justice (1964) 2 Q.B. 573 at 578, it was held that the court or tribunal should give equal treatment, opportu- h nity and consideration to all concerned in a case. And in Otapo v. Sunmonu (1987) 2 N.W.L.R. (Part 58) 587 at 605, this Court held that when a represented party is not heard or given the opportunity of being heard in a case the principles i of natural justice are abandoned.

In the instant case, I can see no denial of the defendant’s constitutional right to fair hearing being perpetuated and so this issue is accordingly answered in the negative. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 135 a Issues 3 and 5: In dealing with these issues together which state:– “3. Was not the learned trial Judge obliged to accede to the b defendant’s prayer on the application having regard to the fact that the plaintiffs who accepted the defendant’s main contention on the effect of section 11 of the Decree had been unable to sustain the only other proposition which they have advanced in response to the defendant’s argument? . . . c 5. Did not what the trial Judge say amount to accepting the case made by the defendant?” It is clear that these arose from ground 8 of the appeal d grounds as well as issues 6 and 7 canvassed in the court below. The defendant’s grouse in respect of section 11 of Decree No. 25 is that, in so far as the plaintiffs are in this action seeking to enforce a right (according to them) on a secret contract and based on a common-law right which e exists between a trustor and a trustee, the action cannot be maintained. In other words, the section prohibits the maintenance of a:– “. . . suit or other proceeding . . . against any person registered as f the holder of a share in a bank on the ground that the title to the said share vests in any person other than the registered holder.” The argument of the defendant on the point which, in my view, is not radically different from the submission of the g plaintiffs is that the trustee is the legal registered owner, that the trustor is the beneficial owner in equity and that the beneficial owner or trustor cannot any longer by court action enforce rights which he undoubtedly has against the trustee, h on the ground that the trustee is not the true owner, but that the trustor or beneficiary is. Put the other way, the plaintiffs’ contention is that the Decree only precludes the court from determining a dispute as to whether title to a share vests in A i (who is not the registered holder). I am satisfied that both Chiefs Ajayi and Williams, Senior Advocates, are at one in saying that, in such a situation, the Decree treats the fact that B is the registered holder of the j shares as conclusive evidence of his title thereto. That is as [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 136 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. far as both learned Senior Counsel are ad idem. For, while a learned Senior Advocate for the defendant maintains, and this is the point of departure between both learned Senior Advocates, that the Decree applies to an action which was b filed before the decree came into force, the learned Senior Advocate for the plaintiffs holds a contrary view. In sum, the two learned Senior Advocates are agreed as to the meaning of interpretation to section 11 of Decree No. 25 except c the rider thereto, which learned Senior Advocate for the defendant submitted, allows a cestui qui trust to be given a direction as to what to do with the shares by the beneficial owner who, although not denied access to the courts, the d trustee may obey or refuse to obey him. Learned Senior Advocate for the plaintiffs, for his part after spelling out the dichotomy between a claim against a trustee who acknowledges a trust and is carrying out the directions of the beneficiary, in which case there is nothing to go to court over but that e where he says he is the beneficiary’s trustee by denying the trust placed in him, section 11 will not bar the beneficiary from suing him since the court must view such a situation with seriousness. The case made for the defendant in regard f to the meaning of the enactment is summed up as follows:– “The situation created by section 11 is almost identical with that created by a Statute of Limitation which prevents a debt being recoverable by action after a specified period of time. It does not g prevent a creditor demanding payment after the lapse of [the] statutory period; neither does it prevent the debtor from paying the debt in such circumstances. But if the debtor were to refuse to pay, and the creditor commences an action for recovery, he will be successfully met by a plead of the Statute of Limitation in bar. This is h because, in spite of the right, the remedy for enforcement is taken away by statute.” With due respect, I do not think that the Decree in any way precludes the court from deciding a claim by A that B holds i the shares registered in his (B’s) name in trust for A. This is because, on a proper construction, it cannot be said that in such a case A would be questioning the title of B to the shares on the ground that title is vested in someone other j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 137 a than B. For while an honest trustee will allow trust property to be transferred into the assets of a beneficiary, it will be otherwise if the trustee is a dishonest man. In other words, b what A would be saying is:– “I do not dispute that title to shares are vested in B who is the registered holder thereof. But I ask the court to declare that he holds those shares in trust for me.” c I share Chief Williams’ view that the fact that the Decree ought to be given the above meaning is a well established canon of construction that a statute should not be interpreted in a way that will enable it to be used as an instrument of d fraud. The meaning urged upon us by the defendant, in my view, would be tantamount to saying that where, before the enactment came into force B had agreed to and accepted to hold shares in a bank in trust for A, he is, by the enactment, e authorised to treat those shares as his own beneficial property and to keep dividends accruing therefrom for his own use. This, I agree, is patently absurd and such a construction ought to be rejected. A cursory look at the amended state- f ment of claim in Suit LD/845/87 and the second amended statement of claim in respect of Suit No. LD/938/87, shows that they depict huge sums of money operated in joint accounts, transfers to Societe Generale Bank from other banks g and other manner of heavy monetary transactions between the defendant as trustee and the plaintiffs as beneficiaries and that these took place to give rise to the actions consolidated herein. Similarly, the defendant in his further amended statement of defence and counter-claim asked for certain h items to be taken account of against the plaintiffs in their mutual transactions. It is pertinent to point out that the plaintiffs joined issues with the defendant by filing a reply to the further amended statement of defence and counter-claim. i That being so, it would appear to me scandalous for one to suggest, as the defendant has done, and without as much as batting an eyelid, that if those facts were established, the defendant would be entitled to convert the alleged fabulous j millions of Naira in the form of shares and scripts etc. It is [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 138 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. well established that in construing or interpreting a statute a one must avoid a meaning, which results in taking away private rights of property without compensation. It was Francis Bennion in his authoritative book, Statutory Inter- b pretation (2ed), who in those immortal words at section 164 stated as follows:– “Legislative intention is not a myth or fiction; but a reality founded in the very nature of legislature.” c On the facts of this case, the defendant’s contention, if I understand him well, is that the enactment would appear to enable him to take beneficial rights of the plaintiffs for his (defendant’s) benefit without having to pay a kobo for the d bonanza. In Maxwell on Interpretation of Statutes (12ed) pages 251–252 the learned author writes:– “Statutes which encroach on the rights of the subject, whether as regards person or property, are subject to a strict construction in e the same way as Penal Acts. It is a recognised rule that they should be interpreted if possible, so as to respect such rights, and if there is any ambiguity the construction which is in favour of the free- dom of the individual should be adopted. One aspect of this approach to legislation is the presumption that a statute does not f retrospectively abrogate vested rights, another is the presumption that proprietary rights are not taken away without provision being made for compensation” (italics is mine for comments). On the need to discourage a statute that is capable of retro- g spectively abrogating proprietary rights, I need only refer to the decision of this Court in the case of Din v. Attorney- General of the Federation (1988) 4 N.W.L.R. (Part 87) 147, where it was held, inter alia, that statutes which encroach on h the rights of a subject be they personal or proprietary rights, attract strict construction by the courts: they are construed fortissime contra preferences, if possible so as to respect such personal or proprietary rights. i Further, on the need to discourage retrospectivity, the words “shall be maintained” as used in section 11 of Decree No. 25 (see for definition of the section at page 1 ante) it is my view that bringing to bear a strict interpretation to those j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 139 a words, they ought to be construed as having retroactive effect. In this wise, I adopt what Stroud’s Judicial Diction- ary relevantly says about the word “maintain”. It states:– b “ ‘To maintain’ an ACTION is to support one which has already been brought (per Platt B. Moon v. Durden; 2 Ex 22, cited BROUGHT) but the majority of the court in that case held that, though the Gaming Act, 1845 provided that no suit should he ‘brought or maintained’ for the recovery of a wager, yet that was c not enough to give the Act a RETROSPECTIVE effect so as to prevent a plaintiff, who had begun his action for a wager before the act was passed from going on with it after the passing of the Act” (italics mine for emphasis). d While the majority decision accord with my view, it is merely persuasive. See also Halsbury’s Laws of England (4ed) at 557, paragraph 906 where the learned authors say:– e “Unless it is clearly and unambiguously intended to do so a statute should not be construed so as to interfere with or prejudice established private rights under contracts or the title to property or so as to deprive a man of his property without his having an opportunity of being heard; in particular, an intention to take away property f without giving a legal right to compensation for the loss of it is not to be imputed to the legislature unless that intention is expressed in unequivocal terms.” See also section 40(1)(a) and (b) of the 1979 Constitution g which provides:– “40(1) No movable property or any interest in an immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall be ac- h quired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by a law that, among other things:– (a) requires the prompt payment of compensation there- i for; and (b) gives to any person claiming such compensation a right of access for the determination of his interest in the property and the amount of compensation to a court of law or tribunal or body having jurisdiction j in that part of Nigeria.” [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 140 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In a country where for over 24 years, Decrees passed by the a Military Administration containing ouster clauses have been the rule rather than exceptions, to import into Decree No. 25 such a retrospectivity would, in my view, do violence to the b legislature’s intention and constitute a breach of the plaintiffs’ fundamental rights enshrined in the 1979 Constitution. See also:– 1. Bello v. Diocesan Synod of Lagos (1973) E.C.S.L.R. c (Part 1) 330; (1973) 3 S.C. 103; (1973) 1 All N.L.R. (Part 1) 249; 2. Peenok Investment Limited v. Hotel Presidential Ltd (1982)12 S.C. 1 at 25. d Finally, when it is known that the writs bringing to life the two consolidated actions from which the appeal herein ema- nated in 1987 and that Decree No. 25 was promulgated in e 1991, under no pretext, guise or guile ought section 11 of the Decree to affect rights, equitable or legal that had accrued before the Decree came into force. In other words, retrospectivity ought not to be allowed to fetter such rights unless f unequivocally provided for. Fortunately, the Decree makes no such express provision and all I have to do is to give it its ordinary meaning. My answer to both issues 3 and 5 is in the negative. g Issue 4:– Learned Senior Advocate for the defendant has submitted on this issue which asks:– h “Does the proviso to section 11 create any ambiguity or alter or affect the meaning of section 11 in any way?” that it is meant to make the meaning of section 11 of Decree No. 25 clearer. That this must be so, he argues, is because:– i (i) The proviso is designed to exclude from the operation of the main body of section 11 two specific cases which fall within the class affected by the operation of section 11. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 141 a (ii) Both minors and persons suffering from mental illness are persons who lack legal capacity to hold land; but whose properties are held legally on their b behalf by trustees appointed by the courts or under the authority of the laws of the land and who hold legal estates on behalf of the beneficial owners of the infants and persons of unsound mind. c (iii) Without the proviso to section 11, children and persons suffering from mental illness whose property are held on their behalf by trustees who have the legal estate, would be unable to enforce their rights as beneficial owners by court action because d of the provisions of the body of section 11 which bars their rights. (iv) It follows that the main body of section 11 is de- e signed and intended to bar the right of action of beneficiaries in all other cases in which shares in the bank are claimed to be held by one person as trustee for another. f With utmost due respect to learned Counsel for the defendant, this submission on the proviso cannot be absolute, lacking as it does, the unqualified authority attributed to it. The reason is that the court will not modify, enlarge or contract the scope and meaning of any enactment merely be- g cause of the proviso to that enactment. It was Lord Herschell who put it lucidly and unambiguously in the case of Western Derby Union v. Metropolitan Life Assurance Society (1897) A.C. 647 at 655–656 thus:– h “I decline to read into any enactment words which are not to be found there, and which would alter its operative effect because of provisions to be found in any proviso. Of course a proviso may be used as a guide in the selection of one or other of two possible i constructions of the words to be found in the enactment, and show when there is doubt about its scope, when it may reasonably admit of doubt as to its having this scope or that, which is the proper view to take of it; but to find in it an enacting provision which enables something to be done which is not to be found in the enact- j ment itself on any reasonable construction of it, simply because [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 142 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

otherwise the proviso would be meaningless and senseless, would, a as I have said, be in the highest degree dangerous, and, for this reason, one knows perfectly well that it not infrequently happens that persons are unreasonably apprehensive as to the effect of an enactment when there is really no question of its application to b their case; they nevertheless think that some court may possibly hold that it will apply to their case, and they suggest if it is not intended to be applicable no harm would be done by inserting a proviso to protect them; and, accordingly, a proviso is inserted to c guard against the particular case of which a particular person was apprehensive, although the enactment was never intended to apply to his case, or to any other similar cases at all.” Commenting on the views expressed by Lord Herschell, Lord Davey declared at 657 as follows:– d “My Lords, it seems to me that the whole argument of the appellants really comes to the old and apparently ineradicable fallacy of importing into an enactment, which is expressed in clear and apparently unambiguous language, something which is not contained e in it, by what is called implication from the language of a proviso which may or may not have a meaning of its own. I entirely agree with what has fallen from my noble and learned friend opposite (Lord Herschell) upon this subject.” Since the provisions of section 11 of Decree No. 25 are in f themselves “precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, declare the intention of the law giver . . .” See the g celebrated Sussex Peerage case (1843–60) All E.R. 54 at 63 (per Tindal CJ). While I am therefore not persuaded to hold, as did the learned trial Judge, that an ambiguity resulted in the interpretation of section 11 of Decree No. 25 (ibid), I am h nonetheless satisfied that that section does not bar the claims of the plaintiffs from being maintained against the defendant. This is because, in spite of Mr Ladi Williams’ concession that “we cannot maintain a suit or proceeding on the i ground that the title of the said shares vests in us”, connoting that:– (i) the defendant is the registered holder of the shares; (ii) the shares are vested in the defendant; j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 143 a (iii) the defendant holds the shares in trust for the plaintiffs, that concession presupposes that the defendant is amenable b to the plaintiffs’ direction. Once the defendant denies ac- countability that the plaintiffs are the beneficial owners or the semblance of such a conduct to wit that:– (a) the ground upon which the plaintiffs inter alia claim c rectification of the register of members of the company that the shares do not truly belong to the defendant (in whose name they are registered) but in the plaintiffs; d (b) the ground upon which the plaintiffs claim a declaration that the defendant holds the shares as trustee for them and that they and not him are the true owners of the shares, e the jurisdiction of the trial court to look into the matter from the date the enactment took effect, which I hold should operate prospectively, ought not, in my respectful view, to be ousted. In the light of this, the conclusion arrived at by the f court below to the effect that:– “It is my respectful view that to that extent the jurisdiction of the court is not ousted as the respondents are not seeking to maintain a suit or proceeding against the appellant that the title of the shares g are not vested in him” cannot, in my opinion, be faulted and should be allowed to stand along with other conclusions arrived at by it. The result of all I have been saying is that the decisions of h the two courts below being clearly concurrent findings which this Court by a long line of decided cases has always held it will be loath to interfere with unless the appellant can show special circumstances, either that there was a miscar- i riage of justice or serious violation of some principles of law or procedure or that the findings are erroneous, i.e. error in substantive or procedural law:– 1. Lokoyi v. Olojo (1983) 8 S.C. at 33; (1983) 2 j S.C.N.L.R. 127; [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Onu JSC 144 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

2. Ezewani v. Onwordi (1986) 4 N.W.L.R. (Part 33) 27; a 3. Lamai v. Orbih (1980) 5–7 S.C. 28; and 4. Balogun v. Amubikahun (1989) 3 N.W.L.R. (Part b 107) 18, to mention but a few, I will decline to disturb the decision in the instant case.

Finally, the case in hand being an interlocutory appeal where c care and caution ought to be exercised not to make comments or findings which may have the effect of affecting the merits of the case or remove the substratum thereof, the less said about the claims disclosed in the parties’ pleadings d which ought to be kept more or less sacrosanct before hearing is embarked upon, the better (see Obeya Memorial Hos- pital v. Attorney-General of the Federation (1987) 3 N.W.L.R. (Part 60) 325). e For these reasons and those given by my learned brother, Kutigi JSC, with which I had signified my concurrence, I will myself dismiss this appeal and affirm the decisions of the two courts below. The case is remitted to the trial court f for the parties to continue with the hearing thereof. I award N1,000 costs to the plaintiffs/respondents.

ADIO JSC: The respondents, as plaintiffs filed an action, g Suit No. LD.845/87, against the appellant in the Lagos High Court. Their claim, as stated in their amended statement of claim, was as follows:– “(1) A declaration that the 2,400,000 shares and the Bonus h Scripts and other shares attached thereto standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the second plaintiff; i (2) An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein; j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 145 a (3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities; b (4) An order for rectification of the Register of Shares to give effect to any judgment delivered herein.” The appellant filed an amended statement of defence and a c counter-claim. For the present purpose, it is sufficient to state that the counter claim was as follows:– “46. Whereupon the defendant by way of counter-claim claims against the second plaintiff the sum of N730,000 being d money advanced to the second plaintiff or to his order at his request. 47. The defendant also claims interest thereon at the rate of 15% per annum from the 15th day of May, 1986 until payment.” e Subsequently, the second respondent alone, Dr. Olusola Saraki, instituted another action, Suit No. LD/938/97, in the same court against the appellant and, according to the f amended statement of claim, the claim was as follows:– “(1) A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in g trust for the plaintiff. (2) An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein. h (3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. i (4) An order for rectification of the Register of Shares to give effect to any judgment delivered herein. (5) An order for the refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plaintiffs j behalf.” [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 146 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The second amended statement of defence filed by the ap- a pellant contained a counter-claim as follows:– “(i) A declaration that of the 6,876,840 shares standing in the name of the plaintiff in the Register of Members of Societe b Generale Bank Nigeria Limited 2,783,483 thereof are not held by the plaintiff beneficially but upon trust for the plaintiff and the defendant for disposal as they shall both agree to deserving Nigerians of their choice. c (ii) An injunction restraining the plaintiff from dealing with the said shares as if he were sole beneficial owner.” The two suits were consolidated and hearing had come and had gone on for some years before the appellant, at a certain d stage, filed an application which was based on section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991 that was promulgated in June, 1991, for an order:– “Striking out the consolidated suits herein on the ground that this e Honourable Court has no jurisdiction to continue to entertain same and or allow the proceedings to be maintained against the defendant/applicant.” In order to enable one to fully understand the issues in- f volved, it is necessary to set out the provisions of section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991. The provisions are as follows:– g “11. Notwithstanding anything contained in any law or in any contract or instrument, no such or other proceeding shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the shares vests in any person other than the registered holder. h Provided that nothing in this section shall, bar a suit or other proceedings on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on behalf of the minor or person suf- i fering from mental illness.” The learned trial Judge, after consideration of the evidence before him and the submissions of the learned Counsel for each party, dismissed the application. He held that the j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 147 a provisions of section 11 of the Decree appeared to be capable of being interpreted in two ways and that the question whether the appellant held the shares in question in trust for b both or one of the respondents was yet to be determined. On the whole, he stated, inter alia, as follows:– “If section 11 had been unambiguous, I can only take the intention of the lawmaker from the words they have used in the provision. c In the face of two possible constructions it is the duty of the court not only to avoid unreasonable, artificial or anomalous construction but to adopt the more reasonable construction and hold that section 11 is intended to protect the title or the legal title of a registered shareholder in the bank. It is not in dispute as far as the d claims go that the titles to the shares held by the defendant in S.G.B.N. vest in him. I do not find that section 11 bars this suit or other proceeding based on the claim in the first four paragraphs of the consolidated suits from being maintained against the defen- e dant. The question of whether or not there is a trust concerning the shares in the name of the defendant in S.G.B.N. is far from being determined and cannot be until the whole evidence is taken.” Dissatisfied with the ruling of the learned trial Judge, the f appellant appealed to the Court of Appeal which dismissed the appeal. The only issue for determination in this case formulated by the learned Counsel for the respondents was as follows:– g “Whether the claims contained in the statement of claim in this action can, strictly be regarded, be (sic) described or categorised as a claim by the plaintiff or either of them that the title to the shares registered in the name of the defendant vests in them or either of h them rather than in the said defendant.” The court below pointed out that the issue before it was the correct interpretation of section 11 of the Banks and Other Financial Institutions Decree 1991, No. 25 of 1991, and i applying the said interpretation to the claims in this case so as to determine whether the learned trial Judge had jurisdiction to deal with the case or not. It also pointed out that the provision was a provision that ousted the jurisdiction of the j court to entertain certain matters in regard to shares in a [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 148 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. bank and that for that reason the provision should be con- a strued strictly. The court below then went on:– “Thus, if any person brings an action in any court to say that title of the shares in a bank registered in A’s name does not vest in A b but in B, the jurisdiction of the court is ousted from entertaining such action. The registration of the shares of a bank in the name of person is absolute as to the person in whom the title to the shares vests. The Decree is clear on this and gives no room for argument or speculation. The only issue in this case is whether A in whose c name the shares are registered can hold the same in trust for a third party (B). The Decree is silent on this. In interpreting a statute a court does not import into it what it did not say. The Decree talks of title or a person registered as holder. It does not talk about bene- d ficial interest in the said shares or whether the person in whom the title vests can or cannot hold the shares in trust for another person. The present suit does not challenge or deny that the appellant is [the] registered holder of the shares in question or that the shares are vested in him. No. What I understand him to be saying is – I e concede that the shares are vested in you but you hold it (sic) in trust for me. It is my respectful view that to that extent the jurisdiction of the court is not ousted as the respondents are not seeking to maintain a suit or proceeding against the appellant that the title f to the shares is not vested in him. I therefore hold that the court below has jurisdiction to continue the consolidated suits which is [the] subject of this appeal.”

Dissatisfied with the judgment of the court below, the appel- g lant has lodged a further appeal to this Court. The parties have, in accordance with the rules of this Court, duly filed and exchanged briefs. The appellant filed the appellant’s brief which was amended with the leave of this Court. The h respondents filed a respondents’ brief and the appellant filed a reply brief. The five issues for determination formulated in the appellant’s brief are as follows:– “1. Was the issue which the Court of Appeal formulated and i decided the proper issue that arose for determination before it? 2. Did the refusal by the Court of Appeal to consider the eight issues formulated by the defendant/appellant as arising from his Grounds of Appeal constitute a denial of fair hearing? j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 149 a 3. Was not the learned trial Judge obliged to accede to the defendant’s prayer on the application having regard to the fact that the plaintiff who had accepted the defendant’s main contention on the effect of section 11 of the Decree b had been unable to sustain the only other proposition which they had advanced in response to the defendant’s argument? 4. Does the proviso to section 11 create ambiguity or alter or affect the meaning of section 11 in anyway? c 5. Did not what the learned trial Judge said amount to accepting the case made by the defendant?” The respondents formulated only one issue for determination d in their brief. In their view, the question for determination in this appeal as in the courts below involved a decision as to whether Decree No. 25 had effectively put an end to the rights of a beneficiary under a trust where the property subject to the trust are shares in a bank. Some of the questions e raised in this appeal can be dealt with straightaway in that they are covered by well-established legal authorities. One is that when an objection is taken that a court has no jurisdiction to hear or to continue the hearing of a suit, only the f averments in the statement of claim of the plaintiff are relevant for the determination of the question (see Adeyemi v. Opeyori (1976) 9–10 S.C. 31). The other is that an objection that a court has no jurisdiction to entertain a matter or an g action is very fundamental. It can be raised at any stage of the proceedings in the High Court, Court of Appeal and in this Court by the parties or by the court (see Oloriode v. Oyebi (1984) 1 S.C.N.L.R. 390; (1984) 5 S.C. 1; and Oloba h v. Akereja (1988) 3 N.W.L.R. (Part 84) 508). So, there was nothing wrong with the consideration of it by the court below especially when, in this case, the determination of the question was a main or vital issue. i The learned Senior Counsel for the appellant, in relation to the question raised under the third issue, referred to the statement made by the learned Counsel for the respondents, Mr Ladi Williams, when he was making submissions in j the court of trial, and the learned senior Counsel for the [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 150 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. appellant submitted that the learned trial Judge and the court a below should have granted the appellant’s prayer in his application as the respondents who had accepted the appellant’s main contention on the effect of section 11 of the b Decree were unable to sustain the only proposition which they advanced in response to the appellant’s argument. The alleged submissions of Mr Ladi Williams, which were not disputed during the proceedings before us, may be classified c into two paragraphs as follows:– “The first point I propose to urge on the court is that we are not and do not want to be misunderstood that we are challenging the fact that the defendant is registered as the owner of the shares in S.G.B.N. We concede to the point. We also say that the title to the d shares are in the defendant’s name. A close perusal of section 11 shows that what the section is talking about is maintaining proceedings or suit against the holder of the shares i.e. in whom the shares vest. In other words, we cannot e maintain a suit or proceeding on the ground that the title to the said shares vests in us. What we are saying is that, this is not to be interpreted to mean where you have a cestui qui trust or beneficiary claiming under a trust, such beneficiary cannot direct the person in whom title vests how to deal with the shares and dividends at- f tached thereto.” It was further submitted by the learned senior Counsel for the appellant that the point on which the parties to this suit disagreed was clearly set out in the last sentence in the sub- g missions of Mr Ladi Williams in the second paragraph above. In the case of the respondents, the submissions made for h them was that the question for this Court to determine was whether the claims contained in the statement of claim in this action (or any of them) could strictly be regarded, described or categorised as a claim by the respondents or either of them that the title to the shares registered in the name of i the appellant vested in them or either of them rather than in the said appellant. It was argued that the Decree only precluded the court from determining a dispute as to whether the title to a share vested in A (who was not the registered j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 151 a holder) or in B (who was the registered holder). It was conceded, on behalf of the appellant, that the Decree treated the fact that B was the registered holder of the shares as conclu- b sive evidence of his title thereto though the Decree in no way precluded the court from deciding a claim by A that B held the shares registered in his (B’s) name in trust for A. It was also submitted that the meaning of the relevant provi- c sions of the Decree canvassed by the respondents should be adopted because a statute should not be interpreted in a way that would enable it to be used as an instrument of fraud. In my view, the relevant question in the present connec- d tion, is whether all or any of the reliefs claimed in both consolidated suits could be regarded, described or categorised as a claim by the respondents or either of them that the title to the shares registered in the name of the appellant vested in e them or either of them rather than in the said appellant. This is the first aspect of this case which is whether all or any of the reliefs aforesaid came within the category of matters in relation to which an action could not be maintained. The f second aspect, which will be dealt with later, is whether the Decree has a retrospective effect. I have already set out above the reliefs claimed in each of the consolidated suits. If the respondents had specifically claimed that they or any of g them or any person, other than the appellant, owned the shares in question and, for that reason, they or any of them or that other person should be substituted and registered as the shareholder or shareholders, as the case might be, in place of the appellant, the situation would have been simple h and straightforward; the action could not be maintained by virtue of section 11 of the Decree. In order that the provisions of section 11 of the Decree may apply, there need not really be such a specific claim. It will be enough, whatever i way in which the claim against the registered holder of shares in a bank, is framed or presented, if the basis or the ground upon which the claim is in reality based is that the title to the shares is vested in any person other than the reg- j istered holder. Bearing the foregoing principles in mind, I [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 152 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. now proceed to examine each of the reliefs claimed by the a respondents. In doing so, I take into consideration the averments in the pleadings of the respondents in each of the consolidated suits. Also to be taken into consideration is the b fact that by being registered as a holder of shares in a company the registered holder becomes entitled to certain rights, benefits and privileges. Except as otherwise provided by the law and the provisions of the Memorandum and Articles of c Association of the company, he has the right to sell, mortgage or otherwise dispose of the shares. He is entitled to receive dividends on the shares registered in his name and to keep the dividends so received for his own use. “Dividend” d is the payment made out of profits to the shareholders of a company from time to time. In other words, the essence of being registered as owner or a holder of shares in a company is that one is, inter alia, entitled to enjoy in one’s right the foregoing rights, benefits and privileges. Where the situation e is that the person who is the registered holder of shares in a company holds the aforesaid shares in trust for another person, all the rights, benefits and privileges can no longer be for his benefit. He may not sell, mortgage or otherwise dis- f pose of the shares without the consent of the beneficiary or keep the money received as dividends for his own personal use. The aforesaid shares are in law and in fact owned, not by him personally, but by the beneficiary who, in his own g right, is entitled to demand payment to him by the trustee of all moneys received as dividends on the shares. The beneficiary may also, in a proper case, demand that the shares be sold and the purchase price be handed over to him (benefici- h ary). In the circumstance, the relief claimed in item (1) of the respondents’ claim in each of the consolidated suits for a declaration that a certain number of shares, bonus, script and other shares attached thereto standing in the name of the i appellant in the register of shareholders of the bank was held by him in trust for the respondents or alternatively for the second respondent is, prima facie, caught by the provision of section 11 of the Banks and Other Financial Institutions j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 153 a Decree No. 25 of 1991. The situation is the same in the case of the relief in item (2) of the respondents’ claim in each case of the consolidated suits, for an order directing an in- b quiry into the amount of any dividend which might have been received by the appellant as holder of the shares in question up to the date of the judgment herein. The situation is also the same in the case of the relief in item (3) of the c respondent’s claim in each of the consolidated suits for an order of injunction restraining the appellant from holding or dealing with the shares in question otherwise than as trustee for the respondents and in accordance with the lawful direction of the respondents or the appropriate authorities. The d relief claimed in item (4) of the respondents’ claim in each of the consolidated suits was clearly caught by the provisions of section 11 of the Decree. It was for an order of rectification of the register of shares to give effect to any e judgment herein. The said relief clearly showed the real intention of the respondents that what was intended was to deprive the appellant of all the rights, benefits, privileges and other things which his registration as holder of the f shares conferred on him. Section 11 of the Decree does not apply to item (5) of the respondent’s claim in Suit No. LD/938/87 for a refund of the money held by the appellant on the respondent’s behalf and items (1) and (2) of the g counter-claim in Suit No. LD/845/87 but the provision of the section applies to items (1) and (2) of the counter-claim in Suit No. LD/938/87. The legal position in the case of the reliefs set out in the items in the claims or counter-claims in h the consolidated suits, to which the provisions of section 11 of the Decree, prima facie, applies, is as if it were in fact that the title to the shares in question, which were registered in the name of the appellant, vested in the respondents or i either of them rather than in the appellant. The aforesaid claims and counter-claims in the consolidated suits could, in reality be regarded or categorised as a claim by the respondents or either of them that the title to the shares, registered j in the name of the appellant, vested in them or either of them [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 154 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. rather than in the appellant. I have already quoted above the a statement or submission credited to the learned Counsel to the respondents in the trial court, Mr Ladi Williams. If, as submitted by him, the respondents should not be misunder- b stood that they were challenging the fact that the appellant was registered as the owner of the shares in S.G.B.N. and if the respondents conceded the point and also said that the title to the shares was in the appellant and that they could c not maintain a suit or proceeding on the ground that the title to the said shares vested in him, then the aforesaid reliefs in the consolidated suits which, according to me, were, prima facie, affected by section 11 of the Decree were miscon- d ceived. The registration of the appellant as a holder of the aforesaid shares was unconditional. He was registered as a holder of the shares in his own right. A suit seeking to convert his registration as a holder of the shares in S.G.B.N. unconditionally as an absolute owner in his own right to a e holder of the shares as a trustee for the respondents or either or of them is a suit being maintained against the appellant, a person registered as the holder of the shares in question in S.G.B.N., on the ground that the title to the shares vested in f the respondents or either of them. That was, in reality, what the consolidated suits were. The question whether, since the consolidated suits were instituted in 1987, section 11 of the Decree applied to them is another matter which will be dealt g with hereunder. With reference to the contention that the implication of holding that section 11 of the Decree applied to the claims h and counter-claims mentioned above would be that shares of a bank could not be held by a registered holder in trust for a beneficiary, the relevant question is whether the provision of the section is clear on the point and I have no doubt in my mind that it is. If the law makers, in their wisdom, thought i that that was what they wanted and made specific provisions which were clear on the point, it is not the court’s duty or business to try to avoid the consequences (see Aya v. Hen- shaw (1972) 5 S.C. 87 at 95). So, what the court should do, j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 155 a in the circumstances, is to limit itself to the interpretation of the law. What the law should or should not be is outside the function of the court (see Abioye v. Yakubu (1991) 5 b N.W.L.R. (Part 190) 130). Consequently, if the law makers made it clear in the law made by them that they did not like an arrangement whereby shares of a bank are held by a registered shareholder of the shares in trust for another person c and, in order to discourage the practice, further provided, in clear terms, restrictions of legal proceedings in respect of shares purportedly held in trust for another person as had been done in section 11 of the Decree, the court will give effect to the legislation. d The next question for consideration is whether retrospective effect should be given to the provisions of section 11 of the Decree. The view of the court below was that the learned e trial Judge had jurisdiction to continue proceedings in relation to the consolidated suits which in effect meant that the provision of the section did not have retrospective effect so as to make it affect the consolidated suits instituted in 1987. The submission made for the appellant was that the effect of f the use of the word “maintained” in the provision of the section was that its operation was retrospective and it affected the consolidated suits. g The date of commencement of the Decree, as stated, in the marginal note in it, was 20th June, 1991. The date of commencement of a statute is the date that it comes into operation. In the circumstance, the date on which the Decree itself, which included section 11 thereof, came into opera- h tion was 20th June, 1991. There was nothing in the Decree to the effect that the Decree or any part or section thereof shall be deemed to have come into operation on a date earlier than the date of commencement stated in the Decree. i Also, there was no provision in the Decree that actions or proceedings on matters to which the provision of section 11 of the Decree applied, which were pending in courts on the date of commencement of the Decree, should abate or be j discontinued. If it is intended by the lawmaker that any part [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 156 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. or section of a statute should come into operation on a date a earlier than the date of commencement of the statute itself, provision to that effect will be made in clear terms. Section 33(1) of the Constitution of the Federal Republic of Nigeria, b 1989 provided that the Constitution should come into force on 1st October, 1992. It was, however, provided in section 3(2) of the Constitution of the Federal Republic of Nigeria (Promulgation) Decree 1989, No. 12 of 1989 that, notwith- c standing section 33(1) of the Constitution, where circumstances so warrant, the President might, by order, appoint a date earlier than 1st October, 1992 for the coming into force of any of the provisions of the Constitution specified in the d order. Where an issue arises upon proceedings before the court, the jurisdiction of the court to dispose of that issue can only be ousted by plain words (see Attorney-General v. Boden (1912) 1 K.B. 539). Further, statutory provisions e should not be given retrospective effect unless where it is clearly stated that they should have that effect (see Udoh v. Orthopaedic Hospital Management Board (1993) 7 N.W.L.R. (Part 304) 139). The question then is whether it f was clear from the provisions of the Decree or the provisions of section 11 thereof that the provisions of section 11 were to have retrospective effect. Those who contended that the provisions of section 11 were retrospective based their g contention on the use of the word “maintain” in the section which, according to the definition in Black’s Law Dictionary (5ed) meant, inter alia, “continue, keep in existence or continuance, sustain, keep from collapse a suit already begun”. h It, however, was also stated in the said Dictionary that to maintain an action or suit might mean to commence or institute it. Further, in Moon v. Durden 2 Ex 22, the majority decisions was that the use of the words “brought or main- i tained” was not sufficient to make the Gaming Act, 1845 have a retrospective effect. It could well be that the meaning to be given to the word “maintained” depends on the context in which the word is used. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 157 a The foregoing is not all. It was the word “maintained” that was used in section 11 of the Decree. It cannot reasonably be said that it meant “shall be brought” and at the same time b also meant “shall be continued” which are distinct and separate expressions. If it is held that the word “maintained” meant “continued” then actions commenced before the date of commencement of the Decree (20th June, 1991) will be c affected by section 11 of the Decree but those commenced before the date of commencement of the Decree (20th June, 1991) will not be affected. One the other hand, if the word “maintained” meant “shall be brought” then action instituted d on or after the date of commencement of the Decree (20th June, 1991) will be affected by the provisions of section 11 of the Decree but those instituted, like the consolidated suits, before the date of commencement of the Decree will not. The interpretation which may have the effect of making e section 11 of the Decree have a retrospective effect will be absurd as it cannot be reasonably inferred that the law makers intended that suits instituted before the date of commencement of the Decree should be affected and those f instituted after the date of commencement should not be affected. That sort of situation will be absurd. A statute is not to be construed in such a way that it will manifestly lead to absurdity (see Udoh’s case (supra)). Further, the right of g the subject to have access to the courts may be taken away or restricted by statute, but the language of any such statute will jealously be watched by the courts and will not be extended beyond its least onerous meaning unless clear words h are used to justify such extension (see Halsbury’s Laws of England (3ed) Volume 9 page 353). The conclusion to which I have come is that the provision of section 11 of the Decree applies only to suits or actions brought on or after i 20th June, 1991, which was the date of commencement of the Decree, because it does not have a retrospective effect. It is only on this ground that I hold that section 11 of the De- cree did not affect the consolidated suits which have been j instituted since 1987 before the Decree came into force. I, [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 158 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. therefore, agree, for different reasons which I have just a stated above, with the conclusion reached by my learned brother, Kutigi JSC, in the lead judgment which he has just delivered. b Consequently, I too dismiss the appeal and, for different reasons stated in this judgment, affirm the judgment of the court below. The case is remitted to the High Court of Lagos State for the proceedings therein to continue. I abide by the c order for costs in the lead judgment. OGUNDARE JSC: (Dissenting) This is a further appeal to this Court against the judgment of the Court of Appeal, Lagos Division, coram: Sulu Gambari, Tobi and Ubaezonu d JJCA. That court had dismissed the appeal to it of the defendant, N.A.B. Kotoye, against the ruling of the High Court of Lagos State, Thomas J, that his jurisdiction to continue the hearing of the plaintiffs’ suit before him had not been ousted e by section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991. The plaintiffs, Mrs F.M. Saraki and Dr. Otusola Saraki had in Suit No. LD/845/87 instituted in 1987, claimed from the f defendant as per their amended statement of claim the following reliefs:– “(1) A declaration that the 2,400,000 shares and the Bonus, Scripts and other shares attached thereto stand in the name g of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in trust for the plaintiffs (or alternatively) for the second plaintiff; (2) An order directing an inquiry into the amount of any divi- h dends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein; (3) An order of injunction restraining the defendant from hold- i ing or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities; (4) An order for rectification of the Register of shares to give effect to any judgment delivered herein.” j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 159 a The defendant in a counter-claim in return claims against the second plaintiff as per paragraphs 46 and 47 of his amended statement of defence and counter-claim, as hereunder:– b “46. Whereupon the defendant by way of counter claim claims against the second plaintiff the sum of N730,000 being money advanced to the second plaintiff or to his order at his request. 47. The defendant also claims interest thereon at the rate of c 15% per annum from the 15th day of May, 1986 until payment.” In Suit No. LD/938/87 Dr. Olusola Saraki alone claimed against the defendant N.A.B. Kotoye, as per his second d amended statement of claim, the following reliefs:– “(1) A declaration that the 4,579,460 shares standing in the name of the defendant in the Register of Shareholders of Societe Generale Bank (Nigeria) Limited is held by him in e trust for the plaintiff. (2) An order directing an inquiry into the amount of any dividends which may have been received by the defendant as holder of the aforementioned shares up to the date of the judgment herein. f (3) An order of injunction restraining the defendant from holding or dealing with the aforesaid shares otherwise than as trustee for the plaintiff and in accordance with the lawful direction of the plaintiff or the appropriate authorities. g (4) An order for rectification of the Register of Shares to give effect to any judgment delivered herein. (5) An order for the refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plain- h tiff’s behalf.” The defendant for his part counter-claimed against Dr. Saraki as per his second further amended statement of defence and counter-claim:– i “(i) A declaration that of the N6,876,840 shares standing in the name of the plaintiff in the Register of Members of Societe Generale Bank Nigeria Limited 2,783,483 thereof are not held by the plaintiff beneficially but upon trust for the plaintiff and the defendant for disposal as they shall both agree j to deserving Nigerians of their choice. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 160 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(ii) An injunction restraining the plaintiff from dealing with the a said shares as if he were sole beneficial owner.” At the close of pleadings the two suits were consolidated and proceeded to hearing. In the course of hearing the Banks b and Other Financial Institutions Decree was, in June, 1991, promulgated. Thereupon in March, 1992 the defendant filed an application praying for an order of the trial High Court:– “Striking out the consolidated suits herein on the ground that this c Honourable Court has no jurisdiction to continue to entertain same and or allow the proceedings to be maintained against the defendant/Applicant.” The application which was supported by an affidavit was d contested by the plaintiffs. In a ruling the learned trial Judge found:– “In the fact of two possible constructions, it is the duty of the court not only to avoid unreasonable artificial or anomalous construction e but to adopt the more reasonable construction and hold that section 11 is intended to protect the title or the legal title of a registered shareholder in the bank. It is not in dispute as far as the claims go that the titles to the shares held by the defendant in S.G.B.N. vest in him. I do not find that section 11 bars this suit or other proceed- f ing based on the claim in the first four paragraphs of the consolidated suits from being maintained against the defendant. The question of whether or not there is a trust concerning the shares held in the name of the defendant in S.G.B.N. is far from being determined and cannot be until the whole evidence is taken. The g learned defence Counsel had pointed out in his reply that the claim in Suit No. LD/938/87 is unaffected in any way by this motion. This is a relief for refund of the balance of certain sum allegedly held by the defendant in the plaintiff’s behalf therein. I agree with h him” (italics mine). On appeal to the Court of Appeal, that court after stating, correctly, in my respectful view, the issue before it in these words:– i “The issue before the Court is the correct interpretation of section 11 of the Banks and Other Financial Institutions Decree No. 25 of 1991 and applying the said interpretation to the claims in this case so as to determine whether the court below has the jurisdiction to continue the case or not” j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 161 a went on later in its lead judgment, per Ubaezonu JCA, to say:– “The only issue in this case is whether A in whose name the shares b are registered can hold the same in trust for a third party (B)” (italics mine). It then concluded that the trial High Court had jurisdiction to continue the consolidated suits, the subject-matter of the c appeal, and dismissed the appeal. The defendant in his further appeal to this Court filed six grounds of appeal and in his amended brief of argument set out five issues, that is to say:– d “(1) Was the issue which the Court of Appeal formulated and decided the proper issue that arose for determination before it? (2) Did the refusal by the Court of Appeal to consider the eight e issues formulated by the defendant/appellant as arising from his Grounds of Appeal constitute a denial of fair hearing? (3) Was not the learned trial Judge obliged to accede to the defendant’s prayer on the application having regard to the f fact that the plaintiffs who had accepted the defendant’s main contention on the effect of section 11 of the Decree had been unable to sustain the only other proposition which they had advanced in response to the defendant’s argument? (4) Does the proviso to section 11 create ambiguity or alter or g affect the meaning of section 11 in any way? (5) Did not what the learned trial Judge say amount to accepting the case made by the defendant?” The plaintiffs for their part set out in their brief one question h as calling for determination in this appeal and that is:– “. . . the question for determination in this appeal as in the courts below involves a decision as to whether Decree No. 25 has effectively put an end to the rights of a beneficiary under a trust where i the property subject to the trust are shares in a bank.” In my respectful view having regard to the application brought by the defendant before the trial High Court, the main question for determination in this appeal is as to j whether or not the trial court could continue with the hearing [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 162 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. of the plaintiffs’ suits before it having regard to the provi- a sions of section 11 of Decree No. 25 of 1991. As rightly pointed out by Chief Williams, S.A.N., in the b plaintiffs/respondents’ brief in determining the question posed above by him, it is the statement of claim alone that must be looked at. Chief G.O.K. Ajayi, S.A.N., conceded at the hearing of this appeal as much. I shall in the course of this judgment have regard to the penultimate paragraphs of c the plaintiffs’ pleading in the two suits. Let me begin by setting out section 11 of the Decree, the correct interpretation of which is the crux of this appeal. Section 11 provides:– d “Notwithstanding anything contained in any law or in any contract or instrument, no suit or other proceeding shall be maintained against any person registered as the holder of a share in a bank on the ground that the title to the said share vests in any person other e than the registered holder: Provided that nothing in this section shall bar a suit for other proceeding on behalf of a minor or person suffering from any mental illness on the ground that the registered holder holds the share on f behalf of the minor or person suffering from the mental illness” (italics mine).

It is the contention of the defendant, both in his brief and in g his Counsel’s submissions, that the section restricts the right of the plaintiffs of access to the court in respect of the reliefs sought in Suit No. LD/845/87 and in the first four of the reliefs sought by Dr. Saraki, the only plaintiff in Suit No. h LD/938/87, and that, therefore, the court’s jurisdiction to continue with the hearing of the consolidated suit is ousted. For the plaintiffs the main submission is that, although the Decree bars access to the court by a person who challenges the registered holder of a share in a bank on the ground that i the title to the said share vests in someone else than the registered owner, it does not preclude a beneficiary in a trust where the property subject to the trust are shares in a bank, from suing the trustee. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 163 a I have given careful consideration to the submissions made on behalf of the parties by their respective leading Counsel. The issue here relates to the correct interpretation of a Stat- b ute that restricts the citizen’s right of access to the courts. At the stage at which the defendant brought his motion, the duty before the trial High Court was to determine whether or not its jurisdiction has been ousted by section 11 of the c Decree. The principle that has been settled in a long line of cases in this country and other common-law jurisdictions is well set out in the words of Nnaemeka-Agu JSC in Nwosu v. Imo State Environmental Authority and others (1990) All N.L.R. 379 at 396; (1990) 2 N.W.L.R. (Part 135) 688:– d “The court had to be guided by the principle that every superior court of record guards its jurisdiction jealously. So, while a person’s access to have his civil right adjudicated upon by a court may be restricted or ousted by statute, the language of such a stat- e ute must be construed strictly. But once, with such an approach, it is clear that an ouster or restriction of the jurisdiction was intended and that, from the facts of the particular case, it comes squarely within the four corners of the statute, the court has no alternative f but to hold that its jurisdiction has been ousted. For, while a statute may provide that the jurisdiction of a court has been ousted with respect to a particular cause, the court always has the jurisdiction to inquire whether on the facts and circumstances of the particular cause, its jurisdiction has in fact been ousted or restricted: See on g this Wilkinson v. Banking Corporation (1948) 1 K.B. 721 at page 725 C.A.” Bearing this principle in mind, I shall now examine the claims before us to determine whether or not they are caught h by the provisions of section 11. In Suit LD/845/87 the plaintiffs pleaded, inter alia, thus:– “1. At all times material to this action each of the plaintiffs and i the defendant are persons registered as shareholders in the Societe Generale Bank (Nigeria) Limited (which is hereinafter referred to as ‘the bank’) In addition the defendant was the chairman of the bank. 2. The defendant was a very close friend of the second plain- j tiff and his (second plaintiff’s) wife, who is the first [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 164 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

plaintiff and both plaintiffs regarded and treated him (de- a fendant) as a person worthy of their trust and confidence. 3. The first chairman of the bank was the second plaintiff but he vacated that office on his election to the Senate of the b National Assembly and nominated the defendant to succeed him. 4. In or around 1984 the Nigerian Enterprises Promotion Board warned the bank that unless the Nigerian shareholders paid up their 60% shares in the bank’s equity, the bank c would be sealed up. At that time the number of shares allotted but yet unpaid for and held in the name of the defendant was 960,000 whilst that similarly held by the second plaintiff was 2,240,000. The total sum of money required to pay d for the shares was thus N3,200,000 at the rate of N1 per share. 5. The second plaintiff, although he was detained in prison by the military authorities, managed to arrange for the necessary funds to be made available. The total sum so made e available was N4,000,000 and out of this sum payment was made for the N960,000 worth of shares in the name of the defendant and N2,240,000 worth of shares for the second plaintiff. f 6(1) In view of the fact that the second plaintiff was in detention at the material time, the defendant advised that the 2,240,000 shares be registered in the name of the first plaintiff and they were so registered. (2) Acting on the advice of the defendant, the first plaintiff g executed two deeds of transfer (in duplicate) which were presented to her by the defendant in 1985 in each of which the following were left blank:– (a) the amount of the price or consideration for the transfer, h (b) the name and address of the Transferee; (c) the date of execution of the transfer, (d) the signature of the Transferee; and i (e) the name, signature and address of the witness to the signature of the Transferee. (3) It was the understanding of both the first plaintiff and the defendant that at the appropriate time, the name of the second plaintiff will be inserted as Transferee. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 165 a 7. As a result of the use of the money made available to the defendant by the second plaintiff the defendant was able to pay for:– b (a) 1,164,800 shares of N1 each for which share certificate No. 000025 dated 28/12/84 was issued to her, and (b) 1,075,200 shares of N1 each for which share certificate No. 000027 dated 31/12/84 was issued to her. c 8(1) After signing the blank transfers relating to the said shares, the said transfers signed by the first plaintiff were handed over to the defendant for safe custody. 9. Differences have arisen between the plaintiffs and the defendant, and these differences eventually resulted in the d resignation of the first plaintiff and two other Nigerian directors of the Board of the bank on 25th September, 1986. 10. At all times material to the aforesaid Board meeting of 25/9/86 and since that date, the defendant was not on speak- e ing terms with the plaintiffs. 11. Acting without the authority of the plaintiffs or either of them and in breach of the confidence reposed in him and also in breach of his fiduciary duties as agent or trustee of the first plaintiff, the defendant fraudulently; f (i) and falsely inserted N1,075,200 in words as the amount of the price or consideration paid to the first plaintiff in two or at least one of the blank transfers kept with him and falsely inserted N1,164,000 in g words as the amount of the price or consideration paid to the first plaintiff in the remaining two or at least one other of the said blank transfers; (ii) entered his name and address on each of the blank h instruments of transfer or on at least two of them as the Transferee; (iii) and falsely inserted the 25th September, 1986 as the date when the instruments of transfer were signed sealed and delivered; i (iv) inserted his signature where the Transferee should sign; and (v) inserted the name, signature and address of one Ade- bayo Olawoyin as witness to his signature as Trans- j feree. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 166 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

12(A) The price which the defendant inserted in the transfer forms a was calculated at or below per [sic] value when the said shares were at all material times and to the knowledge of the defendant, worth more than par value and was certainly not worth below par. b 13. By reason of the matters hereinbefore pleaded, the defendant is accountable to the plaintiffs (or alternatively the second plaintiff) as a trustee de son tort or as trustee or agent of the said plaintiff of the aforesaid shares.” c What these averments amount to is that the 2,240,000 shares in dispute in that suit belonged in fact to the second plaintiff who provided the money for their purchase but that the defendant fraudulently converted the said shares to himself d and got himself registered as the owner of the said shares. This to my mind is a clear challenge to the defendant’s ownership of the said shares. I have examined the provisions of section 11 very care- e fully. True enough because it seeks to restrict the citizen’s right of access to the court, its provisions must be construed narrowly and strictly. But, as Nnaemeka-Agu JSC explained at pages 405–406 of the report in Nwosu’s case (supra), this f does not mean that the section is to be interpreted capriciously. Nnaemeka-Agu said, and I agree entirely with him:– “I must advise myself that to construe a statute narrowly and g strictly does not mean that the court should arbitrarily, in appropriate metaphor, wring a false meaning out of the language of the statute. Rather as applied to statutes generally, it means that the court should give a fair and natural interpretation to the statutory h language as applied to the facts of the particular case and, not straining the meaning of the words unnecessarily but guided by certain principles, arrive at a reasonable construction. See Dyke v. Elliott, The Gauntlet (1872) L.R. 4 P.C. 184. Certain principles guide the court in such an exercise. If there should be any doubt, i gap duplicity or ambiguity as to the meaning of the words used in the enactment, it should be resolved in favour of the person who would be liable to the penalty or a deprivation of his right: See London and County Commercial Properties Investments Limited v. Attorney-General (1953) 1 All E.R. 436 at pages 441–442. If there j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 167 a is a reasonable construction which will avoid the penalty in any particular case the court will adopt that construction. Tuck and Sons v. Priestre (1887) 19 Q.B.D. 629 at page 638. If there is any doubt as to whether the person to be penalised or to suffer a loss of b the right comes fairly and squarely within the plain words of the enactment, he should have the benefit of that doubt; I.R.C. v. Duke of Westminster (1936) A.C. 1 at page 19. See on these Maxwell: On Interpretation of Statutes (12th Edition) page 239. If after the c above approach and the application of the above principles the person to be affected comes squarely and fairly within and is affected by the words of the statute the court has no alternative but to apply it.” d It has been argued that the plaintiffs are not challenging the fact that the defendant is the registered owner of the shares; what they say is that he is a trustee in respect of the shares whilst they, particularly the second plaintiff, are the benefi- e cial owners of the shares. I see this argument rather ingenious. An examination of the claims and their pleadings will show clearly that what they set out to achieve is exactly what is covered by section 11. Whether the defendant is a f trustee-de-son tort (or constructive trustee as such a person is usually called), or trustee or agent of the second plaintiff in respect of the shares in dispute, see paragraph 12 of the amended statement of claim, the substance of the plaintiffs’ g case is to the effect that the defendant, although a registered holder, is merely a notional or nominal owner of the shares while the second plaintiff is the true owner. It therefore cannot be said that the plaintiffs are not disputing the title of the defendant, the registered holder of the shares in dispute, h to the said shares on the ground that the shares truly belong to the second plaintiff. Claim (1) seeks a declaration which, if granted, will hold out the plaintiffs or alternatively the second plaintiff as the true owner of the shares as against the i defendant who is a registered holder of the said shares. The view I hold is more reinforced, in my respectful view, by claims 2, 3 and 4 which seek to vest the benefits and control of these shares in the plaintiffs or alternatively the second j plaintiff, thus making the defendant a mere notional owner [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 168 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. and the second plaintiff the substantive owner. Section 11, in a my respectful view, is aimed against such a suit. In interpreting it, one cannot overlook the opening clause which reads:– “Notwithstanding anything contained in any law or in any contract b or instrument . . .” Indeed, every word of a statute must be considered in order to determine the true purport of the statute. Regrettably in this case it would appear that Chief Williams closed his eyes c to the opening clause of section 11 in urging on us his interpretation of it. A construction which would leave without effect any part of the language of the statute will normally be rejected. d In Olatunbosun v. NISER Council (1988) 1 N.S.C.C. 1025; (1988) 3 N.W.L.R. (Part 80) 25, the expression “notwithstanding” came up for interpretation and it was there held by this Court that the expression “notwithstanding” is a term of e exclusion. In interpreting section 4 of Schedule 2 to the NISER Act No. 70 of 1977 which reads:– “4. Notwithstanding the provisions of the University of Ibadan Act, 1962, or of any statutes made there under or any provi- f sion of this Decree but subject to such directions as may be issued by the Council, any person who immediately before the date of commencement of this Decree held office under the Old Institute shall be deemed to have been transferred to the New Institute established under this Decree on terms g and conditions not less favourable than those obtaining immediately before the commencement of this Decree; and service under the Old Institute shall be deemed to be service under the Institute established under Decree for pension h purpose.” Oputa JSC delivering the lead judgment of the court in the case (with which the other Justices agreed) observed at 1038 of the report:– i “The expression ‘notwithstanding’ is a term of exclusion. As used in section 4 of Schedule 2 to Act No. 70 of 1977, it means that no provision of the University of Ibadan Act No. 37 of 1962, or any statute made under it, or any provisions of the Decree itself shall be allowed to prevail over the provisions of section 4 of j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 169 a Schedule 2 above. These other provisions shall be no impediment to the measures outlined in the said section 4 of Schedule 2. The only thing allowed to interfere with ‘deeming service in the Old Institute to have been transferred to the New Institute’ is ‘such b directions as may be issued to the Council’ – the New N.I.S.E.R./ Council.” Applying this interpretation to the opening clause of section 11, it is my respectful view, and I so hold, that trusts, includ- c ing the rights of beneficial owners or cestui qui trust, are within the exclusion envisaged by that clause. This is made clear by the nature of a trust. The learned authors of Snell’s Principles of Equity (27ed) state thus at pages 87–88:– d “1. Problems of Definition (a) ‘Trust’. No one has yet succeeded in an entirely satisfactory definition of a trust. In Underhill’s Law of Trusts a trust is defined as ‘an equitable obligation, binding a e person (who is called a trustee) to deal with property over which he has control (which is called the trust property), for the benefit of persons (who are called the beneficiaries or cestui qui trust), of whom he may himself be one, and any one of whom may enforce the obli- f gation. But this is not altogether satisfactory, for it is not wide enough to cover trusts for purposes rather than persons. Trusts of charitable purposes (e.g., for the repairs of a church or the prevention of cruelty to animals) may g lack human beneficiaries who can enforce them. Perhaps the most satisfactory definition is Professor Keeton’s: ‘A trust is the relationship which arises wherever a person called the trustee is compelled in equity to hold property, whether real or personal, and whether by h legal or equitable title, for the benefit of some persons (of whom he may be one and who are termed cestui qui trust) or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the i trustee, but to the beneficiaries or other objects of the trust’. (b) Nature. Difficult, however, though it may be to give a simple yet satisfactory definition of a trust, it is easy enough to grasp the general idea of it, which is that one j person in whom property is vested is compelled in equity [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 170 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

to hold the property for the benefit of another person, or a for some purposes other than his own. Thus it has been said, somewhat broadly, that ‘all that is necessary to establish the relation of trustee and cestui qui trust is to prove that the legal title was in the plaintiff and the equi- b table title in the defendant’. It is not, however, always accurate to say that the trustee is the legal owner while the cestui qui trust is the equitable owner, for the interest of the trustee may be (and often is) equitable only, as c where a beneficiary under a settlement himself makes a settlement of his interest while the legal ownership is still at the hands of the trustees of the former settlement, or for some other reason the legal estate is outstanding. It is therefore better to say that the trustee is the nominal d owner of the property, while the cestui qui trust is the beneficial owner.” Chief Williams, for the plaintiffs, had argued in his brief thus:– e “The case for the plaintiffs: The Decree, in plain terms, prohibits the maintenance of certain suits or other proceedings. The class of suits or proceedings affected are, in the exact words of the enactment:– f ‘Suit or other proceeding against any person . . . registered as the holder of a share in a bank on the ground that the title to the said share vests in any person other than the registered holder’. g To put the point very shortly, the Decree only precludes the court from determining a dispute as to whether title to a share vests in A (who is not the registered holder) or in B (who is the registered holder). This is because the Decree, in effect, treats the fact that B is the registered holder of the shares as conclusive evidence of the h title thereto. But the Decree in no way precludes the court from deciding a claim by A that B holds the shares registered in his (B’s) name in trust for A. This is because, on a true analysis, it cannot be said that in such a case A would be questioning the title i of B to the shares on the ground that title is vested in someone other than B. What A would be saying is:– ‘I do not dispute that title to shares are vested in B who is the registered holder thereof. But I ask the court to declare that he holds those shares in trust for me’. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 171 a The fact that the Decree ought to be given this meaning is reinforced by the fact that it is a well established rule of construction that a statute should not be interpreted in a way that will enable it to be used as instrument of fraud. The meaning urged upon the b court by the appellant would be tantamount to saying that where, before the enactment came into force B has agreed to and accepted to hold shares in a bank in trust for A, he is, by the enactment, authorised to treat those shares as his own beneficial property and c keep dividends accruing therefrom for his own use. This is patently absurd that such a construction ought to be rejected. In this case the facts pleaded in the statement of claim are such that it would be highly scandalous to suggest that, if those facts are established, the defendant would be entitled to convert to his own d use all shares bought with plaintiff’s money which he (defendant) had agreed to hold on trust for the plaintiff. It is well established that in construing or interpreting a statute one must avoid a meaning which results in taking away private rights of property without compensation. On the facts of this case the appellant’s contention e is that the enactment enables Kotoye to take the beneficial rights of Saraki for his (Kotoye’s) benefit without having to pay a kobo for the bonanza.” Although this argument seems to find favour with some of f my brethren, I must, with profound respect, disagree. I think there should be no room for sentiments in a matter concerning interpretation of statute. What the court should be concerned with is the meaning and intention of the legislation to g be gathered from the plain and unambiguous expression used therein rather than from any notions which may be entertained as to what is just or expedient. As Sir Foster Sutton FCA put it in Ahmed v. Kassim (1958) S.C.N.L.R. h 28; (1958) N.S.C.C. 11, 12. “It seems to me beyond argument that the words: ‘nor shall any such order be made, at any time after the expiration of one month from the publication of the result of the election of the member of i the House of Assembly to which the petition relates, are clear and unequivocal, capable of only one meaning; that held by the learned trial Judge. In other words, they mean what they say, that no order shall be made after the stipulated period’. The underlying principle is that the meaning and intention of j legislation must be collected from the plain and unambiguous [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 172 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

expressions used therein rather than from any notions which may a be entertained as to what is just or expedient. That the legislative authority intended the result stated seems perfectly clear if regard be had to the fact that regulation 142(2) of the b above mentioned regulations expressly applies the Supreme Court (Election Petitions) Rules of Court, 1951, Rule 4(1) of which requires an intending petitioner to apply by motion ex parte for an order as to the amount of security to be given by him, before he presents his election petition, and to avoid any delay in the hearing c of the motion. Sub-rule (2) of the same rule provides that any such application shall in respect of the right to priority of hearing by the Court, enjoy (save as prescribed in section 234 of the Customs Ordinance) precedence over all other proceedings, whether civil or criminal, and whether part heard or not.” d And in Oso Aya and another v. Emmanuel Daniel Henshaw and another (1972)1 All N.L.R. (Part 2) 25 at 30, Lewis JSC, delivering the judgment of this Court stated:– e “Moreover when there is statutory provision it should, as we have often said, be given its ordinary natural grammatical meaning and here we do not see on that basis any justification for importing into the words contained in Order 56 Rule 16 any limiting words that the Judge on appeal may only exercise his discretion with the con- f sent of the parties. Where there is specific statutory provision it is certainly not the duty of any court to try to avoid its consequences and interpret it in such a manner as to fit it into English practice if it is in fact differently and clearly expressed, as to our mind Order 56 Rule 16 is.” g As argued by Chief Ajayi, learned leading Counsel for the defendant, and rightly in my respectful view, section 11 only takes away a remedy but does not destroy the right. And this h is not unusual legislation for that matter. Statutes of Limita- tions are examples of such legislations. Another example is the Solicitors Act. Construing section 26 of the Act (6 and 7 Vict. c.73) Lord Romilly MR In Re Jones 9 L.R. Eq. 63–67 i said:– “It is to be observed that the clause of the statute, being a penal enactment, must be construed strictly. It does not apply to convey- ancing, or to common law business. The question is whether the want of the certificate puts an end to the debt, or only takes away j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 173 a the remedy. The distinction between destroying a debt and taking away a remedy is a familiar one, as in the case of the Statute of Limitations, where there is no means of recovering a debt after six years, and yet the debt is not extinguished. I am of opinion that in b this case the debt is still subsisting, although the solicitor can take no steps to enforce its payment.” In Re Jones, the client had taken out an order for taxation of his solicitor’s bill of costs, with the usual submission to pay c what should be found due, and the taxing master had disallowed certain items for business done while the solicitor’s certificate had not been renewed, it was held that the solicitor was entitled to be allowed the item in question since it d was the client that took out the order for taxation and not the solicitor and as the debt for costs in respect of business done while uncertificated, was not extinguished, but only the solicitor’s remedy, Lord Romilly cited with approval the e dicta of Willes J in Fullalore v. Parker 31 L.J. (C.P.) 239 at 240 thus:– “If the attorney is really uncertificated he is not entitled to recover any costs; nor is the plaintiff entitled to recover such costs from f the defendant, except in this case only if the plaintiff has made advances to the attorney, he cannot recover them back upon a condictio indebiti, as for money paid under a mistake; the attorney, though uncertificated, is entitled to retain the money so advanced, and the plaintiff would have a right to recover this amount from g the defendant” and Byles J:– “The objection has not been removed that part of this money may h have been paid by the plaintiff to his attorney, in which case it cannot be recovered back, and the plaintiff would be entitled to have it repaid by the defendant.” Lord Romilly concluded at 268 thus:– i “I am of opinion that the debt was still due, and that the Act does not take away the right of the solicitor either to set off the debt, or to apply to its discharge money which was already in his hands, and the result is, that the bill must go back to the Taxing Master, with a direction that he is to tax the items which he disallowed by j reason of the solicitor not being certificated.” [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 174 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In my respectful view, therefore, section 11 of the Banks a and Other Financial Institutions Decree is in the same category of such legislations where a person’s right is not extinguished but only his remedy. Thus, in the case of a trust in b respect of shares in a bank, while a beneficiary’s rights are preserved, his remedy of access to the court is taken away by the section. From the nature of trusts as discussed above coupled with the exclusion clause in section 11, if inter- c preted as dictated by rules of construction the conclusion is inescapable that the section covers the kind of plaintiffs’ claims (1)–(4) in the consolidated suits. It must always be borne in mind that the rule of construc- d tion is that words, phrases and sentences are to be construed in their ordinary and natural meaning. The duty of the court is to expound the law as it stands, and to “leave the remedy (if one be resolved upon)” to others (per Lord Birkenhead e LC in Sutters v. Briggs (1922) 1 A.C. 1 at 8). Where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise. “The desirability or the undesirability of one conclusion as compared with an- f other cannot furnish a guide in reaching a decision” per Lord Morris of Borth-y-Crest in Shop and Store Developments Ltd v. I.R.C. (1967) 1 A.C. 472 at 493. It was held in Cartledge v. E. Jophing and Sons Ltd (1963) A.C. 758, and I g agree with it, that where, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the legislature, it must be enforced however, harsh or absurd or contrary to common sense the result may be. h Examples of literal construction are given in Maxwell on Interpretation of Statutes (12ed) at page 29 et seq. At page 29 the following passage appears:– “It was repeatedly decided at law that the statutes of limitation i which enacted that actions should not be brought after the lapse of certain periods of time from the accrual of the cause of action barred actions brought after the time so limited, even though the cause of action was not discovered, nor was practicably discover- able, by the injured party at the date of accrual, and even though it j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 175 a was fraudulently concealed by the wrongdoer until the expiry of the statutory period. The hardship of such decisions was obvious, but the language was susceptible of no other interpretation.” b There are limitations to the competence of a Judge to modify the language of an Act in order to bring it into accordance with his own views as to what is right or reasonable. The maxim is: Boni judicis est dicere, non jus dare. As Willes J c put it in Abel v. Gee (1871) L.R. 6 C.P. 365 at 371:– “No doubt the general rule is that the language of an Act of Par- liament is to be read according to its ordinary grammatical construction, unless so reading it would entail some absurdity, d repugnancy, or injustice. One recognises that rule where the re- pugnance arises between the words of the section to be construed and those of some other section in the same Act or in some other Act which is in pari materia with it. But I utterly repudiate the notion that it is competent to a Judge to modify the language of an e Act of Parliament in order to bring it in accordance with his views as to what is right or reasonable. No such duty is imposed upon him.” In Young and Co v. Mayor. etc. of Leamington (1882) 8 f Q.B.D. 579; (1883) 8 App. Cas. 517, section 174 of the Public Health Act, 1875 required contracts entered into by a sanitary authority for a sum over £50 to be under seal. The plaintiff executed works approved by the defendants under g the supervision of their engineer, and under a contract in writing with the engineer which was not sealed by the corporation. The Court of Appeal in England held that the defendants were not bound by the contract, although they had h had the benefit of it, on the ground that to hold otherwise would be to repeal the enactment. Lindley LJ observed at 585 of the first report:– “The last point argued for the plaintiffs was, that as the contract i has been performed and the defendants have the benefit of the plaintiffs’ work, labour and materials, the defendants are, at all events, liable to pay for these at a fair price. In support of this contention, cases were cited to show that corpo- rations are liable at common law, quasi ex contractu, to pay for j work ordered by their agents and done under their authority. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 176 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The cases on this subject are very numerous and conflicting and a they require review and authoritative exposition by a Court of Ap- peal. But in my opinion, the question thus raised does not require decision in the present case. We have here to construe and apply an Act of Parliament. The Act draws a line between contract; for b more than 50£, and contracts for 50£, and under, contracts for not more than 50£, need not be sealed and can be enforced whether executed or not, and without reference to the question whether they could be enforced at common law by reason of their trivial c nature. But contracts for more than 50£, are positively required to be under seal, and in a case like that before us, if we were to hold the defendants liable to pay for what has been done under the contract we should in effect be repealing the Act of Parliament and depriving the ratepayers of that protection which Parliament in- d tended to secure for them. Frend v. Bennett is an authority in support of this view, and was in my opinion rightly decided. The additional works there in question had been executed, and there was the common count for work and labour and materials, as well as a special count on the alleged contract, but the defendant was e held not liable either at law or in equity. It may be said that this is a hard and narrow view of the law: but my answer is that Parliament has thought it expedient to require this view to be taken, and it is not for this or any other Court to f decline to give effect to a clearly expressed statute, because it may lead to apparent hardship.” And in Coxhead v. Mullis (1878) 3 C.P.D. 439, the defendant, during his infancy, promised to marry the plaintiff, and g after coming of age, recognised without expressly repeating the promise, and eventually broke it. The Infants Relief Act, 1874 section 2 came up for consideration. The section read:– “No action shall be brought whereby to charge any person upon h . . . any ratification made after full age of any promise or contract made during infancy . . .” It was held that the section applied to promise of marriage and the plaintiff was non-suited. On appeal, the order of non i suit was upheld. Lord Coleridge CJ observed at 441–443:– “It is admitted in this case that, if the Act does not apply, there is abundant evidence to fix the defendant, supposing he had been sued under the old law; therefore the question simply arises upon j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 177 a the recent statute. Now, the Act consists of two sections only. The first enacts that ‘all contracts, whether by specialty or by simple contract, henceforth entered into by infants for the repayment of money lent or to be lent, or for goods supplied or to be supplied b (other than contracts for necessaries), and all accounts stated with infants, shall be absolutely void’. Then the second section enacts that ‘no action shall be brought whereby to charge any person upon any promise made after full age to pay any debt contracted c during infancy, or upon any ratification made after full age of any promise or contract made during infancy, whether there shall or shall not be any new consideration for such promise or ratification after full age’. The question is whether that does or does not apply to a case of breach of promise of marriage. The words of the d second section, I think, are quite sufficient to include such a promise. The argument was, that, as regards to first section, it is entirely confined to contracts entered into for the repayment of money and goods supplied or to be supplied; and that the first part of the second section confines itself entirely to promises made after full e age to pay a debt contracted during infancy; and it is suggested that we ought to read the second part of the second section as if it ran thus: ‘or upon any ratification made after full age of any promise or contract made during infancy’. f I believe this is the first time this section has had to be considered with reference to this matter. I should have gladly deferred to any judicial authority which could have been presented as throwing light upon the subject, but, in the absence of such authority, the tendency of my own mind, right or wrong, always is to suppose g that Parliament meant what Parliament has clearly said and not to limit plain words in an Act of Parliament by consideration of policy, if it be policy, as to which minds may differ, and as to which decisions may vary. We may thus make that which is plain and h simple enactment, I will not say inoperative, but doubtful or ob- scure, if considerations are to be introduced into the construction of it, when it is entirely uncertain whether they were present to the minds of the legislature when the enactment was made. Looking at this section, I find the words change their form, and I cannot ac- i cede to the argument of the plaintiff’s Counsel, without putting a word into the statute, viz, ‘such’, which Parliament has deliber- ately left out, and which I am not to assume that Parliament has carelessly left out, meaning that the Judge should supply it. There- fore, upon the best consideration I can give to the matter, I think j this Act of Parliament does apply to breaches of promise of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 178 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

marriage. It certainly is a matter which in my judgment comes a within the fair contemplation of the law with regard to infants. I see nothing to limit the words of the Act, and I hold, therefore, that the defendant is entitled to succeed.” b I agree entirely with the views expressed by these eminent Judges on the duty of a Judge and the limits placed on him in the exercise of his interpretative jurisdiction of a legislation where the words of the statute are clear and free from c ambiguity as in the case with section 11 of the Decree under consideration in this appeal. It is suggested that a statute is not to be interpreted in a d way that will enable it to be used as an instrument of fraud. It is my view that this canon of construction does not apply here where there is no ambiguity in section 11 – and this is generally accepted by both parties. e The conclusion I reach is that section 11 applies to bar plaintiffs from maintaining claims (1)–(4) in each of their suits. I need point out also that the same conclusion is reached in respect of similar claims in the defendant’s f counter-claims. If there are any lingering doubts as to the extent of the extension clause in section 11, such doubts, in my view, are g cleared by the proviso which exempt from the prohibition or restriction in the main enactment trusts where a minor or a person suffering from any mental illness is a beneficiary. That the proviso can be resorted to in aid of interpretation of h the main enactment is supported by authorities. In Nabhan v. Nahhan (1967) All N.L.R. 51 at 59 (reprint), Brett JSC delivering the judgment of this Court had this to say:– “In deciding this question the cardinal rule is to look first at the i wording of the statute which is being construed, and if that is found to be unambiguous it is neither necessary nor permissible to look further. If section 117(2)(a) of the Constitution stood alone the court would have to construe the words ‘final decisions’ simply by ascertaining the meaning commonly given to those words j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 179 a in relation to appeals. But the subsection must be read as a whole, and paragraph (iv) of the proviso must be considered:– ‘Provided that nothing in paragraph (a) of this sub-section b shall confer any right of appeal:– (iv) in the case of a party to proceedings for dissolution or nullity of marriage who, having had time and opportunity to appeal from any decree nisi in such proceedings, c has not so appealed, from any decree absolute founded on such decree nisi.’ A proviso admittedly cannot alter the plain meaning of the substantive enactment: Anya and Others v. The State (1965) N.M.L.R. d 62; but where words are reasonably susceptible of more than one meaning a proviso may show which meaning they were intended to bear” (italics mine). I need also refer to the speech of Lord Herschell in Western e Derby Union v. Metropolitan Life Assurance Society (1897) A.C. 647 at 655–656 – a case cited by Chief Williams in his brief where the learned and noble Lord said, inter alia:– “I decline to read into any enactment words which are not to be f found there, and which would alter its operative effect because of provisions to be found in any proviso. Of course a proviso may be used to guide you in the selection of one or other of two possible constructions of the words to be found in the enactment, and show g when there is doubt about its scope, when it may reasonably admit of doubt as to its having this scope or that which is the proper view to take of it; but to find it an enacting provision which enables something to be done which is not to be found in the enactment itself on any reasonable construction of it, simply because h otherwise the proviso would be meaningless and senseless, would, as I have said, be in the highest degree dangerous” (italics mine). In Jennings v. Kelly (1939) 4 All E.R. 464 at 470, Viscount Maugham observed as follows:– i “In coming to his conclusion, Andrews, L.C.J., was influenced by his view that the first part of the section was the operative portion of it, and that the proviso could not properly be used to explain the words as to increase of population in the operative part. He there- j fore relied on the principle of construction to be found in Western [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 180 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Derby Union v. Metropolitan Life Assurance Society. The princi- a ple is thus stated by Lord Watson, at page 652:–

‘. . . I am perfectly clear that if the language of the enacting part of the statute does not contain the provisions which are b said to occur in it, you cannot derive these provisions by implication from a proviso.’

I am sure that none of your Lordships would desire to depart from this principle where it is applicable – namely, where the enacting c part of the section is unambiguous and complete and is followed by a true proviso (that is, a qualification or an exception out of it). In my view, that is not the case here and, as Lord Herschell pointed out in the Western Derby Union case, at page 655:– d ‘Of course a proviso may be used to guide you in the selection of one or other of two possible constructions of the words to be found in the enactment, and show when there is doubt about its scope, when it may reasonably admit of e doubt as to its having this scope or that, which is the proper view to take of it . . .’. My Lords, that is precisely the method of construction which in my view, is applicable in the present case. I will add that the words beginning “Pro- vided that” are, in my opinion, additional and explanatory f words, necessary for the purpose of giving a more definite meaning to the preceding words namely, for the purpose of removing doubt as to its scope and they might easily have been incorporated in the earlier part of the section, at the risk of making it rather more cumbrous than it is’. We are g not dealing here with a true proviso, or, at any rate, not with such a proviso as this House was considering in the West Derby Union case. It cannot, I think, be disputed that, in construing a section of an Act of Parliament, it is constantly h necessary to explain the meaning of the words by an examination of the purport and effect of other sections in the same Act. A number of striking examples will be found in Max- well on The Interpretation of Statutes, 8th Edition, pages 27–28. This principle is equally applicable in the case of i different parts of a single section, and none the less so because the latter part is introduced by the words “provided that,” or like words. There can, I think, be no doubt that the view expressed in Kent’s Commentaries on American Law, 12th Edition, Volume 1, page 463, (cited with approval in j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 181 a Maxwell on The Interpretation of Statutes, 8th Edition, page 140 is correct:– ‘The true principle undoubtedly is, that the sound inter- b pretation and meaning of the statute, on a view of the enacting clause, saving clause, and proviso, taken and construed together, is to prevail’.” Lord Wright at 477 of the report too, observed:– c “It is said that, where there is a proviso, the former part, which is described as the enacting part, must be construed without reference to the proviso. No doubt there may be cases in which the first part is so clear and unambiguous as not to admit in regard to the d matters which are there clear any reference to any other part of the section. The proviso may simply be an exception out of what is clearly defined in the first part, or it may be some qualification not inconsistent with what is expressed in the first part. In the present case, however, not only is the first part of the section deficient in e express definition, but also the second part is complementary and necessary in order to ascertain the full intention of the legislature. The proper course is to apply the broad general rule of construction, which is that a section or enactment must be construed as a f whole, each portion throwing light, if need be, on the rest. I do not think that there is any other rule, even in the case of a proviso in the strictest or narrowest sense, and still less where, as here, the introduction of the second part by the word ‘provided’ is in a strict sense, inapt” (italics mine). g Clearly section 11 in my view is expressed in clear and unambiguous language and wide enough to cover the case being put forward by the plaintiffs. The italicised portions of the above passages from the speeches of Viscount Maugham h and Lord Wright accord with the decision in Irving v. Na- tional Provincial Bank Ltd (1962) 2 Q.B. 73 at 81, 82 per Wilmer LJ that the main part of a section must not be construed in such a way as to render a proviso to the section i redundant. Reading section 11 as a whole I have no doubt that it covers the claims of the plaintiffs in Suit No. LD/845/87. While I do not say that the section takes away the rights of beneficiaries under a trust relating to shares in a j bank, it certainly bars their right of access to the courts to [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 182 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. enforce the type of reliefs being claimed by the plaintiffs in a these proceedings. I turn to the second suit, that is LD/938/87. The plaintiff in that case pleaded, inter alia, as follows:– b “4. The plaintiff came to know the defendant following his release from detention after [the] military coup of 1966. The defendant was jobless and his legal practice was not yielding sufficient income for his needs and the plaintiff gave c him financial and other assistance from time to time up to and including the period when the bank was established to do banking business in Nigeria in 1976. 5. At all times material to the investment of funds in the bank, d the defendant had no surplus earnings or loan facilities to enable him [to] make any investment and [the] understanding between the parties was that the plaintiff alone would fund the investment. It was in the contemplation of both parties that the investment would assist the plaintiff in his e efforts to continue giving financial assistance to the defendant. The plaintiff also intended that depending on the level of dividend would donate a reasonable percentage of the shares to his other friends including the defendant and sell the remainder to other Nigerians. f 6(1) The defendant who is a lawyer and a former politician in the West advised the plaintiff to go to one of the existing banks to borrow money to pay for 60% shares so that it would be easy to prove to the authorities in future that he is g not being used as a front. 7. All moneys paid into the aforesaid Joint Account in the United Bank for Africa Limited as well as other payments made into Societe Generale Bank (Nigeria) Limited share capital account Number 01308986 at Standard Bank of Ni- h geria Limited (now First Bank of Nigeria Limited) Marina branch were paid in from moneys which belong exclusively and beneficially to the plaintiff. The plaintiff will rely on all documents relating to the said payments. i 8. It was from the said Joint Account and from additional cash made available by the plaintiff that payments were made for the (N270,000) shares issued by the bank in the name of the defendant and the 630,000 shares issued in the defendant’s name. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 183 a 8A. In consequence of the facts pleaded in paragraph 8 hereof the plaintiff has to the knowledge and with the acquiescence of the defendant exercised rights of ownership in and over the said shares. In particular reliance will be placed on the b fact that when the plaintiff borrowed a large sum of money for his political party (the defunct National Party of Nige- ria) around mid 1979 he called for and obtained from the defendant the Share Certificates relating to 270,000 shares c and the 630,000 shares in the defendant’s name to secure the loan with the lenders. 8B. The plaintiff was originally the only Nigerian shareholder. On the 8th of March, 1977 the plaintiff nominated the defendant as a director and upon the understanding that the d defendant will hold shares in trust for him, he directed that 18% of his 60% shares be issued in the name of the defendant as a trustee. This understanding is that the 18% shares were meant for distribution by the plaintiff at the appropri- e ate time among his close friends including the defendant who has assisted him one way or another in the formation of the bank. . . . 10. The defendant quickly advised the plaintiff (who was then f in detention) about the danger facing the bank and stated that in order to meet the situation he had decided to sell off some of the shares of the plaintiff as well as the shares of the plaintiff held in the name of the defendant and which he g well knew were held by him in trust for the plaintiff. The defendant had in fact agreed with intending purchasers to sell the said shares and had (according to him) collected N3.1 million from such purchasers. . . . h 12. As a result of the use of the money made available to the defendant by the plaintiff through the business agents of Mr Klaus Seemuth the defendant was able to pay for (a) the 499,200 shares covered by Certificate No. 000024 in the de- i fendant’s name (b) the 460,800 shares covered by Certifi- cate No. 000026 in the defendant’s name (c) 1,164,800 shares covered by Certificate No. 000025 in the name of the plaintiff’s wife Mrs F.M. Saraki and (d) 1,075,200 shares covered by Certificate No. 000027 in the name of the plain- j tiff’s wife. The balance of N800,000 out of the said sum of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 184 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Four Million Naira (N4m) was disbursed by the defendant a according to the orders of the plaintiff leaving a sum of N70,000 still with the defendant and the plaintiff hereby claims the said sum of N70,000. b . . . 14. At all times material to this action the defendant was fully aware that the plaintiff was the beneficial owner of the shares standing in his (defendant’s) name and that he was obliged to deal with the shares for the benefit and in accor- c dance with the direction of the plaintiff. It was only recently when (for reasons best known to him) the defendant has turned round to deny the trust. 15. By reason of the matters hereinbefore pleaded, the defen- d dant is accountable to the plaintiff as a trustee of all the shares standing in his name in the bank particulars of which are as follows:– No. of Shares Share Certificate i. 270,000 000003 e ii. 630,000 000006 iii. 85,800 000011 iv. 418,000 000018 v. 330,000 000022 f vi. 499,200 000024 vii. 460,000 000026 viii Unknown Unknown ix. Unknown Unknown” g (Italics mine) The sum total of the case being made out by the plaintiff in this suit is that the defendant, a registered holder of the h shares in dispute in that suit, holds those shares as a front for him (the plaintiff) and that he the plaintiff is in truth and in fact the owner of the shares in dispute and not the defendant. I cannot imagine a stronger case that falls squarely within the provisions of section 11 than this. The first four reliefs i sought in this case are identical with those in the first Suit No. LD/845/87 and, in my humble view, in so far as those four reliefs are concerned, they are covered by section 11. Relief 5 however, does not come within the purview of j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 185 a section 11 and there can be no bar therefore to the plaintiff pursuing that claim. In the course of the hearing of this appeal, a member of b this Court asked Counsel for the parties whether section 11 applied to bar cases pending at the time the Decree came into force. Chief Ajayi for the defendant submitted that it did and relied on the meaning of the word “maintain” used in c the statute. Chief Williams for the plaintiffs was silent on the issue. In view of the fact that this point has been raised, I consider it necessary to say a few words on it. The general rule relating to whether a statute is to be treated as being d prospective or retrospective is well stated at paragraph 922 of Halsbury’s Laws of England (4ed) Volume 44 where the learned author states:– “922. PRESUMPTION AGAINST RETROSPECTION. e The general rule is that all statutes, other than those which are merely declaratory, or which relate only to matters of procedure or of evidence, are prima facie prospective, and retrospective effect is not to be given to f them unless, by express words or necessary implication, it appears that this was the intention of the legislature. Similarly, the courts will construe a provision as confer- ring power to act retrospectively only when clear words g are used. By virtue of the presumption, transactions have been held to be neither invalidated by reason of their failure to comply with formal requirements subsequently imposed, h nor open to attack under powers of avoidance subsequently conferred. On the other hand, they have not been rendered valid by subsequent relaxations of the law, whether relating to form or to substance. Similarly, provisions in which a contrary intention does not appear i have been held neither to impose new liabilities in respect of events taking place before their commencement, nor to relieve persons from liabilities then existing, and the view that existing obligations were not intended to be affected has been taken in varying degrees even of provi- j sions expressly prohibiting proceedings. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 186 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

It is also in reliance on the presumption that the courts a have frequently held pending proceedings to be unaffected by changes in the law so far as they relate to the determination of substantive rights. In the absence of a clear indication of a contrary intention in an amending b enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the action was commenced and this is so whether the law is changed before the hearing of the case at first instance c or while an appeal is pending.” See also Afolabi and others v. Governor of Oyo State and others (1985) N.S.C.C. 1151; (1985) 2 N.W.L.R. (Part 9) 734. The law derives its origin from the legal maxim: Nova d constitutio futuris formam imponere debet, non praeteritis, that is a new law ought to be prospective, not retrospective, in its operation. Thus unless there are clear words in section 11 that will lead to the conclusion that the section is retro- e spective in the sense that it bars pending proceedings, it has to be held that it does not affect pending proceedings as the suits before us now. One, therefore, has to examine the section. It reads:– f “. . . no suit or other proceedings shall be maintained against any person . . .” (italics mine). The question that arises is: What is the meaning of the word “maintained”? Does it render the section retrospective? The g cardinal rule of construction is that words and sentences are to be constructed in their true and natural meaning and where the words are clear and unambiguous effect ought to be given to them. Words are primarily to be construed in h their ordinary meaning of common and popular sense. The word “maintain” is defined in Black’s Law Dictionary (5ed) as follows:– “MAINTAIN. The term is variously defined as acts of repairs and i other acts to prevent a decline, lapse or cessation from existing state or condition, bear the expense of; carry on; commence; continue; furnish means for subsistence or existence of; hold; or keep in an existing stage or condition; hold or preserve in any particular state or condition; keep from change; keep from falling, declining, j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 187 a or ceasing; keep in existence or continuance; keep in force, keep in good order; keep in proper condition, keep in repair; keep up; preserve, preserve from lapse, decline, failure or cessation, provide for; rebuild; repair, replace; supply with means of support; supply b with what is needed; support, sustain, uphold. Negatively stated, it is defined as not to lose or surrender, not to suffer or fail or decline. El Paso County Water Imp. Dist. No. 1 v. City of El Paso, D.C. Tex., 234 F2d 927, 931. c To ‘maintain’ an action is to uphold, continue on foot, and keep from collapse a suit already begun, or to prosecute a suit with effect. George Moore Ice Cream Co v. Co Rose, Ga., 289 U.S. 373. 53 S. Ct 620. 77 LED 1265. To maintain an action or suit may mean to commence or institute it; the term imports the existence of d a cause of action. Maintain, however, is applied to actions already brought, but not yet reduced to judgment. Smallwood v. Gallardo. 275 U.S. 56, 48 S.C. 1, 23, 72 L. Ed. 152. In this connection it means to continue or preserve in or with to carry on.” e And in the Shorter Oxford English Dictionary “maintain” is defined as meaning “to continue, persevering, to carry on, keep up; to have ground to sustain an action: to continue in, preserve, retain (a condition, position attitude etc.) to keep in f being; to preserve unimpaired, a course right, state of things etc.”. The verb “to maintain” in pleading has a distinct technical signification. It signifies to support what has already been g brought into existence. In my view the word “maintained”, when used with reference to actions, means “continued” after they have been brought. If it is to be prospective only, the word “brought” would have been used. h In Smallwood and another v. Gallardo; Ordinez and others v. Gallardo 275 U.S. 56; an Act of 4th March, 1927 amending a previous Act of 2nd March, 1917 provided in section 48 thereof that no suit for the purpose of restraining the i assessment or collection of any tax imposed by the laws of Porto Rico “shall be maintained” in the District Court of United States for Porto Rico. The U.S. Supreme Court held that the provision applied to previously instituted suits pend- j ing before it. Mr Justice Holmes, delivering the opinion of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 188 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the court observed at 60–62; 23–24 of the respective reports a thus:– “These are suits brought in the District Court of the United States of Porto Rico to restrain the collection of taxes imposed by the b Laws of Porto Rico. On January 7th, 1927, the Circuit Court of Appeals affirmed Decrees of the District Court dismissing the bills. On March 4th,1927, by Chapter 503, 7 of the Act of that year, Congress provided that section 48 of the act to provide a civil government for Port Rico should be amended to read as follows:– c ‘Section 48. That the Supreme and District Courts of Porto Rico and the respective Judges thereof may grant writs of habeas corpus in all cases in which the same are grantable by the Judges of the District Courts of the United States, d and the District Courts may grant writs of mandamus in all proper cases. That no suit for the purpose of restraining the assessment or collection of any tax imposed by the laws of Porto Rico shall be maintained in the District Court of the United e States for Porto Rico. 44 Starts. 1418, 1421 (48 US.C.A 872) f Writs of certiorari were granted by this Court on May 16, 1927, but argument was ordered on the question whether the cases had not become moot by virtue of that Act. Apart from a natural inclination to read them more narrowly there would seem to be no doubt that the words of the statute covered g these cases. To maintain a suit is to uphold, continue on foot and keep from collapse a suit already begun. And although the Circuit Court of Appeals in Gallardo v. Porto Rico Rv. Light and Power Co 18 F. (2d) 918, 923, with some colour of authority has held that h the act does not apply, we cannot accept that view. To apply the statute to present suits is not to give it retrospective effect but to take it literally and to carry out the policy that it embodies of pre- venting the Island from having its revenues held up by injunction; a policy no less applicable to these suits than to those begun at a i later day, and a general policy of our law. Re v. Stat 3224 (26 U.S.C.A 154) (Comp. St. 59471). So interpreted the act as little interferes with existing rights of the petitioners as it does with those of future litigants. There is no vested right to an injunction against collecting illegal taxes and bringing these bills did not j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 189 a create one. Hallowell v. Commons 239 U.S. 506, 509, 36 S. Ct. 202, 60 L. Ed. 409. This statute is not like a provision that no action shall be brought upon a contract previously valid, which in substance would take away a vested right if held to govern con- b tracts then in force. It does not even attempt to validate previously unlawful taxes. It simply makes it plain that these cases are not excepted from the well known general rule against injunctions. It does not leave the tax-payer without power to resist an unlawful c tax, whatever the difficulties in the way of resisting it. The sequence of the clause in the amendment after others giving authority to grant writs of habeas corpus and mandamus shows that it puts a limit to the power of the court. See Dodge v. Osborn, d 240 U.S. 118, 119, 36 S. Ct. 275, 60 L. Ed. 557. That is a question of construction and common sense. Fauntleroy v. Lum, 210 U.S. 230, 235, 28 S. Ct. 641, 52 L. Ed. 1039. Therefore when the Dis- trict Court required a deposit in the registry of a sum to secure payment of the tax in dispute, the money should be returned as e there is no jurisdiction to dispose of it otherwise. Of course it does not matter that these cases had gone to a higher court. When the root is cut the branches fall. McNulty v. Batty, 10 How 72, 13 L. Ed. 333.” f In the course of our research my attention was drawn to an English case, Moon v. Durden 2 Ex 22; 154 E.R. 389. In that case, section 18 of Gaming Act, 1845 (8 and 9 Vict. c. 109) which provided that “all contracts and agreements by way of g gaming or wagering shall be null and void; and that no suit shall be brought or maintained in any court of law or equity for recovering any sum of money or valuable thing alleged to be won upon any wager, or which shall have been depos- h ited in the hands of any person to abide the event which any wager shall have been made” was held per Parke B, Alder- son B and Rolfe B (Platt B dissentiente) that the statute had not a retrospective operation, so as to defeat an action for i wager commenced before the statute passed. In his judgment Rolfe B observed at 33 of the report:– “This was an action on a wager. It was commenced on the 12th of June, 1845; and the main question in the case is, whether the effect j of the Stat. 8 and Vict. c. 109 s. 18, is to disable the plaintiff from [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 190 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

maintaining the action. That statute did not receive the royal assent a until August, 1845, after this action had been commenced.” After quoting section 18, the learned Baron continued:– “The effect of this clause is to make void all wagers, and to pre- b vent the bringing or maintaining any action for the recovery of money won on any wager, and the only question is, whether its operation is retrospective, so as to affect past transactions and existing suits. c The general rule on this subject is stated by Lord Coke, in the second Institute, 292, in his Commentary on the Statute of Gloucester, Nova constitutio futuris formam imponere debet non praeteritis”; and the principle is one of such obvious convenience and justice, that it must always be adhered to in the construction of statutes, d unless in cases where there is something on the face of the enactment putting it beyond doubt that the legislature meant it to operate retrospectively. On the part of the defendant it was argued, that in this statute the clause must have been intended to affect past transactions; because e it not only enacts that wagers shall be null and void, but further, that no suit shall be brought or maintained for the recovery of money won on a wager. The latter branch of the clause, it was contended, would have no operation if the enactment were restricted f to future wagers; for it would be useless to enact that no action should be brought, and still more so that no action should be maintained, in respect of a contract already declared to be null and void; and particularly the enactment, that no action should be maintained; must, it was said, apply not only to wagers already g won, but even to suits already pending for their recovery. It must be observed that this latter part of the enactment that, I mean which prohibits the bringing or maintaining of actions is in no respect inconsistent with the construction which gives to the h enactment an operation merely prospective. The most that can be contended is, that the words in question are unnecessary; and therefore, independent of authority, if the argument rested here; what we should have to decide would be, whether the improbabil- ity that the legislature should unnecessarily prohibit the bringing i or maintaining an action on a contract already made void in a prior part of the same clause, is so great as to warrant us in saying that it must have been intended retrospectively to affect rights already vested. I think this would be a very unreasonable and strained inference, and which, considering the ordinary frame and language j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 191 a of acts of Parliament, would be by no means fairly deducible from the clause in question.” The learned Baron went on to consider cases cited by the b defendant in favour of the section being retrospective and concluded that he did not think those cases were rightly decided. The main plank on which he rested his decision seems to be that the section of the law declaring gaming or c wagering contracts null and void could only be in respect of future contracts and, therefore, the section barring actions on such contracts could only be prospective as well. Alderson B in his own judgment observed at 40:– d “Here, no doubt, the legislature were desirous of putting an end to gaming and wagers; but, unless the words imperatively require it; we ought not to make their prohibition retrospective; for it is contrary to the first principles of justice to punish those who have of- e fended against no law; and surely to take away existing rights without compensation is in the nature of punishment. The words of the statute do not, as it seems to me require this construction. The first clause of the section is probably prospective. All contracts by way of gaming or wagering are void. It seems to me, at present, f that this applies to the future; and indeed it was, as I understood, so admitted by Mr Lush in his argument. But it was said that the next clause was not so; for that it not merely prohibited the future bringing of suits to enforce wagers, but also the future maintenance of such suits when previously brought. But I cannot give g such a construction to what appears to me only redundant words in this section. If it had been stated that no action shall be brought or only ‘that no action shall be maintained, it seems to me clear that he should have considered the words ‘brought’ and ‘maintained’ h synonymous and as prohibiting the stress of future suits alone. And although the use of both in one sentence makes this less obvious, yet, when we consider that to give the more strict interpretation to the word ‘maintained’ will compel us to suppose, without further evidence, that the legislature contemplated so gross an act i of injustice as, without compensation, to take away an existing right of action already pending, and that, too, with no provision even for the costs incurred in the enforcing of what was, before the act a legal right, I am not disposed to put such a construction on the word, but to treat it, as I think the legislature intended it, as a j redundant expression only. In the 16th section, where they do [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 192 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

speak of existing actions of another sort, they do provide for the a staying them, by application to the Court and on payment of costs; and I think if they had intended to put an end to pending actions of this description, they would have shown it by introducing a similar provision in the 18th section.” b Parke B observed at 43:– “The only question in this case is; whether the act (8 and 9 Vict. c. 109, s. 18) affects existing suits for the recovery of wagers or not. The clause in question having been read, it is unnecessary for me c to repeat it. I have felt a good deal of difficulty in deciding upon the true construction of this clause; but, after much consideration, I agree in opinion with my Brothers Alderson and Rolfe, that it applies to d future actions only. The language of the clause, if taken in its ordinary sense, as in the first instance we ought to do, applies to all contracts, both past and future, and to all action, both present and future, on any wager, whether past or future. But it is, as Lord Coke says, ‘a rule and e law of Parliament that regularly, nova constitutio futuris formam imponere debet, non praeteritis’ (2 Inst. 292). This rule, which is in effect, that enactments in a statute are generally to be construed to be prospective, and intended to regulate the future conduct of f persons, is deeply founded in good sense and strict justice, and has been acted upon in many cases. For instance, in the construction of the Statute of Frauds, which was held not to apply to promises made before the 24th of June, 1677; Gilmore v. Shuter (T. Jones, 108; 2 show, 16, and also of the Stat. 2 and 3 Vict. c. 29 which, it g has been decided is not to be construed to defeat a right by relation already vested in an assignee of a bankrupt: Edmonds v. Lawley (6 M. and W. 285); Moore v. Phillips (7 M. and W. 536). But this rule, which is one of construction only, will certainly yield to the intention of the legislature; and the question in this and in h every other similar case is, whether that intention has been sufficiently expressed. Upon that question it is that I have felt considerable doubt. It seems a strong thing to hold, that the legislature could have i meant that a party, who, under a contract made prior to the act, had as perfect a title to recover a sum of money, as he had to any of his personal property, should be totally deprived of it without compensation. It is a still stronger thing to hold, that if he has already commenced an action with an undoubted right to recover his debt j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 193 a and costs, he should not only forfeit both, but also be liable, as he would in the ordinary course of a suit, to pay the costs of his adversary, by being obliged to discontinue, or be nonprossed, or have his judgment arrested. These considerations afford a strong reason b for limiting the operation of the words of this section, and holding that they apply to future contracts, had actions on such future contracts only at all events, to future actions only, if any distinction can be made in the degrees of apparent injustice. But, on the other c hand, it is to be recollected that the toleration of actions for wagers, on subject in which the parties have no real interest has often been made a subject of reproach to the law of England; and it is not a matter of surprise, that the legislature took an early opportunity of putting a stop to them; and also it is to be borne in mind, d that the parties who would suffer by a strict construction of the clause, are often successful gamesters or speculators, not much the objects of favour with the legislature; and one considers the clause, therefore, not quite in the same spirit, as if the enactment related to ordinary contracts. e The enactment, that all contracts or agreements, by way of gaming or wagering, shall be null and void, if it stood by itself, ought most clearly to be construed as applicable to future contracts and agreements only, by virtue of the rule of construction to which I f have adverted, and the apparent injustice of putting an end to a vested right. So, if the next part stood alone, it would, I think, though not so clearly, be construed, for the same reason, to apply to future actions only; and the clause, to avoid the injustice which would otherwise be inflicted on a plaintiff, should be construed to g mean, not that an action already brought should not be maintained. But that no action should afterwards be brought, or, if brought, maintained; and the absence of any provision that the costs of an existing action should be paid by a defendant, in my mind, h strongly favours that construction. The union of the two clauses together does not appear to me to make any difference. The latter clause is surplusage, so far as it relates to bringing actions, whether we construe the former to apply to future or existing contracts; and the only observation that can be made is, that in one i mode of construing the enactment the word ‘maintained’ is inoperative, in the other it is not. It is redundant, unless it applies to the maintenance of an existing action: but this circumstance of mere redundancy does not appear to me to be sufficient to show that the legislature meant to do so unjust a thing as to prevent the mainte- j nance of an existing well founded action. I think it best to abide by [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 194 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

the sound rule of construction above referred to, notwithstanding a the conjectures as to the real intention of the legislature, which the nature of the subject occasions” (italics mine). In his dissenting judgment Platt B reasoned at 26–30 thus:– b “The general rule, governing the construction of statutes, is correctly stated in Bac. Abr. 439, ‘Statute’ C. It is there laid down as in general rule that no statute is to have a retrospect beyond the time of its commencement; for the rule and law of Parliament is, c that nova constitutio futuris formam debet imponere, non praeteritis and Gillmore v. The Executors of Shooter (2 Mod. 310) is quoted as an example. In that case, a treaty of marriage being on foot between the plaintiff and a person whom he afterwards married and had £2,000 with as a portion, Shooter, who was of kin to d the plaintiff, promised to give him as much, or to leave him as much by his will. This promise was made before the 24th of June, 1677. Shooter died in September following, without having paid the money, or made provision by his will for the payment thereof. e An action was brought against the executors of Shooter, and the question made upon the special verdict was, whether the promise not being in writing, was within 29 Car. 2, c. 3, whereby it is enacted, ‘that, from and after the 24th of June, 1677, no action shall be brought to charge any person upon any agreement made upon f consideration of marriage, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged’ Judg- ment was given for the plaintiff. And, per Cur., it cannot be presumed that this act was to have a retrospect, so as to take away a g right of action which the plaintiff was entitled unto before the time of its commencement. It should, however, be observed, that the form of the condition, on which the right to bring an action was made to depend, imported that future agreements alone were re- h quired to be written and signed. The words are, ‘unless the agreement shall be in writing, and signed.’ But the general rule is not without exception. A statute may have a retrospect to a time ante- cedent to that of its commencement. Thus, a statute which compels a convenantor to do an act, which before the passing of the statute i he had covenanted not to do, or which forbids his doing an act, which he had before the passing of the statute covenated to do, repeals the covenant: Brewster v. Kitchell (1 Salk. 198.) The 9 Geo. 4 c.14, S.1, enacts, ‘that in actions grounded on any simple contract, no acknowledgment or promise shall be deemed j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 195 a sufficient evidence of a new or continuing contract, whereby to take the case out of the operation of the 21 Jac. 1, c. 16, unless such acknowledgment or promise shall be made or contained by or in some writing, to be signed by the party chargeable’. That statute b was to take effect on and after the 1st of January. 1829, and has been construed to render insufficient all proof, adduced after the 31st of December, 1828, of an unwritten acknowledgment or promise, although, by such a construction, the statute is made to c operate retrospectively, in avoidance of all acknowledgments and promises expressed before the 1st of January, 1829; Towler v. Chatterton (6 Bing. 258), Ansell v. Ansell (3 C. and P. 563), Cun- ner v. Cattle (2 M. and P. 367; 9 Bing. 258). By the 3 and 4 Will. 4, c. 42, s. 31, personal representatives failing in their suits are d subject to costs. This statute has been held, by the Courts of Queen’s Bench and Exchequer, to operate retrospectively, and to render executors and administrators who had brought their actions before it passed, liable Freeman v. Moyes (I Ad. and Ell. 388), Pickup v. Wharton (2C. and M. 405), Grant v. Kemp (id. 636). The e former of these two statutes intended to abolish an unsatisfactory means of proof; and the latter, the anomaly of allowing a plaintiff, because he sued in a representative character, to escape the just penalty of paying the costs occasioned by his having brought a f desperate and ill founded action. The 8 and 9 Via c.109, intended to prevent for the future her Maj- esty’s courts of justice from being required to execute the unwor- thy office of deciding a gambling controversy, or of compelling, by their process, the payment of a wager. g By adhering to the express provisions of the 9 Geo. 4, c. 14, s. 1, and the 3 and 4 Will. 4, c.42, s. 31, the Courts have applied the remedies intended. h By a like course alone will this Court accomplish the object of the legislature in passing the 18th section of the 8 and 9 Vict. c. 109. In that section the legislature appears to me to have intended to deal with subsisting as well as with future contracts by way of gaming or wagering. After annulling future contracts of that de- i scription, any further provision as to them, or as to any proceedings upon them, was unnecessary. The enacting part of the section might have stopped at the end of the declaration that such contracts should be null and void. The next provision therefore, must be taken to deal with money or other valuable things alleged to be j won upon such wagering contracts as subsisted on the 8th of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 196 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

August, 1845; and as to them, to incapacitate the winner from a bringing or maintaining in any court of law or equity a suit for their recovery. The words are, ‘and that no suit shall be brought or maintained in any court of law or equity for recovering any sum of money on valuable thing alleged to be won upon any wager, or b which shall have been deposited in the hand of any person to abide the event on which any wager shall have been made. In any way of reading this part of the section, it is impossible to prevent its operating to defeat the rights vested in the winners to recover, if they c shall have failed to bring their actions before the 8th of August, 1845. But upon what principle can it be urged, that one of two persons, each having won a bet on the same day, and upon the same event, shall be entitled to recover, because he shall have brought his suit the day next before the act received the royal assent; and d the other who shall have brought his suit two days later, shall be barren, altogether? It seems to me that the legislature, contemplat- ing the injustice of allowing such a distinction, has advisedly introduced the words ‘or maintained,’ in order to extend equally to both the incapacity to recover. The legislature has used the word e maintained alternatively: are we to say it has no distinct meaning? Dixit: are we to say non voluit? The verb ‘to maintain,’ in pleading, has a distinct technical signification. It signifies to support what has already been brought into existence. Thus, a defendant, f who admits the right of a plaintiff to bring, or to bring and up to the last pleading maintain his action, but relies on matter disabling him from further proceeding, insists that the plaintiff ought not, by reason of such matter, further to maintain his action. A plea in bar of the further maintenance of the action admits the plaintiff to have g properly maintained it up to the time of such plea. In this case, however, the defendant, by his demurrer, objects to the declaration. He says: ‘Your action was brought properly, but you have no right to maintain it by your declaration, or, in other words, the law has intervened and deprived you of that right.’ The like interven- h tion deprived the plaintiff in Kirkhaugh v. Herbert, and the Anonymous case also referred to in 6 Bing. 265, of his right of action, and in Grant v. Kamp (2 C. and M. 636) and Freeman v. Moyes (1 Ad. and El 338) of his immunity from the defendant’s i costs. In confirmation of the view which I have taken of the 18th section, it should be observed, that the expressions ‘shall have been deposited’ and shall have been made’ appear to have been selected in contradistinction to the words ‘shall be’. If the section was j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 197 a intended to operate prospectively only, the words ‘shall be’ would have been appropriate to its object, but if retrospectively, the words ‘shall have been’ would be not only appropriate, but necessary.” b Concluding, he said at 32:– “Upon the whole, taking into consideration the general spirit of the act, and the nuisance the legislature sought, by the 18th section, to c abate, I think they intended that, from the 8th of August, 1845, when the act received the royal assent, her Majesty’s courts of law and equity should not be made instrumental in enforcing the payment of a wager; that the supposed vested rights of winners to recover were not contemplated as subjects of legislative projection, d but, on the contrary, were absolutely annulled; that, from and after the 8th of August, the winners were barred from bringing, or, if they had been brought them, from maintaining suits either at law or in equity, to recover the money or valuable thing alleged to be won; and consequently, that the defendant is entitled to judgment.” e I have carefully considered all the judgments delivered in the case. I found myself unable to agree with the majority decision that the expression “shall be brought or main- f tained” is redundant. This decision ran foul of the rule that a construction which would leave without effect any part of the language of a statute will normally be rejected. I am more impressed with the dissenting judgment of Platt B g which is in line with the decision of the Supreme Court of the United States of America in Smallwood and another v. Gallardo; Ordinez and others v. Gallardo (supra) with which I am in full agreement. If the legislature intending section 18 of the Gaming Act, 1845 to be prospective only it h would not have enacted in that section that no action “shall be brought or maintained: It would have been sufficient to enact that no action ‘shall be brought’”. There were other indicia in the section to lead to the conclusion that a retro- i spect was intended. Such expressions as “shall have been deposited” and “shall have been made” appearing in the section and the effect of which expressions was never considered by the majority in Moon v. Durden would appear to j support the dissenting judgment of Platt B. See Williams v. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 198 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Williams (1971) 2 All E.R. 764 where the court relied on a a number of small indicia tending to show that the Matrimo- nial Causes Act, 1970 had retrospective effect, even though there was no provision in the Act expressly tending to lead b to that conclusion. I am of the view that Moon v. Durden was wrongly decided and I do not intend to follow it in preference to the clear decision in Smallwood v. Gallardo. The object of section 11, in my respectful view, is to pro- c hibit “fronts” being used to hold shares in a bank thus pre- venting such an important sector of the national economy being controlled by a few individuals. That being so, I cannot imagine that the legislature would intend that actions to d enforce such arrangements (under the guise of trusts) made before the Act was promulgated would continue to be maintained. As revealed by cases that have come before this Court, the constant boardroom conflicts in the banking sec- e tor before the promulgation of the Banks and Other Finan- cial Institutions Decree centred around control of these institutions by powerful individuals through the use of fronts. This the Decree set out to put an end to by the provi- f sion of section 11 in the Decree. In the case on hand the expression “shall be maintained” as used in section 11, construed in its natural sense, contem- plates the barring of all actions, whether pending or not, g coming within the provisions of section 11. Bearing the above in mind it is my view, and I so hold, that section 11 applies not only to future actions but also to ac- h tions pending at the time the Decree came into force. The conclusion I arrive at is that not only are the plaintiffs’ claims in the two consolidated suits (except claim 5 of the second suit) within the contemplation of section 11, the proceedings, although pending at the time the Decree came i into force, are affected by it because by the use of the word “maintain” in the section it covers pending proceedings as well. I, therefore, hold that the courts below were wrong to have held that the courts still had jurisdiction to entertain the j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC N.A.B. Kotoye v. Mrs F.M. Saraki and another 199 a suits. In my respectful view, section 11 has aborted the suits and, as the plaintiffs no longer have any right to maintain them, they are hereby struck out except as to Suit No. b LD/938/87 where the fifth claim for:– “. . . an order for refund of the sum of N70,000 being balance of the N800,000 held by the defendant on the plaintiff’s behalf . . .” still subsists. The second plaintiff is at liberty to pursue this c claim. I need to observe, although it is not an issue before us, that for the reasons I have stated above, the defendant’s counter- claim in Suit No. LD/938/87 also falls within the ambit of d section 11, but his counter-claim in Suit No. LD/845/87 does not. In view of the conclusion I have just reached above, I do not consider necessary to deal in detail with the other issues e raised by the defendant in his brief. Suffice to say, however, that I do not see a case of denial of fair hearing made out against the court below. It maybe that that court misconceived the defendant’s case put before it and thereby came f to a wrong conclusion. This is not to say that the court had denied the defendant a fair hearing. What it may mean where the court has asked the wrong questions is that its jurisdiction in determining the matter before it might be g affected; it is still no case of denial of fair hearing. As stated earlier in this judgment, that court in the lead judgment of Ubaezonu JCA first asked itself the correct question but later proceeded to ask the wrong question and, as shown by my h conclusion, thereby came to a wrong decision. This disposes of Issues 1 and 2. As there can be no direct appeal from the High Court to this Court the issue posed as Issue 3 is, in my respectful view, incompetent. I say no more on it. i Finally if this appeal rests with me, I would allow it and set aside the judgment of the court below affirming that of the trial High Court. The plaintiffs’ claims in Suit No. LD/845/87 would be struck out, the right of the plaintiffs to j continue with that suit having been taken away by section 11 [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 200 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. of Decree No. 25 of 1991. The plaintiffs’ claims 1, 2, 3 and a 4 in LD/938/87 would equally be struck out. The plaintiff in that suit is at liberty to proceed with the hearing of the suit in respect of claim 5 thereof. I would award N1,000 to the b defendant being cost of this appeal. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 201 a F.S.B. International Bank Limited v. Imano (Nigeria) Limited b COURT OF APPEAL, LAGOS DIVISION SULU-GAMBARI, PATS-ACHOLONU, UWAIFO JJCA Date of Judgment: 8 AUGUST 1994 Suit No.: CA/L/113/92 c Banking – Contract – Liability of indorser of promissory note – Scope of promissory note – Difference between bill of exchange and promissory note Banking – Negotiable instruments – Holder in due course of d bill of exchange or promissory note, accepter of bill of exchange – Liability of an indorser Banking – Promissory note – Liability of maker, indorser e and holder in due course Words and phrases – “Acceptor”, “Drawer”, “Holder in due course”, “Promissory note”, “Indorsement” – Meaning of f Facts The appellant indorsed certain promissory notes (nine in number) to the respondent for value given on the notes. The g appellant indorsed its confirmation on the notes while the respondent indorsed as acceptor on the maturity date, the respondent presented the promissory notes and five were honoured and four dishonoured. The respondent filed action h charging the value of the dishonoured notes. The lower court entered judgment in favour of the plaintiffs. The appellant being dissatisfied appealed. Held – i 1. Where a person signs an instrument otherwise than as a maker, drawer or acceptor, he incurs the liability of an indorser to a holder in due course. In the instant case, the appellant’s action in appending its signature to the prom- j issory note amounted to an indorsement, not in the sense [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

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that it was assigning or transferring its benefit to any- a body but indicating that it has accepted by that signature on the document to become liable to the respondent in all effects. Indorsement here loosely used implies sign- b ing on the document which in this case is the promissory note. 2. The liability of an indorser to a holder in due course of an instrument arises only when the instrument has been c negotiated and transferred to a third party, on the basis and by virtue of the indorsement and the third party takes it in good faith and thus becomes a holder in due course. Such a holder in due course has a cause of action d against the person who so indorsed or signed the instrument. 3. For a negotiable instrument to qualify as a bill of exchange there must be three parties, namely:– e (a) the party giving the order who must sign it as the drawer; (b) the party to whom the order is given who is called the drawee and who on assenting to the terms of the f order and signing it is called the acceptor; and (c) the party to whom the money is to be paid who is called the payee or, if the bill is expressed to be g payable to bearer, the bearer. 4. A promissory note requires two parties for it to come into being, namely:– (a) the person who gives the promise and who is called h the maker; (b) the person to whom the note is given and who is called the payee. 5. A promissory note is a mere promise in writing to pay a i specified sum at a time therein limited or on demand or at sight to a person therein named or his order or bearer. It is an unconditional written promise signed by the maker to pay absolutely and at all events a sum certain j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 203 a of money either to the bearer or to a person therein designated or his order at a time specified therein or at a time which must certainly arrive. b 6. By making a promissory note the maker undertakes that he will pay it according to its tenor. Consequently, the maker is estopped from denying to a holder in due course the existence of the payee and his capacity to in- c dorse. 7. In the application of the law relating to bills of exchange to a promissory note, the maker of a note is deemed to correspond with the acceptor of a bill and the first in- d dorser of a note is deemed to correspond with the drawer of an accepted bill payable to drawer’s order. 8. By indorsing a bill of exchange, the indorser undertakes e that on due presentation it will compensate the holder or a subsequent indorser who is compelled to pay it provided that the requisite proceedings on dishonour are duly taken. f 9. “Indorsement” of a bill of exchange or promissory note means the writing by a transferor on a bill or note (which by definition already has three parties or two parties respectively and has thus come into being as an instru- g ment) of his name and delivery of it to a transferee. In other words, the transferor is the indorser and the transferee is the indorsee. The indorsee could be a holder or a holder for a value or a holder in due course. h 10. The maker of a promissory note on the other hand is the promisor (just as an acceptor of a bill promises to honour it (a promisor)). The person to whom the maker of a note delivers it is in effect the promisee. If that person be- i comes the first indorser of the note, he is like the drawer of an accepted bill. 11. An acceptor of a bill of exchange is a drawee (that is the person to whom the bill is directed) who has signified j that he will honour the bill. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

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12. The drawer of an accepted bill is the person who passes a it on or negotiates it to another party who may be a holder in due course or a holder for value without notice. 13. A holder in due course of a bill or note means a holder b of a bill of exchange, cheque or promissory note complete and regular on the face of it who takes it in good faith and for value before it is overdue and without notice either of its previous dishonour or of any defect in c title of the person who negotiated it to him. Appeal dismissed.

Cases referred to in the judgment d Nigerian Ogunbi v. Kosoko (1991) 8 N.W.L.R. (Part 210) 511 e Foreign Bernadi v. National Sales Corporation (1931) 1 All E.R. 320 Brayton v. Bale (1923) 2 B and C 293 f Fielding and Platt Ltd v. Najjar (1969) 2 All E.R. 150 MacDonald and Co v. Nash and Co (1924) All E.R. 601 Macdonald v. Whitfield (1883) 8 A.C. 733 g R.E. Jones Ltd v. Waring and Gillow Ltd (1926) A.C. 670 Walton v. Mascall (1844) 13 M and W 458 Yeoman Credit Ltd v. Gregory (1963) 1 All E.R. 245 h Nigerian statute referred to in the judgment Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990, sections 3, 26, 85(1) and (2), 87, 91(1) and (2) i

Nigerian Rules of Court referred to in the judgment High Court of Lagos State (Civil Procedure) Rules, 1972, Order 10 Rule 1(a) j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 205 a Counsel For the appellant: Oyesanya For the respondent: Ogunmekan (with him Balogun) b Judgment SULU-GAMBARI JCA: (Delivering the lead judgment) This appeal deals with Order 10 of the High Court of Lagos State c (Civil Procedure) Rules, 1972. The purpose of the rule is to enable the plaintiff to obtain summary judgment without trial where his case is patently clear, unassailable and the defence put forward does not avail the defendant. d The plaintiff (now respondent) issued a writ of summons using Form No. 1 accompanied by a statement of claim which specifically indicated that the claim was based on bills of exchange and/or promissory notes. e The defendants entered appearance. The first defendant (who is the appellant herein) filed a statement of defence out of time and when the plaintiff moved for summary judgment, the first defendant (appellant) brought an application f for extension of time to file a statement of defence. In opposition to the application for summary judgment, the first defendant filed an “Affidavit to Show Cause” which g contains 13 paragraphs but paragraphs 7–13 are considered germane and they are quoted as follows:– “7. That at all material times, the first defendant acted as banker to the second defendant and performed its duties vis- à-vis the plaintiff only on the instruction of the second de- h fendant. 8. That the first defendant did not GUARANTEE OR ACCEPT the payment of the promissory notes as alleged in the affidavit in support in the summons for judgment. i 9. That all the first defendant did in respect of the promissory notes was to identify and confirm the signatories of the second defendant/company on the promissory notes as requested by the plaintiff to the first defendant vide their letter dated 28th August, 1988. The copy of the letter is herewith j attached and marked exhibit ‘A’. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 206 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

10. That the first defendant did not enter into any contract with a the plaintiff over the Promissory Notes, and there was no consideration whatsoever from the plaintiff to the first defendant over the promissory notes. b 11. That the confirmation of the signatories of the second defendant Company on the Promissory Notes was a mere administrative service given to a customer under normal banking duties which does not make the first defendant part of the contract between the plaintiff and the second defen- c dant. 12. That to the best of my knowledge and belief, whenever our bank the first defendant enters into a contract the seal of the bank will be affixed on the document evidencing such contracts. d 13. That the promissory notes exhibited by the plaintiffs in their affidavit in support of the summons as KOC ‘2’–KOC ‘10’ did not contain the company seal of the first defendant bank.” e The first defendant (appellant) moved its application for extension of time within which to file a statement of defence. As expected, the motion was opposed by learned Counsel for the respondents. f The learned trial Judge, however, struck out the application on the ground that it was not necessary because, if the first defendant/appellant succeeded on its affidavit to show cause, it would then be granted leave to defend, and eventu- g ally the first defendant/appellant would be granted leave to file and serve its statement of defence out of time. At the trial court, the learned Counsel for the first defendant attacked the application for summary judgment on the h ground that Form No. 2 was not used and the writ was therefore not specially indorsed rendering the motion for summary judgment incompetent. In his ruling, the learned trial Judge held that by not using i Form No. 2, the second defendant could be said not to have complied with the rules of court and such non-compliance, according to the learned trial Judge, was a mere irregularity which was not fatal to the application before him. Also, the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 207 a learned trial Judge gave as one of the reasons that the first defendant had waived its right to complain after having entered appearance and that it had not been shown that the b first defendant had suffered any detriment by the use of the wrong form. The learned trial Judge did not stop there but had resort to the United Kingdom Rules under section 12 of the High c Court Law (Cap 52) Volume 3 of the Laws of Lagos State by invoking the provisions of Order 2 Rule 1 of the Rules of the Supreme Court of England which reads thus:– “2(1) Where . . . at any stage in the course of or in connection d with any proceedings there has, by reason of anything done or left undone, been a failure to comply with the requirements of these rules, whether in respect of time or in any other respect, the failure shall be treated as an irregularity and shall not nullify . . . any document” (italics e mine) to rule that non compliance with what type of form to use was a mere irregularity which should not prevent the need to do substantial justice. f Upon challenge by the learned Counsel for the first defendant/appellant that the person who deposed to the affidavit was a litigation clerk in the chamber of the learned Counsel for the respondent at the trial court, and therefore not com- g petent to swear to the supportive affidavit, the learned trial Judge held that the person who swore to the affidavit was a competent deponent once it could be ascertained as it had been that the affidavit was sworn to before the Commis- h sioner of Oaths duly authorised in that behalf. On the whole, the learned trial Judge examined the defence of the first defendant against the background of the application for summary judgment before him, pursuant to the i Order 10 procedure and held that, although the statement of claim was not specially indorsed on the writ as it should be using Form No. 2, Form No. 1 used was valid since the writ and the statement of claim were served on the first defendant j together at the same time. He thereafter made an order for [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 208 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. leave to enter final judgment against the first defendant in a the following terms:– “1. Judgment is hereby entered in favour of the plaintiff against the first defendant as an ACCEPTOR for the sum of b N3,437,500 (Three Million, Four Hundred and Thirty Seven Thousand, Five Hundred Naira) made up as follows:– (i) N2,750,000 (Two Million, Seven Hundred and Fifty Thousand Naira) being total value of four (4) Promis- c sory Notes due up to 29th October, 1988. (ii) N687,500 (Six Hundred and Eighty Seven Thousand, Five Hundred Naira) being value of promissory Note exhibit KOC ‘2’ which is payable on the 29th January, d 1989, that was yesterday. 2. It is hereby ordered that the first defendant pay to the plaintiff the undermentioned PROMISSORY NOTES on the due dates:– e (a) A sum of N687,500 due on 29th April, 1989 (b) A sum of N687,500 due on 29th July, 1989 (c) A sum of N687,500 due on 29th October, 1989 (d) A sum of N994,585 due on 29th January, 1990 f 3. The plaintiff claims interest at the rate of 14% per annum. This figure or even payment of interest has not been challenged. The learned Counsel for the first defendant did not address me on this issue and both the purported statement of defence and affidavit to show cause are silent on it. g I therefore enter judgment in favour of the plaintiff against the first defendant being interest at the rate of 14% per annum as follows:– (a) A sum of N96,250 being interest on N687,500 due on h 29/1/88. (b) A sum of N192, 500 being interest on N1,375,000 due on 29/4/88. (c) A sum of N288,750 being interest on N2,750,000 due i on 29/10/88. Total amount of interest is N577,500. 4. The first defendant shall pay interest at the rate of 6% per annum on the said N3,712,500 as from today 30/1/89 until final payment.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 209 a Dissatisfied with the judgment, the first defendant appealed to this Court on the following grounds:– “1. The learned trial Judge erred in law when he entertained b and granted the application for summary judgment in respect of the action which was not initiated by virtue of specially indorsed writ under Order 3 Rule 4 of the High Court of Lagos Civil Procedure Rules contrary to the Provisions of Order 10 Rule 1 of the High Court of Lagos State Civil c Procedure Rules. PARTICULARS OF ERROR The application for summary judgment did not comply with laid down procedure, in that the writ of summons d initiating the action was not a specially endorsed writ under Order 3 Rule 4 of the High Court (Civil Proce- dure) Rules and by the prescribed Form 2 of Appendix A to the said Lagos High Court Rules contrary to the provisions of Order 10 Rule 1 of the High Court of Lagos e State (Civil Procedure) Rules which specifically provides for such application for summary judgment only where the writ of summons is specially endorsed under Order 3 Rule 4 of the High Court Rules. 2. The learned trial Judge erred in law and in fact when he f held that a litigation clerk is a person who can swear positively to the facts verifying the cause of action as envisaged in an application for summary judgment under Order 10 Rule 1 of the Lagos High Court Civil Procedure Rules, g 1972. PARTICULARS OF ERROR Order 10 Rule 1 of the High Court of Lagos (Civil Pro- cedure) Rules specifically provides that the summons for judgment must be supported by an affidavit made by the h plaintiff or a person who can positively swear to the facts verifying the cause of action. The litigation clerk is not a person envisaged by Order 10 Rule 1 of the Lagos State Civil Procedure Rules as a person who can swear i positively to the facts of the cause of action. 3. The learned trial Judge misdirected himself in law and in fact when he held that the objection against the format of the writ of summons was an objection to the format of the action itself and consequently a procedural defect that is j curable. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 210 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

PARTICULARS OF MISDIRECTION a Although the swearing of an affidavit before a Commis- sioner for Oaths cures the defect in form, the contents of an affidavit must conform with the Rules of evidence as b laid down in sections 85, 86 and 87 of the Evidence Act. The supporting affidavit to the summons for judgment particularly paragraphs 7 to 31 (both inclusive) contained facts which were not within the personal knowledge of the deponent, the litigation clerk and the source c of which were not stated in the affidavit contrary to sections 85 and 87 of the Evidence Act. The affidavit also contained conclusions and legal arguments contrary to section 86 of the Evidence Act. The d offending paragraphs of the affidavit ought to have been expunged. 4. The learned trial Judge erred in law and in fact when he held that the first defendant did not in its affidavit show cause to satisfy him that it has a good defence and conse- e quently gave judgment in favour of the plaintiff. PARTICULARS OF ERROR The first defendant having established triable defences by its affidavit to show cause, in which it stated the de- f fences of lack of consideration on the part of the plaintiff, lack of execution on its part and the failure to explore the provision on arbitration, the learned trial Judge ought to have granted leave to defend the actions g on its merit. 5. The judgment is against the weight of evidence.” Briefs were exchanged by the parties and the first defendant (now appellant) set down the following issues for the deter- h mination of the appeal:– “(a) Whether or not a plaintiff who does not predicate his claim on a Writ of Summons issued under Order 3 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 1972, i can take advantage of Order 10 Rule 1 of the same Rules of Court. (b) Whether or not a person who from the circumstances of a case, cannot reasonably be said to be conversant with the hard facts of the case, should be allowed to swear to an j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 211 a affidavit in support of a summons under Order 10 of the Lagos High Court Rules, and (c) Whether or not the appellant’s statement of defence as b couched did raise weighty issues or disclose enough facts as to entitle them (sic) to defend the action generally.” Learned Counsel for the respondent also formulated five issues for determination as follows:– c “(1) Can Endorser who endorsed promissory notes deny the legal liability arising from same. (2) Can an appellant in possession of the 3 vessels of the plaintiff/respondent be justified to withhold the balance due on the vessels because the deponent of the affidavit to the d summons for judgment is a law clerk. (3) Whether the non-compliance with the rules on the use of Forms is not a mere irregularity which should not nullify the action. e (4) Whether the appellant’s statement of defence raise weighty issues or disclose enough facts as to entitle them to defend the action generally. (5) What is the proper sum to be paid in the circumstance of the f special case?” At the hearing of the appeal, Counsel relied on their respective briefs. The issues postulated by the appellant are in my respectful view adequate to dispose of the appeal. g The first contention in this appeal is whether the learned trial Judge was right in holding that the application under the Order 10 procedure before him was right even though Form No. 1 was used instead of the specially indorsed writ (Form h No. 2) under Order 3 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 1972. Although the learned trial Judge gave various reasons for regarding the non-use of Form No. 2 (specially indorsed i writ) as a mere irregularity, pointing out also that no injury or detriment has been suffered by the appellant, having taken resort to the United Kingdom Rules that the failure to comply should be treated as an irregularity and not to nullify j the proceedings, he then came to the conclusion that strict [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 212 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. adherence to such rules where it clashed with the fundamen- a tal objective of a court in the attainment of justice, the court would adopt a liberal interpretation of those rules. I am of the strong view that it makes no difference whichever of the b two forms were employed. What the law provides is that the writ of summons be accompanied by a statement of claim. One major difference between the two forms employable is that, in the case of Form No. 2, there is also a statement of c claim indorsed or attached, whereas, in Form No. 1, there is no such indorsement of the statement of claim. In the instant case, although the statement of claim was not indorsed on the writ, the statement of claim and the writ d were served together and it appeared that the writ of summons is thus accompanied by the statement of claim and the two were served on the first defendant (appellant). Under Order 10 Rule 1(a) which deals with judgment on e the writ where the defendant appears to a writ of summons specially indorsed with or accompanied by a statement of claim under Order 3 Rule 4, it seems to me that a plaintiff may apply for summary judgment where either the writ was f specially indorsed or, as in this case, accompanied by a statement of claim. The word “or” appearing between “indorsed with” and “accompanied by” seems to be disjunctive and used to express an alternative or to give a choice of one g among the two. In other words, even where Form No. 1 is used, provided it is accompanied by a statement of claim, the Order 10 procedure comes into play (see Ogunbi v. Kosoko (1991) 8 N.W.L.R. (Part 210) 511). h The writ of summons with which the plaintiff (respondent) commenced this action, accompanied by a statement of claim, entitles the plaintiff to apply for leave to enter summary (final) judgment against the defendants pursuant to i Order 10 Rule 1 of the High Court of Lagos State (Civil Procedure) Rules, 1972, notwithstanding the fact that Form No. 2 was put in another form. A plaintiff who does not predicate his claim on a writ of summons specially indorsed j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 213 a can take advantage of Order 10 Rule 1 of the same rules provided the writ is accompanied by a statement of claim and an affidavit that the defendant has no defence. b The second issue for determination is rather interesting. It is to the effect that a litigation clerk in the respondent’s solicitor’s chambers swearing to an affidavit to be used in seeking for a summary judgment is not a person qualified, c according to the learned Counsel for the appellant, to swear to an affidavit of that magnitude. The clerk, according to the learned Counsel for the appellant, cannot be said to have personal knowledge of the facts d he averred to in the affidavit nor could he be said to have understood the averment considering the complexity of the case. He pointed out that the litigation clerk could not be telling the truth when he stated that his duty as a law clerk e enabled him to know the facts of this case to the detail and depth to which he has averred in the affidavit. Learned Counsel for the appellant then capped it by chal- f lenging the exercise of discretion by the learned trial Judge by suggesting that, since the affidavit was intended to obtain judgment without hearing parties orally, judicial sense demands that the trial Judge should exercise caution and insist g that a more qualified person ought to have been the deponent of the supporting affidavit to give the affidavit more authority and validity. No authority was however referred to for such proposition. h The learned trial Judge decided that Segun Stephen, the litigation clerk in the chambers of Counsel for the respondent, was a competent deponent to the affidavit sworn to before a Commissioner for Oaths duly authorised to take i oath. What Order 10 Rule 1(1) provides is:– “. . . The plaintiff may on affidavit made by himself or by any other person who can swear positively to the facts, verifying the j cause of action and the amount claimed (if any liquidated sum is [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 214 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

claimed), and stating that in his belief there is no defence to the a action . . .” Judging by the provisions of the rule quoted above, there is nothing to suggest the quality of a deponent. What is re- b quired is an affidavit which may be made by any other person who can swear positively to the facts and stating his belief that there is no defence to the action. However, I quite agree with the submission of the learned Counsel for the c appellant that the learned trial Judge committed an error of misconception and veered into the bush by holding that, though the affidavit was defective, it can be cured by the provisions of section 83 of the Evidence Law. No defect was d suggested. I think what is more important is that the deponent has got authority to depose to the affidavit and that he swears positively to the facts and, being so authorised, expresses his e belief that there is no defence to the action. The submission that common sense demands that the trial Judge should exercise caution and insist that a more qualified person in the establishment of the respondent to swear f to the affidavit so as to give the affidavit more authority and validity is a novelty which is not backed by any authority. Such remark as “common sense demands” directed at the trial Judge is unnecessarily impertinent which is not an at- g tribute of sound advocacy. It is sufficient to say that the submission is a bit tenuous. The last issue posed by the appellant is whether or not the h appellant’s statement of defence as couched raised weighty issues or disclosed enough facts to enable the appellant to defend the action. It was contended by the learned Counsel for the appellant that the gist or gravamen of the defence proffered by the appellant was that it neither guaranteed nor i indorsed the promissory notes which were the subject-matter of the action. The appellant conceded that it simply confirmed the signatures on the promissory notes as requested for by the respondents. It was also suggested that the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 215 a appellant would have contended, if the matter went to trial, that it was not liable as indorser unless its signature appeared on the back of the promissory notes. b Learned Counsel for the appellant also raised the question of lack of consideration for signing the promissory notes. He submitted that all these issues were substantial points of law which ought to have compelled the trial Judge to give the c appellant unconditional leave to defend the action as what was necessary to be disclosed by the appellant was not a complete defence but a fair probability of a defence. In answer to this point, learned Counsel for the respondent d submitted that there was no ambiguity as to the capacity of the appellant in indorsing the promissory notes. The mere signatures of the two top executives of the appellant (bank) on the face of the promissory notes was adequate indorse- e ment. It was known to all the parties that, without the indorsement of the promissory notes by the first defendant (appellant), the bill of sales of the vessels would not have been released to the second defendant by the plaintiff (re- f spondent). The respondent, on seeing the indorsement released the bill of sales directly to the appellant on the receipt of the promissory notes duly and adequately indorsed by the appellant. g The learned trial Judge in determining this case noted that it was not in dispute that the first defendant (appellant) put or indorsed its signature on the face of the promissory notes. He cited section 85(1) and (2) of the Bills of Exchange Act, h (Cap 35) Laws of the Federation of Nigeria, 1990, which provided thus:– “85.(1) A promissory note is an unconditional promise in writing, made by one person to another, signed by the maker, i engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer. (2) An instrument in the form of a note payable to maker’s order is not a note within the meaning of this section j unless and until it is endorsed by the maker” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 216 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. to hold that it was evident on the face of exhibits KOC2– a KOC10 that they were indorsed by the appellant and therefore it was liable. The learned trial Judge said that, where a person signed an instrument otherwise than as a maker, b drawer or acceptor, he incurred the liability of an indorser to a holder in due course, adopting the proposition of the law as contained in paragraphs 477 and 479 at page 211 of Hals- bury’s Laws of England. c But, on a perusal by me, I found that the learned trial Judge made a mistake, or perhaps one can say that it is the printer’s devil, by stating section 85 when he meant to say section 87(1) and (2). Be that as it may, the relevant section to this d legislation and which can be said to be reasonably intended by the learned trial Judge is and must be section 87 of the Bills of Exchange Act. e This case requires a thorough examination because it involves a consideration of promissory notes and the provision of the Bills of Exchange Act. A promissory note has been defined in section 85 of the Bills of Exchange Act (which f shall hereinafter be referred to as the “Act”) as “an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed and determinable future time, a sum certain in money g to, or the order of, a specified person or to bearer”. Section 3 of the Act also defines a bill of exchange as “an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determin- h able future time a sum certain in money or to the order of a specified person, or to bearer”. By section 55(2)(a) of the Bills of Exchange Act 1917, Chapter 35:– i “The endorser of a bill by endorsing it engages that on due presentment it shall be accepted and paid according to its tenor, and that if it be dishonoured, he will compensate the holder or a subsequent endorser who is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 217 a Section 91(1) and (2) of the same Act also reads:– “91(1) Subject to the provisions in this part of this Act, and except as by this section provided, the provisions of this b Act relating to Bills of Exchange apply, with the necessary modifications, to promissory notes. (2) In applying those provisions the maker of a note shall be deemed to correspond with the acceptor of a bill, and the c first endorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer’s order.” This shows in effect that a promissory note is also like a bill d of exchange, and it is governed by the Bills of Exchange Act. From my understanding, a promissory note means almost e what it said, that is: “I promise to pay another a sum specified at a fixed and determinable future time.” Whereas a bill of exchange means that: “I have made a conditional order which I have signed asking the person to whom I addressed the order to pay me or to pay any other person a sum certain f in money at a fixed or determinable future time.” A bill of exchange is, therefore, like a cheque drawn on the bank to pay a third party. A promissory note means: “I owe you some specific amount and I shall pay it at an ascertainable g date.” In this case, the question of facts must be decided before I consider the law of this case. The question is whether the h appellant by putting its signature on the promissory notes intended to become liable to the respondent in the event of the promissory notes becoming unpayable by the second defendant (the original debtor at the trial court). i It is the law that a third party signing the bill or promissory note other than as drawer or acceptor must be held to have incurred liabilities of an indorser to a holder in due course (see the case of Gerald McDonald and Co v. Nash and Co j (1924) All E.R. 601). [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 218 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Appending a signature to a document of the type admitted a in this case, i.e. exhibits KOC2–10, appearing at pages 36 to 44 of the record, by the appellant is tantamount to an indorsement not in the sense that it was assigning or trans- b ferring its benefit to anybody, but indicating that it has accepted by that signature on the document to become liable to the respondent in all effects. Indorsement here loosely used implies signing on the documents which in this case are c promissory notes.

The case of Gerald McDonald v. Nash (supra) is highly instructive and afford a direct authority capable of justifying the conclusion reached by the learned trial Judge and be- d cause of the complexity of the Mercantile Law and its application to facts of any case, I intend to put down here in this judgment the brief resume of what happened and was decided in that case. e

In May 1920, the appellants sold to A and Co 19,000 cases of tinned soup at the price of 10s. per case, each against delivery order. A and Co, being unable to find the money, f applied for financial assistance to the respondents, who undertook as between themselves and A and Co to find 75% of the money, there being then about 16,000 cases which had not been taken up. On 10th August, 1920, at a meeting g between the appellants, the respondents and A and Co, it was agreed that the respondents should indorse a series of eight bills of exchange, seven for £1,000 each and one of £117 odd, to be drawn by the appellants on A and Co pay- h able six months after date to the appellants’ order, and that the appellants, in consideration of the bills being duly indorsed by the respondents, should hand to the respondents delivery orders for the balance of the cases. These bills were at once drawn by the appellants on A and Co, expressed to i be payable to the appellants’ order, and were accepted by A and Co and indorsed by the respondents. Room was left above the name of the respondents for the indorsement of the name of any person to whom the appellants should direct j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 219 a payment. The respondents then handed the bills to the appellants in exchange for the delivery orders. One bill having been discharged, the appellants shortly before the remaining b bills became due indorsed their name as payee on the bills above the respondents signature. The appellants duly presented the bills to A and Co, who dishonoured them. They then gave notice of dishonour and claimed payment for the c respondents, who denied liability. In an action by the appellants to recover the amount of the bills against the respondents as indorsers, it was held: (1) on the facts that the respondents must be taken to have intended d to make themselves liable to the appellants on the bills; (2) that the bills, when handed to the appellants, were wanting in a material particular within the meaning of section 20 of the Bills of Exchange Act, 1882, by reason of the absence of e any indorsement by the appellants above the signature of the respondents, and that the appellants had implied authority to fill in their names as payees, as they did, over the name of the respondents; and that, when so filled up, the bills became f retrospectively enforceable. In Bernardi v. National Sales Corporation Ltd (1931) All E.R. 320, Bernardi, having indorsed as surety, was held bound by the bills and the fact that Bernardi signed after the g drawee was held to make no difference since the position of the signatures of the parties is immaterial. In Nash’s case, the court held that a bill to the drawer’s order, indorsed by a third party before an indorsement by the h drawer was a bill of exchange and that the third party by indorsing the bill has rendered himself liable to the drawer, he had impliedly authorised the drawer to give effect to that purpose by adding his own indorsement. i The learned trial Judge held that the appellant advanced no real defence before deciding to enter judgment in favour of the respondent and, having considered all the matters in this case, I come to the conclusion that that judgment cannot be j impeached. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Sulu-Gambari JCA 220 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In the circumstance, the appeal fails and it is hereby dis- a missed. I award N2,000 costs in favour of the respondent. PATS-ACHOLONU JCA: The plaintiff/respondent has instituted an action under Order 10 of the High Court of Lagos b State (Civil Procedure) Rules for a summary judgment against the defendant/respondents claiming as follows in the specially indorsed writ:– “From the first defendant the sum of N2,062,500 (Two Million, c Sixty-two Thousand and Five Hundred Naira only) being the total value of the first, second and third promissory notes of N687,500 each which have been due and presented but dishonoured. (ii) Against the second defendant the sum of N4,432,085 (Four d Million, Four Hundred and Thirty-two Thousand, Eighty- five Naira only being the total value of the remaining promissory notes Nos. 4 to 9 inclusive and the variation on same as of the date of this writ and in accordance with clause 3 Appendix of the said Agreement dated 28th August, 1987 e whose breach by the first defendant’s failure to honour its confirmation and guarantee renders the whole sum in the Agreement due. IN THE ALTERNATIVE. f (iii) Against the first and second defendants, the return of the Bills of sales on the Vessels MT Agbeke and MT Aina and in addition the sum of N3,000,000 (Three Million naira only) being the sum due to loss of use of the vessels since 28th August, 1987 to date, in accordance with clause 13 of g the said Agreement. (iv) Against the first defendant, the sum of N1.5 million naira only being general damages due to the plaintiff in accordance with clause 3 of the said Agreement. h (v) Against the first and second defendants jointly and severally interest at 18% from 29th January, 1988 to the date of judgment in this suit or until the whole sum is liquidated for cash to the plaintiff as holder in due course for value of promissory notes dated 29/1/88; 29/4/88; 29/7/88; 29/10/88; i 29/1/89; 29/4/89; 29/7/89; 29/1/89 and 29/1/89 drawn by the second defendant as debtor to the plaintiff and indorsed and confirmed by the first defendant as ACCEPTOR AND GUARANTOR of the second defendant in respect of the said promissory notes. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 221 a (vi) And for interest on the amount found to be due to the plaintiff at 6% interest or such rate and for such period as may seem to the court just and proper from the date of judgment. b (vii) A declaration by the court that the second defendant’s failure to provide the guarantee as required under clause 3(b) of Appendix B extinguishes their rights of claim, if any, to the vessel or trawler MT. Alimu.” c The respondent equally filed pleadings and the appellant company entered appearance and filed a statement of claim out of time. Thereupon the plaintiffs moved for summary judgment, a step which induced the appellant no doubt to d apply for extension of time to file a statement of defence and which it followed up with an affidavit to show cause, filed on 2nd December, 1988. I hereby set out the averments contained in 7–13 of that affidavit:– e “7. That at all material time[s], the first defendant acted as banker to the second defendant and performed its duties vis- à-vis the plaintiff only on the instruction of the second defendant. f 8. That the first defendant did not GUARANTEE OR ACCEPT the payment of the promissory notes as alleged in the affidavit in support in the summons for judgment. 9. That all the first defendant did in respect of the promissory notes was to identify and confirm the signatories of the g second defendant company on the promissory notes as requested by the plaintiff to the first defendant vide their letter dated 28th August, 1988. The copy of the letter is herewith attached and marked exhibit ‘A’. h 10. That the first defendant did not enter into any contract with the plaintiff over the promissory notes, and there was no consideration whatsoever from the plaintiff to the first defendant over the promissory notes. i 11. That the confirmation of the signatories of the second defendant company on the promissory notes was a mere administrative service given to a customer under normal banking duties which does not make the first defendant part of the contract between the plaintiff and the second defen- j dant. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 222 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

12. That to the best of my knowledge and belief, wherever our a bank the first defendant enters into a contract the seal of the bank be affixed on the document evidencing such contracts. 13. That the promissory notes exhibited by the plaintiffs in their b affidavit in support of the summons as KOC ‘2’–KOC ‘10’ did not contain the company seal of the first defendant bank.” It might be stated here that even in this statement of defence c Messrs JSB, the appellant, averred as follows:– “Para. 6 Contrary to the allegation contained in para. 6 of the statement of claim, the first defendant did not accept or guarantee the payment of the promissory notes made by the second defendant/appellant. d Para. 7 Further to para. 6 hereof the first defendant will prove at the trial of this action that it merely identified and confirmed the signatories of the second defendant company on their said promissory notes as requested by the plain- e tiff vide their letter dated 28/8/87. Para. 8. The first defendant wrote a letter dated 7/9/87 to the plaintiff’s banker Messrs Savannah Bank Nig. Ltd confirming the signatories of the defendant company as per f their request of the plaintiff on their said letter of 28/8/87 afore mentioned.” The court on 8th December, 1988 heard the Counsel for the parties, in a summons for judgment and other applications. g In his argument in the court below, Counsel for the first defendant, Olateru Olagbegi, reminded the court that the first defendant was not an acceptor, not a party and not a guarantor, adding further that the application for judgment h had no basis having regard to the fact that the claim in the writ of summons in the court was N2,062,000 while the judgment summons was for the sum of N6,494,585. An objection to the affidavit of the plaintiff/respondent was that it was sworn to by a clerk of a Counsel who ordinarily could i not be expected to be in real possession of the facts to what he deposed to like an officer of the company. After hearing the parties, the court entered judgment against the first defendant on the addresses of the Counsel. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 223 a Being dissatisfied with the judgment of the court below, the first defendant appealed to this Court and formulated three issues for determination, which are:– b “(a) Whether or not a plaintiff who does not predicate his claim on a Writ of Summons issued under Order 3 Rule 4 of the High Court of Lagos State (Civil Procedure) Rule 1972, can take advantage of Order 10 Rule 1 of the same Rules of Court. c (b) Whether or not a person who from the circumstances of a case, cannot reasonably be said to be conversant with the hard facts of the case, should be allowed to swear to an affidavit in support of a summons under Order 10 of the La- gos High Court Rules, and d (c) Whether or not the appellant’s statement of defence as couched did raise weighty issues or disclose enough facts as to entitle them (sic) to defend the action generally.” Learned Counsel for the respondents also formulated five e issues for determination as follows:– “(1) Can endorser who endorsed promissory notes deny the legal liability arising from same. (2) Can an appellant in possession of the 3 vessels of the plain- f tiff/respondent be justified to withhold the balance due on the vessels because the deponent of the affidavit to the summons for judgment is a law clerk. (3) Whether the non-compliance with the rules on the use of forms is not a mere irregularity which should not nullify the g action. (4) Whether the appellant’s statement of defence raise weighty issues or disclose enough facts as to entitle them to defend the action generally. h (5) What is the proper sum to be paid in the circumstances of the special case.” Now I do not intend in this matter to concern myself with the issues as to whether or not the correct form was used as much as to whether the court below should have really tried i the matter in the summary form having regards to the plethora of documents filed by the first appellant to seek to show its keenness to have the case adjudicated on its merits, more especially the fact that a mere clerk in the chambers of a j Counsel deposed to an affidavit which it stated ought to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 224 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. have been deposed by one who should have stated positively a the facts as he knew them. The crucial point is what the court below said in relation to the appellant’s liability in this matter in the judgment appealed against. b It seems to me that the denial of liability of the first defendant on the promissory notes in exhibits KOC 2–KOC 10 arises out of its misconception of this law which I concede is both technical and complex. I shall attempt to restate the c law. The necessary parties to a bill are:– “(i) The party giving the order who must sign it and who is called the drawee. (ii) The party to whom the order is given who is called the drawer. d (iii) And who on assenting to the terms of the order and signing it is called the acceptor.” Under and by virtue of section 89(2) of the Bills of Ex- change Act “the maker of a note shall be deemed to corre- e spond with the acceptor of a bill and the first endorser of a note shall be deemed to correspond with the drawer of an accepted bill payable to drawer’s order”. It is not in dispute that the first defendant put or indorsed f its signature on the face of the promissory notes. The law is that where a person signs an instrument otherwise than as a maker, drawer or acceptor, he incurs the liabilities of an indorser to a holder in due course. g Again section 85(1) and (2) of the Bills of Exchange Act (Cap 21) provide:– “85(1) A promissory note may be made by two or more makers, and they may be liable thereon jointly, or jointly and sev- h erally, according to its tenor. (2) Where a note runs ‘“I promise to pay’ and is signed by two or more persons it is deemed to be their joint and several note.” Now, what is a promissory note? It is a mere promise in i writing to pay a specified sum at a time therein limited or on demand or at sight to a person therein named or to his order or bearer. It is an unconditional written promise signed by the maker to pay absolutely and at all events a sum certain in j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 225 a money either to the bearer or to a person therein designated or his order, at a time specified therein or at a time which must certainly arrive. Therefore, by making a promissory b note, the maker undertakes that he will pay it according to its tenor (see Walton v. Mascall (1844) 13 M and W 458). The maker shall therefore be estopped from denying to a holder in due course the existence of the payee and his then c capacity to indorse (see Brayton v. Bale (1923) 2 B and C 293). So an indorser by indorsing a bill undertakes that on due presentment it will compensate the holder or a subsequent indorser who is compelled to pay it provided that the requisite proceedings on dishonour are duly taken. The ap- d pellant contends that it did not indorse the promissory notes, that it only identified and confirmed the signatories of the second defendant company on the promissory notes as requested by the plaintiff to the first defendant by their letter e dated 28th August, 1988. I have carefully looked at exhibits MOC2–10. What is the effect of the appellant’s indorsement to the effect that “the f Federal Savings Bank of 23, Awolowo Road, Ikoyi, Lagos hereby add our confirmation” in all the promissory notes? Although the first appellant contended that it indorsed no promissory notes, I find no alternative interpretations to its appending its signature on those documents. The tenor and g intendment is that the Federal Savings Bank is now guaran- tying due payment. At paragraph 479 of Halsbury’s Laws of England (4ed), the learned authors states as follows: h “Where a person signs an instrument otherwise than as a maker drawer, or acceptor, he incurs the liabilities of an indorser to a holder in due course. But if there is ambiguity as to the capacity in which a party signed an instrument, the whole facts and circumstances attendant upon the making, issue, and transfer of the in- i strument may be legitimately referred to for the purpose of ascertaining the true relation of the parties to each other and those reasonable inferences, derived from those facts and circumstances are admitted to the effect qualifying, altering or even inverting the relative liabilities which the law merchant would otherwise assign j to them. See MacDonald v. Whitfield (1883) 8 A.C. 733 at 745 and [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Pats-Acholonu JCA 226 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

also Yeoman Credit Ltd v. Gregory (1963) 1 All E.R. 245. This a ambiguity as to the true relation of the parties arise in relation to bills which are backed or which are accommodation bills. In the case of such a bill, the signature of a relation or friend of the acceptor for whose accommodation the bill is drawn placed on the b back of the bill, constitutes the party an indorser of the bill, and it is immaterial, whether the drawer who advances money to the parties accommodated on the strength is placed on the back of the bill.” c I find it difficult to place any other construction to the act of the appellant on the promissory note at the dates stated therein. It is important to note that due to increasing use of promissory notes and bills of exchange, the court have al- d ways treated these documents as more or less cash. To appreciate this point, it should be stated that ordinary cheques used to cash money in the banks fall into this category. Thus in Fielding and Plant v. Najjar (1969) 2 All E.R. 150, Lord e Denning said “we have repeatedly said in this Court that a Bill of Exchange or promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary”. Besides, even from the affidavit of the appellant f in the court below, it has at all times acted as a banker of the second defendant. Therefore the indorsement made shall be construed to be in the course of its normal operations. There is no basis for denial of liability. There is no merit in g the case. I therefore agree with the argument and conclusion of my learned brother, Sulu-Gambari JCA. This appeal is dismissed with costs assessed at N2,000. h UWAIFO JCA: (Dissenting) I have found myself unable to agree with the judgment of my learned brother, Sulu- Gambari JCA, just delivered and I very much regret that. I confess that the issues of law in this case as to liability aris- i ing from negotiable instruments look a bit technical. In certain cases the precise character and consequent liabilities of the parties to a bill of exchange, and the addressee who accepts it, are fixed by the tenor of the document. In other j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 227 a cases these cannot be ascertained without the aid of proof by allowing the cases to go to full trial. These situations also attend to promissory notes. It must, for instance, be clearly b shown who is an acceptor of a bill or a first indorser of a note, what amounts to an indorsement, who is a holder in due course and the like. Once the perception of these is clear in any given situation, what may appear technical becomes c just a matter of applying the law merchant to all the relevant facts placed before the court. This is what I think was not allowed to happen in this case. In this appeal from the decision of Olorunnimbe J of the d Lagos High Court given on 30th January, 1989 I believe that some basic errors were made. I think they are two. The first is that he regarded the promissory notes in question as bills of exchange which they are not in the circumstances of this e case. That mistake led him to consider the first defendant/ appellant as an indorser of the said promissory notes and the plaintiff/respondent as a holder in due course. This first error is quite significant. The second error is really a by- f product of the first error identified above. It is a procedural error as to the applicability of summary judgment on the facts of this case. It must look strange that I characterise it as a by-product. I shall have to explain this later. g The facts relevant for the main issue in this case are that certain promissory notes, nine in number, were issued by the second defendant to the plaintiff. The first defendant/ appellant added its confirmation. It is sufficient to reproduce h the first of the promissory notes which is a prototype of the others, though each matured on different dates at three- monthly intervals. It is as follows:– “PROMISSORY NOTE i MATURITY: 29/1/88 No. 1 EXCHANGE FOR VALUE: N687,500 On the 29th day of January, 1988 we Agricultural and Food Proc- j essing Installations Limited of 2/4 Customs Street, Lagos hereby [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 228 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

promise to pay to Imano Nigeria Limited of Aina House, Iju Road, a Lagos the sum of six hundred and eighty seven thousand five hundred Naira (N687,500). (SGD ? (SGD) ? b (For and on behalf of AGRICULTURAL and FOOD PROCESS- ING INSTALLATIONS LIMITED ACCEPTED BY IMANO NIGERIA LIMITED (SGD)? c (for and on behalf of IMANO NIGERIA LIMITED AINA HOUSE IJU ROAD AGEGE.) We Federal Savings Bank of d 23 Awolowo Road Ikoyi Lagos. HEREBY ADD OUR CONFIRMATION. (SGD) ? Managing Director e Federal Savings Bank Lagos.” It appears five of the promissory notes were honoured. Four were not. Three of the four were each for N687,500 due on f 29th April, 29th July and 29th October, 1989 respectively. The fourth was for N994,585 due on 29th January, 1990. The plaintiff then brought action against the Federal Savings Bank Limited as first defendant and the Agricultural and g Food Processing Installations limited as second defendant. The action was filed on 4th August, 1988, ahead of the maturity dates of the last two promissory notes. That fact is not an issue in this appeal. On 30th January, 1989, judgment h was given against the first defendant in favour of the plaintiff for N3,712,500. Interest at the rate of 6% per annum was awarded on the judgment debt until it was finally liquidated. The learned trial Judge calculated interest on the sum claimed at 14% per annum up to the date of judgment al- i though I confess I do not understand the basis of his calculation. He stated it thus:– “(a) Sum of N96,250 being interest on N687,500 due on 29/1/89 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 229 a (b) A sum of N192,500 being interest due on N1,375,000 due on 29/4/88. (c) A sum of N288,750 being interest due on N2,750,000 b due on 29/10/88. Total amount of is (?) The first defendant shall pay interest at the rate of 6% per annum on the said N3,712,500 as from today 30/1/89 until final payment.” c It was a summary judgment under the procedure provided in Order 10 of the High Court of Lagos State (Civil Procedure) Rules, 1972. d The first defendant in its appellant’s brief has raised the following issues for determination:– “(a) Whether or not a plaintiff who does not predicate his claim on a Writ of Summons issued under Order 3 Rule 4 of the e High Court of Lagos State Civil Procedure Rules, 1972, can take advantage of Order 10 Rule 1 of the same Rules of Court. (b) Whether or not a person who from the circumstances of a case, cannot reasonably be said to be conversant with the f hard facts of the case, should be allowed to swear to an affidavit in support of a summons under Order 10 of the La- gos High Court Rules, and (c) Whether or not the appellant’s statement of defence as g couched did raise weighty issues or disclose enough facts as to entitle them to defend the action generally.” In opposing the application for summary judgment, the first defendant stated its relationship with the second defendant h as that of banker and customer. It deposed further as to how it came to add its confirmation to the promissory notes. I shall reproduce only two of the relevant paragraphs which read:– i “8. That the first defendant did not Guarantee or Accept the payment of promissory notes as alleged in the affidavit in support in the summons for judgment. 9. That all the first defendant did in respect of the promissory notes was to identify and confirm the signatories of the j second defendant/company on the promissory notes as [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 230 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

requested by the plaintiff to the first defendant vide their a letter dated 28th August, 1988. The copy of the letter is herewith attached and marked exhibit ‘A’” (emphasis mine). b The learned trial Judge went on the basis that the promissory notes in question were bills of exchange. That can be found in some of his pronouncements. He referred to the definition of “promissory note” in section 83(1) of the Bills of Ex- c change Act (Cap 35) Laws of the Federation of Nigeria, 1990 and in Halsbury’s Laws of England (4ed) paragraph 306 and said:– “It is a specie of a Bill of Exchange and it is governed by Bills of d Exchange Act Cap 21 Volume I of the Laws of the Federation and Lagos, 1958 with some modifications and exceptions. It seems to me that the denial of liability of the first defendant on the promissory notes in exhibits KOC2–KOC10 arises out of its misconception of this law which I concede is both technical and e complex. I shall attempt to restate the law. The necessary parties to a bill are:– (i) The party giving the order who must sign it and who is called the drawer. f (ii) The party to whom the order is given who is called the drawer (sic). (iii) And who on assenting to the terms of the orders and signing it is called the acceptor.” g Under and by virtue of section 89(2) of the Bills of Ex- change Act:– “The maker of a note shall be deemed to correspond with the acceptor of a bill and the first endorser of a note shall be deemed to h correspond with the drawer of an accepted bill payable to drawer’s order. It is not in dispute that the first defendant put or endorsed its signature on the face of the promissory notes. The law is that where a person signs an instrument otherwise than as a maker, drawer or i acceptor, he incurs the liability of an endorser to a holder in due course.” Thereafter the learned trial Judge discussed the effect of a bill of exchange and the liability of an indorser of it. He j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 231 a came to the conclusion that by putting its signature on the promissory notes in question, the first defendant thereby indorsed them. He relied on the law as stated in paragraph b 477 of Halsbury’s Laws of England (supra) which says that the indorser of a bill by indorsing it undertakes that, on due presentment it will be accepted, and paid according to its tenor, and that, should it be dishonoured, he will compensate c that holder or a subsequent indorser who is compelled to pay it, provided that the requisite proceedings on dishonour are duly taken.

I think it is necessary to state the difference between a bill d of exchange and a promissory note. For a negotiable instrument to be a bill of exchange, there must be three parties, namely (1) the party giving the order, who must sign it as the drawer; (2) the party to whom the order is given, who is e called the drawee, and who on assenting to the terms of the order and signing it is called the acceptor; and (3) the party to whom the money is to be paid, who is called the payee, or, if the bill be expressed to bearer, the bearer (see para- f graph 309 of Halsbury’s Laws of England (supra) (emphasis mine); and section 3 of the Bills of Exchange Act). Whereas a promissory note requires two parties for it to come into being, namely, (1) the person who gives the promise, and g who is called the maker; (2) the person to whom the note is given, and who is called the payee (see paragraph 314 of Halsbury’s Laws of England and section 85(1) of the Bills of Exchange Act). It is also stated in that paragraph that: “In h the application of the law relating to bills to a promissory note, the maker of a note is deemed to correspond with the acceptor of a bill and the first indorser of a note is deemed to correspond with the drawer of an accepted bill payable to drawer’s order” (see also section 91 Bills of Exchange Act). i Obviously a promissory note is not a bill of exchange. But the law relating to bills of exchange apply to promissory notes under certain conditions as a passage in paragraph 314 j of Halsbury’s Laws of England reproduced above shows. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 232 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

This is clearly provided for in section 91(1) of the Bills of a Exchange Act. Section 91(2) goes further to provide that, in the application of the Bills of Exchange Act to a promissory note, the maker of the note is equivalent to the acceptor of a b bill; the first indorser is equivalent to the drawer of an accepted bill payable to drawer’s order. As is well known, an acceptor of a bill is a drawee (i.e. the person to whom the bill is directed) who has signified that he will honour the c bill. The drawer of an accepted bill is the person who passes it on or negotiates it to another party who may be a holder in due course or a holder for value without notice. In terms of a promissory note, the maker is the promisor (just as an accep- d tor of a bill promises to honour it (promisor)); the person to whom the maker of a note delivers it is in effect the promisee. If that person becomes the first indorser of the note, he is like the drawer of an accepted bill. By “indorsement” in that sense is meant the writing by a transferor on a bill or e note (which by definition already has three parties or two parties respectively and has thus come into being as an instrument) of his name and delivery of it to a transferee. In other words, that transferor is the indorser and the trans- f feree is the indorsee. The indorsee could be a holder or a holder for value or a holder in due course (see paragraphs 307 and 308 Halsbury’s Laws of England). Special meanings are attached to these terms. g I think it was an error on the part of the learned trial Judge to have regarded the signature of the first defendant on the promissory notes as an indorsement and the plaintiff by h inference as a holder in due course. It was on this premise that he held the first defendant to be the first indorser and therefore liable. As has been shown, the plaintiff cannot by any means be regarded as a holder in due course nor the first defendant an indorser in the circumstances. A holder in due i course has been defined to mean “a holder of a bill of exchange, cheque, or promissory note, complete and regular on the face of it, who takes it in good faith and for value before it is overdue, and without notice either of its previous j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 233 a dishonour or of any defect in the title of the person who negotiated it to him” (emphasis mine) (see paragraph 308 of Halsbury’s Laws of England; section 29 of the Bills of Ex- b change Act). It has been held that an original payee (like the plaintiff in the present case) is not a holder in due course (see R.E. Jones Ltd v. Waring and Gillow Ltd (1926) A.C. 670). c It is true as said by the learned trial Judge that, where a person signs an instrument otherwise than as a maker, drawer, or acceptor, he incurs the liabilities of an indorser to a holder in due course (see paragraph 479 of Halsbury’s d Laws of England; section 56 of the Bills of Exchange Act). This must however be clearly understood to mean when the instrument has been negotiated and transferred to a third party, on the basis and by virtue of the indorsement, and the e third party takes it in good faith and thus became a holder in due course. Such holder in due course has a cause of action against the person who so indorsed or signed the instrument. There was no suggestion that the first defendant was a co- maker of the promissory notes, and such suggestion could f hardly be made (see section 87 of the Bills of Exchange Act); nor as I have tried to show could the first defendant be an indorser to the plaintiff (the very promisee). The learned trial Judge having erroneously, with due respect, held the g view that in law the first defendant had no defence because of its signature on the promissory notes thought that he could give summary judgment under the Order 10 procedure. It was in this light I said at the beginning of this judg- h ment that the procedural error for coming under Order 10 was a by-product. This was a direct result of the view held that the first defendant was an indorser of the said promissory notes and the plaintiff a holder in due course. There- i fore, in that situation there would be no defence and the Order 10 procedure could be justly applied. That is an error founded upon an error. I now come to the substance of the defence raised by the j first defendant. I set out earlier on two of the paragraphs of [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 234 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the affidavit indicating, in effect, that it neither guaranteed a nor accepted to pay the promissory notes. What it said happened was a request by the very plaintiff by letter dated 28th August, 1988 that the first defendant do “identify and con- b firm the signatories of the second defendant company” in relation to the promissory notes. In my view, if the first defendant merely did that in whatever form, the plaintiff cannot be permitted to turn round to demand that the first c defendant be liable or deemed liable for confirming that those who signed the promissory notes were the (accredited) signatories of the second defendant company. That would be betraying the intention of both parties. It is not the case of d the plaintiff that the promissory notes were not paid because those who signed them on behalf of the second defendant company were not the signatories of that company. This was certainly not a matter to be decided under an Or- e der 10 procedure. The first defendant clearly demonstrated that there was a good defence to the plaintiff’s action against it. The learned trial Judge should have resolved satisfactorily in what capacity the first defendant appended its signature f on the promissory notes. Was it as drawer, indorser or acceptor (see section 23 of Bills of Exchange Act) or as witness to the authority of the signatories or as guarantor? In MacDonald v. Whitfield (1883) 8 App. Cas. 733 at 745, g Lord Watson said that if there is ambiguity as to the capacity in which a party signed an instrument, the whole facts and circumstances attended upon the making, issuing, and transferring of the instrument may be legitimately referred to for h the purpose of ascertaining the true relation of the parties to each other; and reasonable inferences derived from these facts and circumstances are admitted to the effect of qualifying, altering or even inverting the relative liabilities which the law merchant would otherwise assign to them. This was i applied in Yeoman Credit Ltd v. Gregory (1963) 1 All E.R. 245. It seems to me it would be an injustice to ignore the whole essence of what the plaintiff required the confirmation of the first defendant for and which the latter confined j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA F.S.B. International Bank Ltd v. Imano (Nigeria) Ltd 235 a itself to, and then allow the self-same plaintiff to seek to damnify the first defendant with liability not incurred was never contemplated and not reasonably deducible in law b from the manner of the presence of the first defendant’s signature on the promissory notes in question. A court of justice has a duty to prevent the happening of such inequity. The learned trial Judge referred to the letter of request by c the plaintiff to the first defendant. He said:– “I would like to say a word or two about the submission of Mrs Olateru Olagbegi that the first defendant’s indorsement on the promissory notes is a mere administrative service performed at the d request of the plaintiff. A careful perusal of the plaintiff’s letter would show that what the plaintiff asked for is a letter of confirmation from Federal Savings Bank identifying the signatures to the promissory notes and confirming same. See Exh ‘A’ attached to the affidavit of Mr Oladapo Ladenika sworn to on the second e December, 1988.” Even on that interpretation, it is clear that the first defendant merely responded to the request of the plaintiff, and to its knowledge in the circumstances, the first defendant did not f do more than “identifying the signatures to the promissory notes and confirming same” and nothing in that makes the first defendant an “acceptor for payment” as pleaded by the plaintiff. g I have said already that this was not a proper case to be summarily decided on Order 10 procedure. I have read McDonald and Co v. Nash Co (1924) All E.R. Reprint 601 (HL) and Bernardi v. National Sales Corporation (1931) All h E.R. Reprint 320 relied on by my learned brother, Sulu- Gambari JCA, I must say I find them to be in support of the view that ,in a case like this, before liability can be properly placed, there ought to be a trial. Besides, there was evidence i of indorsement in those cases of the instruments involved and in the McDonald case it was held that the proper inference from the facts was that it was the common intention of the appellants and respondents that the latter should be di- j rectly liable to the former on the bills. There cannot be [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 236 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. found in the present case such common intention to make a the first defendant liable to pay the promissory notes; and no proper legal inference can be drawn from the available facts. Whereas prima facie those facts point to the contrary. b I have come to the conclusion, which I find with due respect to be inevitable, that the decision against the first defendant was wrongly reached upon the facts, the procedure and the law. I therefore allow the appeal and set aside the c decision together with the order for costs of the lower court. I would grant leave to the first defendant to defend the action which should be tried before another Judge. I award costs of N2,000 in favour of the first defendant/appellant d against the plaintiff/respondent. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

Chief Festus S. Yusuf v. Co-operative Bank Ltd 237 a Chief Festus S. Yusuf v. Co-operative Bank Limited b SUPREME COURT OF NIGERIA BELLO CJN, IGUH, OGWUEGBU, ONU, UWAIS JJSC Date of Judgment: 2 SEPTEMBER 1994 Suit No.: SC. 144/1991 c Banking – Banker and customer relationship – Action for recovery by customer – Banker alleged that customer’s account was dormant and customer’s action was statute- barred – When cause of action accrues to customer d Banking – Banker and customer relationship – Customer maintained two accounts with different branches of the banker – Banker disputed the credit balances by customer – What customer and banker should prove to establish the e balance in customer’s account Facts The plaintiff/appellant sued the defendant/respondent in the f High Court, Benin City claiming the following reliefs. “(a) A declaration that the plaintiff was not indebted to the defendant in respect of the plaintiff’s Account with the defendant, a banker at Ibadan, Oyo State and at Benin City, Bendel State of Nigeria. g (b) A declaration that the plaintiff’s account with the defendant at Ibadan and Benin City are in a credit of N2,211,956.35 made up as follows:– 1. Ibadan branch N 677,264.15 h 2. Benin branch N1,534,692.20 Total N2,211,956.35 (c) An order for payment by the defendant to the plaintiff of the sum of N2,211,956.35 due and payable from the defendant i to the plaintiff on the plaintiff’s accounts with the defendant at Ibadan and Benin City.” The plaintiff/appellant maintained two current accounts at Ibadan and Benin City from 1969 to 1971 and claimed that j the two accounts stood at credit balances. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

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The defendant/respondent admitted that the plaintiff/ a appellant had been its customer and it asserted that, with respect to its Benin City account, the plaintiff/appellant ceased to be its customer when his account was closed in b 1970 because he failed to operate the account satisfactorily and there was no debt owed by them to the plaintiff/appellant. However, the defendant/respondent denied that the appellant had operated an account with it at Ibadan. The defendant/respondent asserted that the alleged irregular- c ity in the operation of plaintiff’s/appellant’s account in Be- nin branch having been shown to have arisen since 1980, the plaintiff’s/appellant’s action was statute-barred. They also claimed that, since the transaction which gave rise to the d alleged irregularity in the operation of plaintiff’s/appellant’s account in the Ibadan branch having been shown to have taken place in Ibadan, Oyo State, the High Court, Benin City had no jurisdiction. e The trial court appointed a special referee to consider the numerous technical banking documents tendered by the plaintiff/appellant and give relevant expert advice. The plaintiff/appellant responded to the invitation of the special f referee but the respondent failed to do so. The special referee tendered his report to the court and stated that the cheque book stubs and detailed bank statements were not available for his consideration. He stated that there were no g information about the Ibadan branch account and the figure in the Benin branch account was N1,493,393.65. The trial Judge held that he had jurisdiction to entertain the claim relating to the Ibadan account and the action was not h statute-barred. He therefore granted the following declarations:– “1. That the plaintiff/appellant was not indebted to the defendant in respect of his account at Ibadan and Benin City. i 2. That the plaintiff/appellant account with the defendant/ respondent at Ibadan and Benin City branch are as follows:– 1. Ibadan branch...... N 677,264.15 2. Benin branch ...... N1,758,288.00” j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

Chief Festus S. Yusuf v. Co-operative Bank Ltd 239 a The respondent was not satisfied with the judgment and appealed to the Court of Appeal challenging the appointment of the special referee and the appellant cross-appealed. b The Court of Appeal held that the trial Judge was right in appointing the special referee but he did not make any attempt to reconcile the statement of account with the report of the special referee. Consequently, the Court of Appeal c allowed the appeal and ordered a retrial de novo, but struck out the cross-appeal. The appellant appealed to the Supreme Court and the respondent also cross-appealed contending that the Court of Appeal was wrong in failing to pronounce d on the issues of jurisdiction and statute of limitation canvassed. The Supreme Court dismissed both the appeal and the cross-appeal. e Held – 1. Cause of action for the recovery of money deposited with a banker by a customer could be said to have arisen f from the date of failure of the respondent to effect the payment demanded by the appellant. 2. The action was not statute-barred because, though the account of the appellant had been dormant since 1971, g there was no evidence that the appellant had made any demand in relation to the account which the respondent had failed to meet and hence no cause of action had accrued to the appellant. h 3. The Court of Appeal was right in setting aside the declarations granted by the trial court because the appellant did not tender the statement of account and relevant i documents in support of the declaration that it had a credit of N677,264.15 in the Ibadan branch of the respondent. 4. In order to prove the balance in the appellant’s account, j he ought to have tendered bank tellers as evidence of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

240 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

lodgements and cheque book stubs to show details of a payments and the respondent ought to have tendered a detailed bank statement. 5. The judgment should be set aside because the trial Judge b did not consider the evidence properly and did not show in the judgment how he arrived at the amount he awarded to the appellant in respect of the Benin branch. Appeal and cross-appeal dismissed. c Retrial ordered.

Cases referred to in the judgment d Nigerian Ashubiojo v. A.C.B. (1966) 2 All N.L.R. 203 Ayoola v. Adebayo (1969) N.S.C.C. 173 e Barclays Bank v. Central Bank (1976) 6 S.C. 175 Duru v. Nwosu (1989) 4 N.W.L.R. (Part 113) 24 Egbe v. Adefarasin (1987) 1 N.W.L.R. (Part 47) 1 f Ezomo v. Oyakhire (1985) 1 N.W.L.R. (Part 2) 195 Garba v. University of Maiduguri (1986) 1 N.W.L.R. (Part 18) 550 g Mustapha v. Gov. Lagos State (1987) 2 N.W.L.R. (Part 58) 539 Olatubosun v. NISER Council (1988) 3 N.W.L.R. (Part 80) 25 h Saude v. Abdullahi (1989) 4 N.W.L.R. (Part 116) 387 Sken Consult (Nig.) Ltd v. Ukey (1981) 1 S.C. 6 i Foreign Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110 Midland Bank v. Conway Corporation (1965) 1 W.L.R. 1165 j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

Chief Festus S. Yusuf v. Co-operative Bank Ltd 241 a Nigerian statutes referred to in the judgment Companies Act, 1968, section 36 High Court Law of Bendel State, section 45 b Sheriffs and Civil Process Act (Cap 407) Laws of the Fed- eration of Nigeria, 1990, sections 97, 98 and 99 c Nigerian Rules of Court referred to in the judgment High Court of Bendel State (Civil Procedure) Rules, 1976, Order 3 Rule 13 and Order 6 Rules 2 and 4 d Counsel For the appellant: Okpaluba (with him Igwe) Respondent absent and unpresented. e Judgment BELLO CJN: (Delivering the lead judgment) The appellant was the plaintiff in the High Court, Benin City where he claimed from the respondent/bank as follows:– f “(a) A declaration that the plaintiff is not indebted to the defendant in respect of the plaintiff’s account with the defendant, a banker, at Ibadan, Oyo State of the Federal Republic of Nigeria and at Benin City, Bendel State of Nigeria. g (b) A declaration that the plaintiff’s accounts with the defendant at Ibadan and Benin City are in a credit of N2,211,956.35k made up as follows:– (i) Ibadan branch...... N677,264.15 h (ii) Benin branch...... N1,534.692,20 Total...... N2,211,956.35k (c) An order for payment by the defendant to the plaintiff of the sum of N2,211,956,35k due and payable from the defendant i to the plaintiff on the plaintiff’s accounts with the defendant at Ibadan and Benin City.” The case for the appellant was that he was a customer of the respondent with which he had maintained two current ac- j counts at Ibadan and its branch at Benin City from 1969 to [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 242 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

1971 and that the two accounts stood at credit balances as a claimed. The respondent admitted that the appellant had been its customer and it averred with respect to its Benin City ac- b count in paragraph 4 of the statement of defence:– “The defendant shall establish that the plaintiff ceased to be a customer of the defendant when his account No. 428 had to be closed in 1970 because the plaintiff failed to operate the account satisfac- c torily and there was no debt owing by the defendant to the plaintiff.” However, the respondent denied that the appellant had operated an account with it at Ibadan. d In paragraph 7(2) of the statement of defence, the respondent also pleaded limitation of action as follows:– “At the trial of this action, the defendant shall in accordance with Order 22 Rule 2 raise the following preliminary points of law:– e (1) That the plaintiff’s claim does not disclose any cause of action in so far as banker and customer relationship is concerned. (2) That the alleged irregularity in the operation of plaintiff’s f account in Benin Branch having been shown to have arisen since 1980, the plaintiff’s action is statute barred. (3) That the transaction which gave rise to the alleged irregularity in the operation of plaintiff’s account in Ibadan Branch g having been shown to have taken place in Ibadan Oyo State of Nigeria, this Honourable Court has no jurisdiction to hear the action by virtue of Order 6 Rules 2 to 4 of the High Court (Civil Procedure) Rules of Bendel State of Nigeria, 1976.” h In his judgment, the trial Judge held that he had jurisdiction to entertain the claim relating to the Ibadan account and the action was not statute barred. He considered the pleadings of the parties and the evidence adduced by them. He granted i the declaration sought, to wit:– “(1) That the plaintiff is not indebted to the defendant in respect of his accounts with the defendants, a banker at Ibadan, Oyo State of Nigeria and in Benin City, Bendel State of Nigeria. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 243 a (2) That the plaintiff’s account with the defendant at Ibadan Branch and Benin City branch are as follows:– 1. Ibadan Branch ...... N 677,264.15 b 2. Benin Branch...... N 1,758,288.00” He did not grant the third and fourth reliefs. The respondent was not satisfied with the judgment and appealed to the Court of Appeal on seven grounds of appeal. c The appellant also cross-appealed on only one ground of appeal. In its determination of the appeal and the cross-appeal, the Court of Appeal considered two issues only, namely, the d power of the trial Judge to appoint a special referee under section 45 of the High Court Law and whether the case for the respondent was adequately considered at the trial. e The issue relating to the appointment of the special referee arose from the appointment by the trial court of Mr Aguriase Osiriomo, a chartered accountant, in exercise of the power under section 45 of the Law. In the course of his testimony during the trial, the appellant as PW1, tendered numerous f banking documents and, because of their banking and accounting technicalities, the trial Judge sought the opinion of an expert and referred the matter to the special referee for examination and report. All the documents tendered by the g appellant in evidence were given to the special referee and the parties were invited to make any submission or representation before him. The appellant responded to the invitation but the respondent failed to do so. In consequence, the h special referee based his report, which was admitted in evidence at the trial as exhibit AA18, on the appellant’s case only. The special referee also testified at the trial and was cross-examined by Counsel for the parties. i In the Court of Appeal, learned Counsel for the respondent challenged the appointment of the special referee and calling him by the trial Judge to give evidence on the ground that by so doing the trial Judge had provided a witness for the de- j fence and had thereby descended into the arena contrary to [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 244 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. section 17(2) of the 1979 Constitution. The Court of Appeal a held that section 45 of the High Court Law empowered the trial Judge to appoint a special referee and the appointment and his testimony under the circumstance of the case were b not unconstitutional. The court also considered the complaint against the trial court for calling its Senior Registrar, who merely produced the special referee’s report to have no merit. c I consider it necessary to quote in extenso the reasons stated by the Court of Appeal. The court first referred to the special referee’s report which stated:– “The Co-operative Bank did not respond to the letter by the Court d Registrar. The information called for in our letter of March 4th, 1987 was not made available to us. In order to express an authoritative opinion on the accounts, the parties to the dispute, particularly the Bank ought to provide all the information required. e BANK LODGMENTS We have analysed the bank tellers in order to arrive at the amounts paid into the bank (See Appendix 1). The total amount paid to the bank during the period under consideration was 879,144:8:6d (sic) or N1,758,288.85k. There were no bank statements. We could not f therefore confirm whether or not these amounts were credited to Chief Yusufu’s account. The bank statements produced by the Chief were incomplete and could not be worked upon. The bank statements for the period February 25th, 1970 to March 12th, 1971 g were not produced. The plaintiff stated that the bank did not issue him with any during the period. BANK PAYMENTS We did not have full details of all the payments by the plaintiff h through the Co-operative Bank Ltd. The paid cheque book stubs should have provided the information. The paid cheque should be supplied by the defendant or cheque book stubs by the plaintiff.” Thereafter, the court proceeded to state in the lead judgment i of Edozie JCA:– “From the above excerpt, the Special Referee made it quite clear that his report cannot be said to be authoritative because relevant documents such as the relevant Statements of Account were not available. These Statements were subsequently tendered in j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 245 a evidence as exhibits BB2 to BB10 and BB11 to BB17. They were tendered by the appellant’s (now the respondent’s) sole witness after the Special Referee had testified. In other words, the Special Referee made no use of the Statement of Account. Worse still, the b learned trial Judge did not attempt to reconcile the Statement of Account with the Special Referee’s report. He based his judgment on the Special Referee’s report. Quite apart from the fact that the learned trial Judge based his judgment on the Special Referee’s c report exhibit AA18, he committed serious errors in his judgment. As an example, whereas he declared that the amount standing to the credit of the respondent at the Ibadan account was N677,264.15k, the Special Referee at page 2 of his report exhibit AA18 stated in respect of the Ibadan Branch account:– d ‘There were no information about the dealings with the Cooperative bank of Western Nigeria Limited, Ibadan. We could not therefore report on it.’ Furthermore, the learned trial Judge gave the figure in the Benin e Branch account as N1,758,288 as against the figure of N1,493,393.65 contained in the Special Referee’s report. By relying on the Special Referee’s report and without due consideration of the Statement of Account, it seems to me that the f appellant’s case had not been considered or adequately considered. The Statements of Account exhibits BB2 to BB10, BB11 to BB17 show that the respondent had only a credit balance of £534:5:1 or approximately N1,069.10k. The respondent’s case, it must be remembered, was that certain lodgements into his account were g wrongly debited against the account. In my view, the best evidence of that fact is the relevant ledger cards or Statements of Ac- count. I also take the view that a report on the respondent’s account with the appellant at Benin Branch which fails to take into h consideration the entries in the relevant ledger cards or Statements of Account cannot be a realistic account. I have scanned through the judgment of the learned trial Judge and I was unable to find where any attempt was made to reconcile the Statement of Ac- count which he received in evidence with the report of the Special i Referee. Since he failed to give any consideration to the Statement of Account exhibits BB2 to BB10 and BB11 to BB17 and since it cannot be said that had he done so, his decision would have been the same, his judgment cannot be allowed to stand. An Appeal Court will order a retrial where there has been such an error in law j or an irregularity in procedure which neither renders the trial a [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 246 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

nullity nor makes it possible for the Appeal Court to say there has a been no miscarriage of justice. Duru v. Nwosu (1989) 7 S.C.N.J. 154 at 159, (1989) 4 N.W.L.R. (Part 113) 24; Okoduwa v. The State (1988) 2 N.W.L.R. (Part 76) 333.” b The Court of Appeal allowed the appeal and ordered a retrial de novo. It struck out the cross-appeal. On 15th April, 1992, the appellant obtained the leave of this Court to appeal and to argue grounds of mixed law and c facts. Four grounds of appeal were filed and the following issues for determination were formulated therefrom:– “(i) Are the reasons for which the Court of Appeal set aside the judgment of the trial Court well-founded? In other words, d was the Court of Appeal right to have set aside the judgment of the learned trial Judge on the basis that the respondent’s case (appellant in the Court below) was not considered or adequately considered? (ii) Was the reason for ordering a retrial in this case well e founded in law and in fact? In other words, was the order for retrial proper and justified? (iii) Was the Cross-Appeal of the plaintiff/appellant rightly struck out or refused by the Court of Appeal”? f The respondent was not also satisfied with the decisions of the Court of Appeal and has cross-appealed on three grounds of appeal from which the following issues were raised:– “1. Whether the justices of the Appeal Court were right in g failing to pronounce on the issues of jurisdiction and statute of limitation canvassed before them. 2. Whether or not the writ of summons that originated the present action leading up to this appeal was void for non- h compliance with sections 97 and 99 of the Sheriffs and Civil Process Act Cap 189 of 1958. 3. Whether the learned justices of the Court of Appeal were right in not dismissing the respondent’s case when appellant was not given fair hearing.” i I think it is appropriate to deal with the cross-appeal first, except issue No. 3 thereof which may be considered together with issue No. (ii) of the appeal, because both are inter- related. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 247 a The issue of jurisdiction in respect of the claim relating to Ibadan was raised both in the trial court and in the Court of Appeal. As shown earlier in this judgment, the trial court b had held it had jurisdiction. However, the court below failed to determine the issue. The failure of the Court of Appeal will not be an impediment to this Court for the determination of the issue. The issue of jurisdiction is very fundamen- c tal and it can be taken at any stage of the proceedings in any court, including this Court (Ezomo v. Oyakhire (1985) 2 S.C. 260 (1985) 1 N.W.L.R. (Part 2) 195; Mustapha v. Governor of Lagos State (1987) 5 S.C.J.N. 143; (1987) 2 N.W.L.R. (Part 58) 539 and Saude v. Abdulahi (1989) 4 N.W.L.R. d (Part 116) 387).

Learned Counsel for the respondent did not appear at the hearing of the appeal but had filed briefs for the prosecution e of the cross-appeal and in response to the appeal. In his brief on jurisdiction, learned Counsel contended that the headquarters of the respondent was situated at Ibadan in Oyo State while the suit was instituted at Benin City in Bendel f State; that the appellant had not complied with Order 3 Rule 13 of the High Court of Bendel State (Civil Procedure) Rules, 1976 and section 36 of the Companies Act, 1968 regarding service and that the non-compliance constituted g breaches of sections 98, 99 and 101 of the Sheriffs and Civil Process Act. Relying on Union Beverages Ltd v. Adamite Co Ltd (1990) 7 N.W.L.R. (Part 162) 348 and Skenconsult v. Ukey (1981) 1 S.C. 6, he submitted that the breach of the h mandatory requirements of sections 97 and 99 of the said Act was a fundamental defect which rendered the writ a nullity. This submission is the backbone of issue No. 2.

Responding in his brief, learned Counsel for the appellant i submitted that the jurisdiction issue was ill-founded and was not properly raised in this Court because the point had not been taken in the lower courts for the reasons now relied upon by the respondent. Whether the writ of summons, j contended Counsel, was properly served or not depended [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 248 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. upon proof or evidence of such service, whether at Ibadan or a Benin City and, in the absence of such evidence, the mere indorsement of the writ did not prove or presuppose irregularity. There was no proven breach of section 99 of the Act. b Further, the respondent having appeared in answer to the writ, filed pleadings and participated at the trial without any objection, the doctrine of waiver would therefore apply. Learned Counsel submitted that Skenconsult (Nig.) Ltd v. c Ukey (supra) is distinguishable from the case in hand and he referred the Court to Ariori v. Elemo (1983) 1 S.C. 13 at 16 and Ezomo v. Oyakhire (supra) at 261, but did not show any reason or purpose for the reference. d I agree with learned Counsel for the appellant that the jurisdiction issue pleaded in the statement of defence was entirely based on a different ground from the ground now advocated in this Court. Paragraph 7(3) of the Defence e averred:– “(3) That the transaction which gave rise to the alleged irregularity in the operation of plaintiff’s account in Ibadan Branch having been shown to have taken place in Ibadan, Oyo State f of Nigeria, this Honourable Court has no jurisdiction to hear the action by virtue of Order 6 Rules 2 to 4 of the High Court (Civil Procedure) Rules of Bendel State of Nigeria, 1976.” Order 6 Rules 2 and 4 relate to the territorial jurisdiction of g the High Court of Bendel State. The rules provide:– “(2) All suits relating to land, or any mortgage or charge thereon, or any other interest therein or for any injuries thereto, and also all actions relating to personal property h distrained or seized for any cause, shall be commenced and determined in the Judicial Divisions in which the land is situated or the distress or seizure took place. (4) All suits for the specific performance, or upon the breach of any contract, may be commenced and determined in the Ju- i dicial Division in which such contract ought to have been performed or in which the defendant resides.” Learned Counsel for the respondent did not adduce any evidence on the pleading and did not address the trial court j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 249 a on it. It appeared the trial Judge regarded the matter, quite rightly in my view, as abandoned and he did not decide it in his judgment. b In the Court of Appeal the respondent shifted its ground on the issue in its Counsel’s brief wherein non-compliance with Order 3 Rule 13 and section 36 of the Companies Act and the breach of sections 97 and 99 of the Sheriffs and Civil c Process Act were introduced. The Court of Appeal did not determine the issue which the respondent has brought forward to this Court as reiterated in its brief. d I consider it pertinent to state the relevant provisions of the rule and the Acts upon which the jurisdiction issue and the validity of the writ were predicated. Order 3 Rule 13 reads:– “13. Subject to the provisions of any law regulating service on a e company carrying on business in Nigeria or on any society or fellowship in Nigeria whether corporate or unincorpo- rate, service may be effected by sending the writ, or other document to be served by prepaid registered post to the secretary or other corresponding officer at the Head Office in f Nigeria of such company, society or fellowship, as the case may be, or by serving the writ or document on such secretary or corresponding officer personally at such Head Office as aforesaid.” g Section 36 of the Companies Act also made provision for service of documents on companies as follows:– “36. A document may be served on a company by leaving it at, or sending it by post to the registered office of the com- h pany.” Sections 97 to 99 of the Sheriffs and Civil Process Act are in these terms:– i “97. Every writ of summons for service under this part out of the Region or part of the Federation in which it was issued shall, in addition to any other endorsement or notice required by the law of such Region or part of the Federation, have endorsed thereon a notice to the following effect (that j is to say) . . . [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 250 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

This summons (or as the case may be) is to be served out of a the . . . Region (or as the case may be) . . . and in the . . . Region (or as the case may be) 98. A writ of summons for service out of the Region or part of b the Federation in which it was issued may be issued as a concurrent writ with one for service within such Region or part of the Federation and shall in that case be marked as concurrent. 99. The period specified in a writ of summons for service under c this part as the period within which a defendant is required to answer before the court to the writ of summons shall be not less than thirty days after service of the writ has been effected, or if a longer period is prescribed by the rules of the d court within which the writ of summons is issued, not less than that longer period.” In Skenconsult v. Ukey (supra), this Court held that non- compliance with the provision of section 99 was a funda- e mental defect which went to the question of competence and the jurisdiction of the court and consequently an interlocutory proceeding taken less than 30 days after the service of the writ of summons was null and void. As that case clearly f disclosed and Barclays Bank v. Central Bank (1976) 6 S.C. 175 also stated at 192, there must be evidence of the requirements of Order 3 Rule 13 and sections 97 to 99 of the Act that were not complied with before the court can act. In g the case on appeal, the respondent did not furnish such evidence and has not even asserted in its brief to this Court the defect in the service of the writ upon which the issues on jurisdiction and the validity of the writ were invoked. h It follows from the foregoing that the respondent has not provided the materials upon which the jurisdiction and the validity of the writ issues may be determined. The second limb of issue No. 1 deals with the failure of the i Court of Appeal to decide the issue of limitation of action canvassed before it. The issue had been raised in the trial Court and the Judge had held that the action was not barred by section 4 of the Limitation Law Cap 89 of the Laws of j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 251 a Bendel State, 1976. The respondent appealed against that decision and canvassed it in the Court of Appeal but that court omitted to pronounce on the issue. b In his brief, learned Counsel for the respondent urged this Court to decide the issue of limitation of action and to hold that, since the cause of action arose in 1970, the action was barred by sections 4(1)(a) and 4(2) of the said law. He re- c ferred to Egbe v. Adefarasin (1987) 1 N.W.L.R. (Part 47) 1 at 3: He stated that the failure of the Court of Appeal should not bar this Court from determining the issue. d In response, the appellant’s Counsel contended that the assertion that the cause of action had arisen in 1970 was a mere assumption not supported by the findings of the trial Judge who considered the Limitation Law inapplicable to e the circumstances of the case. Since the trial Judge found the appellant had a dormant current account and the claim was for declaration of the f balance of the account, Counsel submitted that the Limita- tion Law was not a bar to such claim. He referred to Ekwuno v. Ifejika (1960) 5 F.S.C. 156; (1960) S.C.N.L.R. 320 which appears to be irrelevant. g I think the Court of Appeal made a very serious error of law by its failure to determine the limitation issue. If the cause of action was statute-barred, no proceedings could be brought to prosecute the action and the order for a retrial h made by the Court of Appeal would be abortive. It is therefore essential to decide the issue before the order for a retrial can be upheld. Since the Court of Appeal did not decide it, ordinarily we would remit the case to that court for that i purpose. However, since the issue touches on the competence and jurisdiction of the court to entertain the claim, this Court, for the reasons I have earlier stated in this judgment while considering the jurisdiction issue, may as well deter- j mine the issue. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 252 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Now, section 4 of the Limitation Law provides:– a “4(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, this is to say b (a) actions founded on simple contract or on tort.” “Cause of action” was defined by Oputa JSC in Egbe v. Adefarasin (1987) 1 N.W.L.R. (Part 47) 1 “as the fact or facts which establish or give rise to a right of action – it is c the factual situation which gives a person a right to judicial relief”. The relation between a banker and its customer is that of a debtor and creditor and it is founded on a simple contract. A banker is under an obligation to pay his customer d the amount standing to the customer’s credit on his current account. It is when a customer has made a demand for payment and the banker has failed to meet the demand that a cause of action for the recovery of the amount can be said to e have arisen from the date of the failure to effect payment (Ashubiojo v. A.CB. (1966) 2 All N.L.R. 203; Midland Bank v. Conway Corporation (1965) 1 W.L.R. 1165 and Joachim- son v. Swiss Bank Corporation (1921) 3 K.B. 110 at 127). f The evidence in this case on appeal shows that the appellant’s current account stood at credit of £534-5-1 at the time of the trial. Though the account had been dormant since 1971, there was no evidence whatsoever that the appellant g had made any demand in relation to the account which the respondent had failed to meet. Accordingly, no foundation was established for the issue relating to the cause of action. I am satisfied the trial Judge was right in his finding that the h cause of action was not statute-barred. In conclusion, the cross-appeal on issues Nos. 1 and 2 have no merit. The appeal and issue No. 3 of the cross-appeal may now be i considered. In dealing with the conclusion of the Court of Appeal that the trial court had not adequately considered the case for the respondent and upon which that court set aside the judgment of the trial court, learned Counsel for the j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 253 a appellant reviewed the evidence adduced by the parties and submitted that the trial Judge meticulously examined and assessed the evidence before arriving at his verdict and the b Court of Appeal was in error not only in stating that the case of the respondent had not been adequately considered but also in suggesting that the trial Judge had based his decision on the report of the special referee. c With regard to the order of a retrial, appellant’s Counsel stated that the Court of Appeal misdirected itself as to the correct guideline for ordering a retrial when it relied on Duru v. Nwosu (1989) 4 N.W.L.R. (Part 113) 24 and d Okoduwa v. The State (1988) 2 N.W.L.R. (Part 76) 333. In the Duru case, learned Counsel submitted, there was a misdirection on the onus of proof and a failure to evaluate the evidence while in Okoduwa’s case there was a flaw by the e trial Judge in the consideration of the real issue in the case and a failure to advert to the conflicting evidence. There was no such misdirection or flaw or failure in the present case. Learned Counsel further contended that a retrial would f serve no useful purpose because, according to the testimony of DW1, all the vouchers on the appellant’s account had been destroyed and would be futile and wasteful exercise, except perhaps as affording the respondent another opportu- g nity to make up for the deficiencies in their pleadings and evidence, a course which was objectionable in law. Showing due respect, he submitted that the order for a retrial in the face of the overwhelming evidence in support of the declara- h tions granted by the trial court was a wrongful exercise of judicial discretion. He relied on Esso West Africa Incorpo- rated v. Oyegbola (1969) 1 N.M.L.R. 194 at 198; Ezeoke v. Nwagbo (1988) 3 S.C.N.J (Part 1) 37 at 49–50; (1988) 1 i N.W.L.R. (Part 72) 616. On issue No. (iii), the appellant’s Counsel stated that the Court of Appeal had erred in law by its failure to decide the appellant’s cross-appeal which was argued before it. He said j the appellant’s claim for the payment by the respondent of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 254 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the money standing to his credit was dismissed by the trial a Judge because, according to the Judge, there was no evidence that a demand had been made on the respondent and the respondent had refused payment. Learned Counsel con- b tended that if the Court of Appeal had examined the issue, it would have found that the trial Judge had failed to avert to his own finding in the case that the writ of summons was a sufficient demand in law and the appellant was entitled to c judgment in whatever amount that was standing to his credit (Joachimson v. Swiss Bank Corporation (1921) All E.R. (Reprint) 93). He concluded that the dismissal of that item of claim was wrong. d Responding, learned Counsel for the respondent referred to the judgment of Salami JCA wherein the learned Justice stated that the respondent had not been given a fair hearing and submitted that it is trite law that, where an appellant was e not given a right of fair hearing, the proper order was the dismissal of the claim. To order a retrial was a miscarriage of justice for it amounted to giving the plaintiff another opportunity to relitigate the same matter. A retrial would f only be ordered if the court was satisfied that the other party would not thereby be wronged. Being a declaratory action, learned Counsel urged the court to dismiss the claim since the appellant did not prove his case (Olatunbosun v. NISER Council (1988) 3 N.W.L.R. (Part 80) 25; Garba v. Univer- g sity of Maiduguri (1986) 1 N.W.L.R. (Part 18) 550 and Olasehinde v. A.C.B. (1990) 7 N.W.L.R. (Part 161) 180 at 183). h In parenthesis I may point out that the submission of learned Counsel for the respondent on the striking out of the appellant’s cross-appeal by the Court of Appeal was misconceived. He stated that the dismissal of the claim relating to the cross-appeal on the ground that there was no demand i and failure to meet the demand were concurrent findings of facts. It is correct that the trial court had made such finding but the Court of Appeal did not consider the matter and did not make any finding. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 255 a In my view, the Court of Appeal was right to set aside the declarations granted by the trial court. In respect of the Ibadan account, there was no evidence whatsoever to sup- b port the declaration that it had a credit of N677,264.15 in the Ibadan branch which was the amount claimed in the amended statement of claim. It is pertinent to state the evidence adduced by the appel- c lant in respect of the Ibadan branch. Firstly, the appellant as PW1 produced the letter of credit, exhibit C, which he stated was sent to him from London through the Ibadan branch. He then proceeded in his evidence and said:– d “I received Statement of Account from the defendant last in April, 1970. It is from these Statement of account (sic) I received that I discovered that all the payments I made with these exhibits were debited to my account I maintained at the defendant branch at e Ibadan. All the payments so far I made was not treated in my account in the defendant bank in Benin but sent to the one I maintained with them at Ibadan branch. In spite of the slips with which I paid into the Benin account, the defendant was using the payment for the Ibadan branch account. I then caused auditors to go f into my account which I maintained both in Benin and Ibadan branch of the defendant Company. These auditors are Obiorah Monu and Co. I instructed also the firm of Anjous, Uku and Eweka and Co who are Chartered Accountants to investigate my financial dealing[s] with the defendant both in Benin and in g Ibadan. The two companies submitted their reports to me. These are the Reports. Counsel seeks to tender Reports. Mr Edema-Sillo: This document cannot go in through this witness, because the witness is not the maker. h Court: Mr Edema-Sillo is perfectly right. In the interest of justice document cannot go in as exhibit; it is accordingly, admitted and marked Id1 to Id3.” It may be noted that none of the auditors nor the accountants i were called as witnesses and their reports were not admitted in evidence. Again the appellant as PW1 testified:– “Exhibit ‘AA8’ was collected on my behalf by the defendant but j debited my account with it. Exhibit ‘AA10’ was paid by exhibit [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 256 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

‘AA9’ and was debited to my account instead of being credited. a The value in exhibit ‘AA14’ was collected on my behalf by the defendant but debited instead of crediting my account. Exhibit AA15’s proceeds were collected on my behalf by defendant but not credited to my account. Exhibit ‘AA 16’ is a bank of America b draft paid into my account with the defendant and not credited to the account. These documents are statements of account from Ibadan branch of the defendant where I also have an account sent to me. Counsel seeks to tender statements of account. c Mr Agbettor: I withdraw documents.” The statements of account were not thereafter produced at the trial. d Under cross-examination, the appellant stated that the respondent had transferred his account in Benin branch to Ibadan branch and all the credit entries that should have gone into his Benin account were debited to his Ibadan account. The credit and debit entries were not produced. e In his report, the special referee stated that he had not been given information on the Ibadan branch and he could not report on it. The manager of the Benin branch, PW1, stated f that he was not aware that the appellant had an account at the Ibadan branch. It appears the trial Judge did not base his decision relating to the Ibadan branch on any evidence but on the pleadings. g In his judgment, after having referred to several paragraphs of the amended statement of claim and their denials in the statement of defence, he continued:– “In so denying the material facts averred in those paragraphs of the h Amended statement of claim, the defendant had been evasive and consequently a defective denial. The legal effect of paragraphs 7 and 8 of the statement of defence is therefore non-denial of the facts contained in those paragraphs of the amended statement of claim; and so by Order 13 Rule 12 High Court (Civil Procedure) i Rules, 1976 those paragraphs of the Amended statement of claim are taken as admitted.” He therefore entered judgment in the sum of N677,264.15 for the branch on the purported admission of the respondent. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN Chief Festus S. Yusuf v. Co-operative Bank Ltd 257 a The Benin account may now be considered. In his testimony relating to the account, the appellant produced a plethora of documents which caused the trial Judge to appoint the b special referee. The appellant did not give evidence of the balance of the account. In his report, exhibit AA18, the special referee found the balance to be N1,493,393.85 credit based on the documents and information supplied to him by c the appellant. The report showed the credit balance was the total of the amount paid into the account less dishonoured cheques and it did not include withdrawals by appellant from the account. The special referee stated that the respondent or the appellant should have provided him with the paid d cheques or the cheque book stubs respectively to determine the withdrawals. Neither was presented. He pointed out that in order to express an authoritative opinion on the accounts, the parties, particularly the respondent, ought to provide all e the information he had required. The report was therefore not conclusive. First defence witness (DW1) testified after the special referee had given evidence. He produced the statements of f the Benin account, exhibits BB2–BB10, which showed all the withdrawals during the material time leaving a credit of £534.5.1 now N1,065.02, only. g It is also apparent that the trial Judge did not base his judgment for the Benin account on the evidence or on the amended statement of claim wherein the claim was N1,534,692.20. The special referee found the balance to be N1,493,393.35 but the total withdrawals must be deducted h from that amount to realise the correct balance. The evidence of DW1 showed the balance of the account to be £534.5.1 now N1,065.02, credit after the withdrawals had been deducted. The trial Judge did not consider and assess i the evidence properly when he gave judgment for the appellant in the sum of N1,758,288 for the Benin branch. He did not show in the judgment how he arrived at that amount. He did not give full consideration to the evidence for the de- j fence and exhibit BB2–BB10 which showed the balance of [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Bello CJN 258 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the account to be N1,065.02 credit only. It is obvious that a the judgment cannot be supported having regard to the evidence. b Having set aside the judgment, the question that remains to be considered is whether the Court of Appeal was right to have ordered a retrial or the claim should have been dismissed. It is an elementary principle of law that, where a plaintiff fails to adduce an iota of evidence to prove his case, c his claim should be dismissed. Ex facie, the appellant did not establish his case in respect of the Ibadan account, one may therefore be tempted to dismiss that item of the claim. How- ever, the evidence showed the Ibadan and Benin accounts d were inter-mingled and therefore in the interest of justice both should be treated together.

The principles for making an order for retrial were stated e by this Court in Ayoola v. Adebayo and others (1969) N.S.C.C. 173 and Duru v. Nwosu and others (1989) N.S.C.C. 1 (1989) 4 N.W.L.R. (Part 113) 24 and I am satisfied the Court of Appeal took these principles into consid- f eration in making the order for retrial. The appellant’s claim has not failed in toto as the respondent admitted being indebted to him. Since neither party is entitled to judgment under the circumstances of the case, it is proper and just to order a retrial. g I think the Court of Appeal was also right in striking out the cross-appeal in that court. The claim in the cross-appeal was for judgment to be entered for the appellant in whatever h amount the trial court found to be due to him in the Ibadan and Benin accounts. The claim was therefore dependent on and flowed from the declarations sought. Since the judgment on the declarations has been set aside, the cross-appeal can- i not succeed. In conclusion, the appeal and the cross-appeal fail and both are hereby dismissed. The decision of the Court of Appeal is affirmed. There is no order as to costs. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

Chief Festus S. Yusuf v. Co-operative Bank Ltd 259 a UWAIS JSC: I have had the advantage of reading in advance the judgment read by my learned brother, Bello CJN. I adopt the judgment as mine and I have nothing to add. b OGWUEGBU JSC: I have had the privilege of reading in advance the draft judgment just delivered by my Lord, the Chief Justice of Nigeria, I entirely agree with him. I have nothing useful more to add. I abide by the consequential c orders, including the order as to costs contained therein. ONU JSC: I have been privileged to read in advance the judgment of the Honourable Chief Justice of Nigeria just delivered and I agree with his reasoning and conclusion and d have nothing more to add thereto. I make the same consequential orders inclusive of those relating to costs. IGUH JSC: I have had the privilege of reading in draft the lead judgment just delivered by my learned brother, the e Honourable Chief Justice of Nigeria. I entirely agree with the reasoning and conclusion therein and l have nothing to add. I abide by the consequential orders including those as to costs made in the lead judgment. f Appeal dismissed. Cross-appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

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a Augustine Chigozie Uba v. Union Bank of Nigeria Plc b COURT OF APPEAL, JOS DIVISION MUHAMMAD, MUSDAPHER, OKEZIE JJCA

Date of Judgment: 8 DECEMBER 1994 Suit No.: CA/J/51/94 c Banking – Banker and customer relationship – Nature of Banking – Combination of accounts – Principles applicable d Banking – Customer having different accounts in his own right – Meaning of Banking – Negligence – When a bank held negligent e Facts Augustine Chigozie Uba, the appellant herein, was the plaintiff at the lower court. He was a customer of Union Bank of f Nigeria Plc, the respondent herein. He operated two accounts with the respondent at its Gindiri branch. One account was a current account while the other was a loan account. On 9th July, l991, the appellant bought various g motor spare parts from one C.G. Lot for N372,500. On the same day he issued the said C.G. Lot with a cheque for N50,000, drawn on the respondent’s Gindiri branch, as deposit for the supply of the spare parts. When C.G. Lot pre- h sented the cheque for encashment, it was not honoured and was returned marked “Drawer’s Confirmation Required”. C.G. Lot was annoyed. He went to the appellant and told the appellant off in the presence of so many people. C.G. Lot also sold the spare parts to another person. The appellant i was surprised that his cheque was dishonoured because he had made a total deposit of N167,346 and had only withdrawn N113,100 1eaving a balance of N54,346. The appellant then went and saw the branch manager, who asked for j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

Augustine Chigozie Uba v. Union Bank of Nigeria Plc 261 a time to sort out the account. When the branch manager did nothing, the appellant instructed his solicitors to write to the bank, which was done. When the respondent still refused to b pay the cheque, he sued the bank at the Plateau State High Court, Pankshin Judicial Division claiming:– “Whereof plaintiff claims the sum of N500,000 (Five Hundred Thousand Naira only) as special and general damages for all the c loss incurred by the plaintiff as a result of the dishonour of his cheque aforesaid by the defendant.” Pleadings were ordered filed and exchanged. In its statement of defence, the bank denied liability and counter-claimed. d The bank averred that as at 9th July, 1991 when the appellant’s cheque was presented, his current account was in debit. The bank then counter-claimed for N907.42. At the hearing of the suit, the appellant testified and also e called one other witness. Only one witness testified on behalf of the respondent. In a reserved judgment the trial Judge in dismissing the claim said:– “I find that the defendant has successfully proved that the plaintiff f had no enough fund [sic] at the time of the presentation of the cheque to the bank on 9/7/91. He cannot therefore blame the defendant for dishonouring his cheque more so when the dishonour was no outright . . . The plaintiff was in deficit to the tune of N755.68 Kobo at the time of presenting his cheque on 9/7/91.” g The trial Judge also found the respondent’s counter-claim as proved and entered judgment against the appellant in the sum of N907.42 at 26.5% interest from 17th July, 1992. h The appellant was dissatisfied with this decision and he therefore appealed to the Court of Appeal. Held – i 1. The relationship in law between a banker and its customer has been that of debtor and creditor. 2. When a bank credits the current account of its customer with a certain sum, the bank becomes a debtor to the j customer in that sum and, conversely, when a bank [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

262 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

debits the current accounts of its customer with a certain a sum, the customer becomes a debtor to the bank in that sum, whichever party is the creditor is entitled to sue, if demand for payment was not complied with, the other b party for money lent. 3. It follows from the foregoing that when a bank reverses a credit entry of a certain sum in the current account of its customer by debiting the account with the same sum, c such reversal in practical terms means that the bank has liquidated its liability as debtor to the customer. 4. Unless precluded by agreement express or implied from the course of business, the banker is entitled to combine d different accounts kept by the customer in his own right, even though at different branches of the same bank, and to treat the balance, if any, as the only amount really standing to his credit. e 5. The point about the customer having different accounts “in his own right” is probably this, namely, that he has both accounts in his name, and that neither account is a f trust account. 6. A bank will be held negligent if it failed to observe the standard expected of a reasonable banker in respect of a cheque and the onus of proving that they were not negli- g gent lies on the bank. 7. A bank is also bound to honour a cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque. Refusal to honour the h cheque amounts to a breach of contract and would render the banker liable in damages. In the instant case the bank has shown that the appellant had no sufficient funds to pay the cheque. In fact at the time the cheque i was presented, it has been proved that the account was in debit. The bank therefore was not negligent in refusing to honour the cheque. Appeal dismissed. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

Augustine Chigozie Uba v. Union Bank of Nigeria Plc 263 a Cases referred in to in the judgment Nigerian b British and French Bank Ltd v. Opaleye (1962) 1 S.C.N.L.R. 60 United Nigeria Insurance Co v. Muslim Bank (West Africa) Ltd (1972) N.C.L.R. 9 c Yesufu v. A.C.B. (1981) 1 S.C. 74

Foreign d Garnett v. Chewan (1872) LR 8 Ex Ch 10 Book referred to in the judgment Halsbury’s Laws of England (3ed) Volume 2 paragraph 322 e page 172

Counsel For the appellant: Maduabuchi f For the respondent: Orpin

Judgment g MUHAMMAD JCA: (Delivering the lead judgment) Augustine Chigozie Uba, the appellant herein, was the plaintiff at the lower court. He was a customer of Union Bank of Nigeria Plc, the respondent herein. He operated two accounts with the respondent at its Gindiri branch. One ac- h count was a current account while the other was a loan account. On 9th July, l991, the appellant bought various motor spare parts from one C.G. Lot for N372,500. On the same day he issued the said C.G. Lot with a cheque for i N50,000, drawn on the respondent’s Gindiri branch, as deposit for the supply of the spare parts. When C.G. Lot presented the cheque for encashment, it was not honoured and was returned marked “Drawer’s Confirmation Required”. j C.G. Lot was annoyed. He went to the appellant and told the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA 264 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. appellant off in the presence of so many people. C.G. Lot a also sold the spare parts to another person. The appellant was surprised that his cheque was dishonoured because he had made a total deposit of N167,346 and had only with- b drawn N113,100 1eaving a balance of N54,346. The appellant met with the branch manager, who asked for time to sort out the account. When the branch manager did nothing, the appellant instructed his solicitors to write to the bank, which c was done. When the respondent still refused to pay the cheque, he sued the bank at the Plateau State High Court, Pankshin Judicial Division claiming:– “Whereof plaintiff claims the sum of N500,000 (Five Hundred d Thousand Naira only) as special and general damages for all the loss incurred by the plaintiff as a result of the dishonour of his cheque aforesaid by the defendant.” Pleadings were ordered filed and exchanged. In its statement e of defence, the bank denied liability and counter-claimed. The bank averred that as at 9th July, 1991 when the appellant’s cheque was presented his current account was in debit. The bank then counter-claimed for N907.42. f At the hearing of the suit, the appellant testified and also called one other witness. Only one witness testified on behalf of the respondent. In a reserved judgment the trial Judge, in dismissing the claim, said:– g “I find that the defendant has successfully proved that the plaintiff had not enough fund[s] at the time of the presentation of the cheque to the bank on 9/7/91. He cannot therefore blame the defendant for dishonouring his cheque more so when the dishonour was no[t] outright . . . The plaintiff was in deficit to the tune of h N755.68 Kobo at the time of presenting his cheque on 9/7/91.” With regards to the contention that the bank did not plead that it used the sum of N50,000 to liquidate the loan, the trial Judge held:– i “In my opinion, I find that this is implied in paragraph 9 of the pleadings of the defendant . . . The loan account is also pleaded in paragraphs 2 and 3 of the counter-claim which was not challenged by plaintiff’s pleadings.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA Augustine Chigozie Uba v. Union Bank of Nigeria Plc 265 a On the issue of a banker combining two accounts without the express permission of the customer, the trial Judge stated:– b “. . . It is the law and indeed banking practice that unless precluded by agreement express or implied from the course of business, the banker is entitled to combine two different accounts kept by the customer in his own right, even though at different branches of the same bank, and to treat the balance, if any, as the only amount c really standing to his credit . . . In the case in hand, I see nothing wrong in the defendant opening a Loan Account separate from plaintiff’s ordinary Current Account unless there was an express agreement that the two accounts should be operated distinct and d separate.” The learned trial Judge then concluded:– “On the whole I find that the defendant did not wrongfully and negligently dishonour the plaintiff’s cheque since he had no[t] suf- e ficient fund[s] covering the sum of N50,000 in his account. I therefore find that he is not entitled to the damages claimed.” The trial Judge also found the respondent’s counter-claim as proved and entered judgment against the appellant in the f sum of N907.42 at 26.5% interest from 17th July, 1992. The appellant was dissatisfied with this decision he therefore appealed to this Court. He filed nine grounds of appeal. Without their particulars, the grounds of appeal read:– g “(1) The learned trial Judge misdirected himself when he held that fact of using the sum of N50,000 paid into his ordinary current account by the appellant was used by the respondent to offset the ‘indebtedness’ of the appellant was implied in h paragraph 9 of the statement of defence and paragraphs 2 and 3 of the counter-claim. (2) The learned trial Judge erred when he refused to uphold the submission of the appellant that the fact of using the sum of N50,000 paid in by the appellant to offset his loan was not i pleaded by the respondent. (3) The learned trial Judge also erred in law and on the facts when he held as follows:– ‘Taking it for granted that the plaintiff had such a bal- j ance in his account and the defendant dishonoured the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA 266 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

cheque what is the liability of the bank to the plaintiff? Is a the bank liable on negligence? I do not think so.’ (4) The learned trial Judge also misdirected or not properly directed himself when he held as follows:– b ‘The mere fact that the defendant did not reflect the payment of the loan by plaintiff in exhibit 2 does not amount to negligence since it was not served on plaintiff before he issued his cheque exhibit ‘A’.’ (5) The learned trial Judge erred when he held that the sum c of N50,000 paid into his normal current account by the plaintiff was used by the defendant/respondent to offset the loan of N50,000. (6) The learned trial Judge erred and totally misunderstood the d case of Bank of the North v. Abdulsalami Dabare (1976) Nig. Commercial Law Reports 448 at 453 when he wrongly placed reliance on it in dismissing the plaintiff’s case when the facts of the case are different from the facts of the present case and therefore distinguishable. e (7) The decision of the court is against the weight of evidence before the court. (8) The learned trial Judge erred in law when he gave judgment for the respondent on its counter-claim when there was no f evidence of any demand made for the repayment of the overdrawn balance. (9) The Judge also erred when he gave judgment for the respondent on the ‘overdrawn’ balance when there was no g evidence of how the current account came to be overdrawn.” In compliance with Order 6 of the Court of Appeal Rules, 1981, both parties filed their respective briefs. The appellant h identified four issues for determination in this appeal. These are:– “(1) Was the fact that the respondent used the sum of N50,000 paid into his current account by the appellant to offset a loan granted to the appellant by the respondent. i (2) Can a bank combine two separate accounts of a customer without permission and the four knowledge [sic] of the owner of the account? (3) Was the bank negligent or not? j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA Augustine Chigozie Uba v. Union Bank of Nigeria Plc 267 a (4) Was the Judge right in giving judgment for the respondent in their counter-claim?” The respondent on the other hand formulated three issues for b determination in the appeal viz:– “(i) Whether the defendant bank was right in applying the sum of N50,000 lodged by the plaintiff in his current account towards the liquidation of the debit balance on his loan ac- c count; (ii) Whether the trial Judge was right in his finding that the defendant was not liable in damages for dishonouring the plaintiff’s cheque; d (iii) Whether the respondent proved its case regarding the counter-claim and was entitled to judgment for same.” I have carefully considered the issues formulated by the two parties. Taking into account the grounds of appeal filed, it is e my opinion that the issues formulated by the respondent are more apt to the determination of this appeal. In any case, I tried but could not make head or tail of the first issue formulated by the appellant. f At the hearing of the appeal Mr Maduabuchi, learned Counsel for the appellant, adopted the appellant’s brief and also proffered oral evidence in elucidation of some points. It g was submitted that it was wrong of the lower court to have held that the bank in its statement of defence had pleaded that it used the N50,000 which the appellant paid into his current account to offset his indebtedness to the bank. After considering paragraph 9 of the statement of defence and h paragraphs 2 and 3 of the counter-claim, it was submitted that what all these paragraphs said was that the appellant took a loan of N50,000 from the bank. It was contended that the act of granting a loan was a fact, which must be pleaded i and that using the N50,000 from the current account to offset a loan in the loan account must also be pleaded. It was submitted that, since these facts were not pleaded, any evidence in proof of these facts went to no issue and should be j disregarded (Okagbue v. Romane (1982) 5 S.C. 133 at 155 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA 268 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. and Odogwu v. Odogwu (1990) 4 N.W.L.R. (Part 143) 224 a at 232). It was also submitted that the trial Judge totally misunderstood the decision in the case of Bank of the North v. Abdul- b salami Dahare (1976) N.C.L.R. 448. Counsel extensively reviewed this case and submitted that in the Bank of the North case there was authorisation for the combination and that in our present case there was no such authorisation. It c was further submitted that the bank had no power to combine the accounts unless it was authorised by the owner. It was therefore submitted that the trial Judge was wrong to have held that the respondent could combine the two ac- d counts. It was further submitted that, once money is paid into customer’s account by a customer, the duty on the bank is to have same credited into the account of the customer. Failure e to do so is prima facie evidence of negligence and the bank would be liable in damages as held in Balogun v. National Bank of Nigeria (1978) N.C.L.R. 102 at 108 and Yesufu v. A.C.B. (1981) 1 S.C. 74. f With regards to the counter-claim, it was submitted that the Judge was wrong to enter judgment in favour of the respondent because there was no evidence of demand (Johnson v. Sobaki (1968) All N.L.R. 282). The counter-claim was g therefore premature and should have been struck out. It was also contended that there was no evidence before the court as to how the current account came to be overdrawn. Coun- sel then urged us to allow the appeal, set aside the judgment h of the lower court and enter judgment for the appellant in terms of his claim. Mr Orpin, learned Counsel for the respondent, adopted the respondent’s brief. It was submitted that the appellant’s i cheque was dishonoured because he did not have sufficient funds to his credit to meet the cheque and in the circumstances the respondent had no duty to honour same. It was contended that the two lodgements of N25,000 made by the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA Augustine Chigozie Uba v. Union Bank of Nigeria Plc 269 a appellant were used by the respondent with the full knowledge of the appellant to offset a loan of N50,000 granted to the appellant. In fact, the appellant had admitted that he took b the loan. It was further submitted that the respondent was justified in law in applying the appellant’s funds from his current account towards offsetting his debit balance on his loan c account. It was submitted that the law is that, unless precluded by agreement or course of business, a banker is entitled to combine all accounts kept in the same right by the customer. It was contended that in our present case there d was no evidence of any agreement to the contrary and the accounts are in the same right being personal accounts of the appellant. It was also submitted that the appellant did not contend that the loan was not yet due. e It was submitted that the counter-claim has been proved. The exhibits tendered conclusively showed that the appellant’s current account was in debit. The appellant also did not deny the counter-claim; he merely stated that the action f was premature. Counsel for the respondent then urged us to dismiss the appeal. From the evidence adduced at the lower court it is not in g dispute that the appellant was a customer of the respondent and operated two accounts with the respondent at its Gindiri branch. The relationship in law between a banker and its customer has been that of debtor and creditor (see Yesufu v. h African Continental Bank Ltd (1981) 1 S.C. 74 (see also at 92 where Bello JSC (as he then was) explained the principles of banking law and practice:– “When a bank credits the current account of its customer with a i certain sum, the bank becomes a debtor to the customer in that sum: Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110; and conversely when a bank debits the current accounts of its customer with a certain sum, the customer becomes a debtor to the bank in that sum: See Paget Law of Banking, 8th Edition, 9:84. j Whichever party is the creditor is entitled to sue, if demand for [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA 270 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

payment was not complied with, the other party for money lent: a see Joachimson v. Swiss Bank Corp. (supra). It follows from the foregoing that when a bank reverses a credit entry of a certain sum in the current account of its customer by b debiting the account with the same sum, such reversal in practical terms means that the bank has liquidated its liability as debtor to the customer.” With regards to combining two accounts belonging to a c single customer, the law is:– “Unless precluded by agreement express or implied from the course of business, the banker is entitled to combine different accounts kept by the customer in his own right, even though at dif- d ferent branches of the same bank, and to treat the balance, if any, as the only amount really standing to his credit.” See Halsbury’s Laws of England (3ed) Volume 2 paragraph 322 page 172. Commenting on the above statement of law e Bairamian FJ in British and French Bank Ltd v. Opaleye (1962) 1 All N.L.R. 26 at 28 said:– “The point about the customer having different accounts ‘in his own right’ is probably this, namely, that he has both accounts in f his name, and that neither account is a trust account.” In Garnett v. M’kewan (1872) L.R. 8 Ex. 10 the customer had accounts at two different branches. The two accounts were both in the same name. One of the accounts was in g debit and the bank, without giving notice, utilised the credit in the other account, and refused to honour cheques drawn on the other account. It was held that the bank was entitled to do that, because there was no special contract and no h usage proved to prevent the bank from doing that or to require the bank to give him notice before doing it. In our present case, the two accounts are in the name of the appellant. There is no evidence that either of the account is a i trust account. I therefore hold that the two account are kept by the appellant, in his own right. There is no express agreement that the bank is precluded from combining the two accounts nor could it be implied from the evidence that j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA Augustine Chigozie Uba v. Union Bank of Nigeria Plc 271 a such an agreement exist. The appellant has admitted receiving the loan from the bank. It was not contended that the loan was not due for payment. It is my opinion that in the b circumstances of this case the bank was right in combining the two accounts. My answer to the first issue is therefore in the affirmative. A bank will be held negligent if it failed to observe the c standard expected of a reasonable banker in respect of a cheque and the onus of proving that they were not negligent lies on the bank (United Nigeria Insurance Co v. Muslim Bank (West Africa) Ltd (1972) N.C.L.R. 9). A bank is also d bound to honour a cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque. Refusal to honour the cheque amounts to a breach of contract and would render the banker liable in damages. In e the instant case the bank has shown that the appellant did not have sufficient funds to pay the cheque. In fact at the time the cheque was presented, it has been proved that the account was in debit. The bank therefore was not negligent in refusing to honour the cheque. f On the issue that the trial Judge was wrong to hold that the respondent pleaded that it used the money in the current account to offset the appellant’s indebtedness, this is what g the trial Judge said:– “The learned plaintiff’s Counsel contended that the fact of using the said sum of N50,000 to liquidate the loan was never pleaded by the defence. In my opinion, I find that this is implied in paragraph 9 of the pleadings of the defendant where it is averred that h as at 9/7/91 when the plaintiff’s dud cheques were presented (sic) the plaintiff’s current account was actually in debit which stood at N755.68 when calculated the following day . . . The loan account is also pleaded in paragraphs 2 and 3 of the counter-claim which was not challenged by the plaintiff’s pleadings.” i I have read the whole of the statement of defence. I agree with the trial Judge that it could be implied from the pleadings that the bank used the N50,000 to offset the appellant’s loan. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammad JCA 272 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In the counter-claim the bank claimed the sum of N907.42 a from the appellant. The appellant did not file a reply to the counter-claim. The respondent also led evidence to establish the counter-claim. This evidence was not contradicted by the b appellant since the appellant did not file a defence to the counter-claim and did not rebut nor challenge the claim in his evidence, the counter-claim is deemed established. The trial Judge was therefore right to give judgment for the re- c spondent in respect of the counter-claim. In the circumstance, the appeal lacks merit and is dismissed by me. Accordingly I affirm the decision of Damulak J. The respondent is entitled to costs, which I assess at d N750. MUSDAPHER JCA: I have had a glance of the judgment of my learned brother, Muhammad JCA, just delivered with which I respectfully agree. For the same reasons contained e in the said judgment, which I adopt as mine, I too do ad- judge that the appeal is unmeritorious and is accordingly dismissed by me. I abide by the order for costs contained in the lead judgment. f OKEZIE JCA: I have had the privilege of reading in advance the lead judgment just delivered by my learned brother, Muhammad JCA, and agree with his conclusions. I also agree that this appeal be dismissed with cost as- g sessed at N750. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 273 a Union Bank of Nigeria Limited v. B.U. Umeh and Sons Limited b COURT OF APPEAL, ENUGU DIVISION EJIWUNMI, ACHIKE, TOBI JJCA Date of Judgment: 16 JANUARY 1995 Suit No.: CA/E/164/88

Contract – Construction of terms of – Duty of court c Contract – Exemption clause therein – Protection afforded – Interpretation of – Use of the “construction” d Facts Before 1981, the respondent who trade in various commodi- ties which are imported from various European countries, have been the customers of the defendants who are bankers e of considerable repute in this country and abroad. On the basis of that relationship, the respondent regularly used the facilities of the appellant to apply for and procure foreign exchange from the Central Bank. The complaint of the plaintiffs in a nutshell is that the defendant was wrong to f have debited their account with the sum of N163,606.98, which the defendant claimed was the amount owing to it by the plaintiffs. That debit, it is claimed, was the difference between the sum paid by the plaintiffs towards the procure- g ment of foreign exchange in Dollars by the defendants, and the actual sum paid by the defendants to the Central Bank of Nigeria for the plaintiffs. Upon being so advised the plaintiffs raised an objection to this debit and, as the position of h the defendants in the matter could not be shifted by the exchange of correspondence between them, the plaintiff commenced this action. The respondent contended that the appellant negligently i delayed in submitting exchange control documents to the Central Bank of Nigeria. The respondent therefore claimed against the appellant the sum of N163,606.98 being money had and received to the j use of the respondent or alternatively for negligence in [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

274 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. acting late with regard to the exchange control documents a not submitted to the Central Bank of Nigeria in time and non-utilisation of the allocation by the appellant. There was also a claim for interest. b The appellant denied that they negligently delayed submitting the exchange control documents. The learned trial Judge held that the appellant was negli- c gent on account of the delay it caused in the processing of the letters of credit. The claims of the respondent were granted. The appellant appealed to the Court of Appeal. Held – d 1. From the exemption clause incorporated in the letters of credit (exhibits IV, IV(a) and 10(b) the parties have agreed by this clause that the respondent plainly undertook to accept responsibility for all exchange risks in- e curred with the above collection. And by the said exemption clause, the respondent clearly authorised the appellant to debit their account with any amount due as a result of any exchange variation between the payment of f any sum in Nigerian currency and the foreign currency cancelled. 2. Where parties are ad idem on the terms of a contract, the function of the court is to give effect to the terms with- g out much ado. This is because the court must, in the construction of the terms of a contract, give effect to the intention of the parties. However, where a contract is reduced into writing and the court is faced with the con- h struction of a document, the question is not what the parties to the document may have intended to do by entering into that document but what the meaning of the words used in the document is. i 3. An exemption clause in a contract confers an immunity on a party from certain legal obligations. The items of exemption may be specifically mentioned or enumerated in the contract. The contract may merely contain general j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 275 a exemption clause or clauses in the event of breach or default. In either way, a court of law is bound to give effect to the provisions. An exemption clause is a very b sensitive part of a contract which must be strictly construed in favour of the party relying on it. It is an established principle of law that words of exemption in a contract should not in anyway be construed to import li- c ability but should be construed to extend immunity. This is because the maxim expressio unius exclusio alterius or its converse exclusio unius inclusio alterius does not apply to such a case. Parties who have freely traded in exemption clauses in a contract must be bound by them. d Appeal allowed.

Cases referred to in the judgment e Nigerian Adeniji v. Disu (1958) S.C.N.L.R. 408; (1958) 3 F.S.C. 104 African Re-Insurance Corporation v. Fantaye (1986) 1 N.W.L.R. (Part 14) 113 f Aghonmagbe Bank Ltd v. CFAO (1966) 1 All N.L.R. 140 Atuyeye v. Asharna (1987) 1 N.W.L.R. (Part 49) 267 Balogun v. Labiran (1988) 3 N.W.L.R. (Part 80) 66 g Ebba v. Ogodo and another (1984) 1 S.C.N.L.R. 372; (1984) 4 S.C. 84 Labiyi v. Anretiola (1992) 8 N.W.L.R. (Part 258) 139 h Mobil v. Johnson (1961) 1 S.C.N.L.R. 157; (1961) 1 All N.L.R. 83 Narumal and Sons Nigeria Ltd v. Niger Benue Transport Co Ltd (1989) 2 N.W.L.R. (Part 106) i Niger Dams Authority v. Lajide (1973) 5 S.C. 207 Nigerian National Supply Co Ltd v. Establishment Sima of Vaduz (1990) 7 N.W.L.R. (Part 164) 526 j Nwadike v. Ibekwe (1987) 4 N.W.L.R. (Part 67) 718 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

276 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Nwako v. Gov., River State (1989) 2 N.W.L.R. (Part 104) a 470 Obmiami Brick and Stone (Nig.) Ltd v. A.C.B. Ltd (1992) 3 N.W.L.R. (Part 229) 260 b Oduye v. Nigeria Airways Ltd (1987) 2 N.W.L.R. (Part 55) 126 Okorie v. Udom (1960) S.C.N.L.R. 326; (1960) 5 F.S.C. 162 c Onobruchere v. Ezegine (1986) 1 N.W.L.R. (Part 19) 799 R. Lauwers Import-Export v. Jozebson Industries Co Ltd (1988) 3 N.W.L.R. (Part 83) 429 d Foreign Photo Production Ltd v. Securicor Transport Ltd (1980) 1 All E.R. 556 e Counsel For the appellant: Izundu For the respondent: Umeadi f

Judgment EJIWUNMI JCA: (Delivering the lead judgment) The facts that have led to this action appear relatively simple. But the g legal arguments that have erupted in this appeal from the judgment of the lower court have been prodigious. Yet the simple facts appear to be as follows: h Long before 1981, the plaintiffs, who trade in various com- modities which are imported from various European countries, have been the customers of the defendant who are bankers of considerable repute in this country and abroad. On the basis of that relationship it would appear that the i plaintiffs regularly used the facilities of the defendant to apply for and procure foreign exchange from the Central Bank of Nigeria for the payment of goods imported by them from their exporters in Europe. In 1981 alone, the plaintiffs j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 277 a initiated ten such applications, and the present action arose from two of these applications. The complaint of the plaintiffs in a nutshell is that the de- b fendant was wrong to have debited their account with the sum of N163,606.98, which the defendant claimed was the amount owing to it by the plaintiffs. That debt, it is claimed, was the difference between the sum paid by the plaintiffs c towards the procurement of foreign exchange in dollars by the defendants, and the actual sum paid by the defendants to the Central Bank for the plaintiffs. Upon being so advised the plaintiffs raised an objection to this debit and, as the d position of the defendants in the matter could not be shifted by the exchange of correspondence between them, the plaintiffs commenced this action. Pursuant to the action the parties exchanged pleadings. The e defendants filed an amended statement of defence after the close of pleadings; the plaintiffs did not consider it necessary to amend their original statement of claim. At the trial, one witness gave evidence for the plaintiffs, while three f witnesses were called on behalf of the bank. A number of exhibits were also tendered during the hearing. Upon the basis of their pleadings, both parties led evidence. With the conclusion of their oral evidence their g learned Counsel addressed the court. The learned trial Judge thereafter delivered a considered judgment. By that judgment the defendant was held liable as the trial Judge said, inter alia:– h “By evidence before me, and on the authority of the cases cited the plaintiffs have established that they are entitled to recover N163,606.98 with which defendants debited plaintiffs’ account to the plaintiffs’ injury or damage. This is a case of breach of con- i tract occasioned by negligence. And the rule is that natural and normal loss resulting from the breach of contract is generally recoverable but exceptional and abnormal loss is also recoverable if it may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract as the probable j result of the breach.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 278 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

After so holding, the learned trial Judge upheld the total a claim of the plaintiffs in the sum of N163,606.98 described as capital debt with interest in the sum of N58,856.03 as claimed, bringing the total sum awarded to N222,463.01. b Upon that sum the learned trial Judge further awarded simple interest at the rate of 4% from 20th May, 1988 until payment of the total sum so awarded. The sum of N3,000 described as comprehensive costs was also made in favour c of the plaintiffs. Being very dissatisfied with the judgment and orders of the lower court the defendant has appealed to this Court. Pursu- ant to that appeal, the defendant filed five original grounds d of appeal. And with the leave of this Court, the defendant, now appellant, filed an additional 22 grounds of appeal. Thereafter, and acting pursuant to the Rules of this Court, the appellant’s brief of argument was filed and served. The e plaintiff, who shall now be referred to as respondent, also filed a respondent’s brief in response to that of the appellant. In that brief, its learned senior advocate Philip Umeadi, Esq., S.A.N., apart from replying to the arguments in the appel- f lant’s brief raised a preliminary objection to the 27 grounds of appeal filed by the appellant. The appellant then filed a reply brief to answer the objection raised to its grounds of appeal. g However, though the briefs of the parties have been duly filed and exchanged, the hearing could not commence immediately. This is because, when the appeal was to be heard, learned senior advocate for the respondent directed the at- h tention of the court to the several issues raised in the appeal. He then argued that the appellant has not identified which of the issues so raised were tied with any of the grounds of appeal filed. As the court took the view that there was merit i in that contention, the learned Counsel for the appellant, who also agreed with that observation, then sought for an adjournment to identify the issues with the grounds of appeal. The prayer for adjournment was thereafter granted. On j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 279 a the adjourned date, learned Counsel for the appellant made available to the court and the opposing Counsel, Philip Umeadi, S.A.N., a table showing which issues related to b particular grounds of appeal. The appeal then proceeded to hearing, and Counsel appearing adopted and placed reliance upon their respective briefs of argument. The aspect of the appeal which concerns the argument on the preliminary c objection raised by learned Senior Advocate, Umeadi, Esq. on the competency of all 27 the grounds of appeal filed in pursuance of this appeal was then taken. On the preliminary objection, the contention made for the d respondent before us and in the respondent’s brief, is that a ground of appeal alleging error of law and misdirection cannot be competent. He further submits that the two complaints are mutually exclusive, and that a ground of appeal e so framed cannot be good or a valid ground of appeal. For this submission he cites Labiyi v. Anretiola (1992) 8 N.W.L.R. (Part 258) 139 at 169B–E. And he therefore submits that grounds 2, 6, 7, 10, 12, 13, 14, 17, 18, 21, 22, 23, f 24 and 25, for the above reasons are incompetent and should be struck out. It was further argued for the respondent that, as the grounds of appeal which may be deemed competent, were not tied to any of the issues identified for the determi- g nation of the appeal, those issues could not be considered in this appeal. It was therefore urged that those issues be ignored in the determination of the appeal. In his reply before us learned Counsel for the appellant, h Izundu, Esq., argued that where errors of law and misdirection on facts were joined together in a ground of appeal, that ground was only irregular but not incompetent. For this proposition he cited the following decided cases: Kalu v. i Mbuko (1988) 3 N.W.L.R. (Part 80) 86 at 97; Labiyi v. An- retiola (supra); Nwadike v. Ibekwe (1987) 4 N.W.L.R. (Part 67) 718. He then submitted that this Court was not only bound by the decision of this Court in Kalu v. Mbuko (su- j pra), but that there was no rule of law or practice prohibiting [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 280 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. a ground of appeal from encompassing an error in law and a misdirection on facts. And he further urged the court to hold as obiter dicta the pronouncement of Nnaemeka-Agu JSC in Anretiola (supra) where at 169 His Lordship declared as b incompetent a ground of appeal alleging both error in law and misdirection. In his reply to this submission, Umeadi, S.A.N., for the respondent argued to the contrary. In his view, the question as to whether a ground was competent or c not was raised as an issue in that appeal. He then invited our attention to Akuchie v. Nwamadi (1992) 8 N.W.L.R. (Part 258) 214, where he contended that an objection similar to that raised in the instant appeal had been raised. He then d contended that in that appeal the Port Harcourt Division of our Court struck out such offending grounds of appeal. And finally he argued that, both in its reply brief and in the oral arguments before this Court, the appellant had not shown that the offending grounds of appeal adumbrated above were e competent and valid grounds of appeal. They should therefore be struck out. And as the issues could not also be sepa- rated from the competent and the incompetent grounds of appeal, the issues also could not form the basis for the de- f termination of the appeal. I think it is manifest that all the arguments employed by the learned Counsel for the parties before us and in their respective briefs of argument amount to whether the grounds g of appeal comply with the provisions of Order 3 Rule 2(2) of the Court of Appeal Rules, 1981. That rule will therefore be quoted. I will also quote sub-rules (3) and (4) to have in view the consequences that ought to flow from non- h compliance with Order 3 Rule 2(2). The provisions read thus:– Order 3 Rule 2(2) of the Court of Appeal Rules, 1981:– i “(2) If the grounds of appeal allege misdirection or error in law the particulars and the nature of the misdirection or error shall be clearly stated. (3) The notice of appeal shall set forth concisely and under distinct heads the grounds upon which the appellant intends j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 281 a to rely at the hearing of the appeal without any argument or narrative and shall be numbered consecutively. (4) No ground which is vague or general in terms or which b discloses no reasonable ground of appeal shall be permitted, save the general ground that the judgment is against the weight of the evidence, and any ground of appeal or any part thereof which is not permitted under this rule may be struck out by the court of its own motion or on application c by the respondents.” From the above rules of the Court of Appeal Rules, 1981 governing the filing of grounds against the judgment and/or orders of the lower court, it seems to me manifest that the d rules require that grounds of appeal are formulated in such a manner that the complaint of an aggrieved party appealing against the judgment and/or orders of a lower court are set out concisely and the alleged errors properly articulated. It e seems to me also that where the complaints relate to errors of law, particulars of such errors must be set down as clearly as possible in the ground of appeal. The same, it would appear, would apply where the aggrieved party is concerned f with misdirections in the judgment or order of the lower court. For a greater understanding of the purport of these rules it is desirable to refer to pronouncements that had earlier been g made upon them in decided cases of this Court and the Su- preme Court. In this regard I will begin with the examination of Nwako v. Governor, River State (1989) 2 N.W.L.R. (Part 104) 470, where this Division of this Court was called upon h to determine the competency of a ground of appeal as has been raised in the instant appeal. Kolawole JCA, delivering the lead ruling in that appeal, took the opportunity of reviewing at 477–478 some of the dicta that had earlier been i expressed on the provisions of Order 3 Rule 2(2) of the Court of Appeal Rules. In this respect, he said at 477–478:– “I shall now consider the cases on this vexed question. In Anachuna Anyaoke and 3 others v. Dr. Felix C. Adi and others (1986) 3 N.W.L.R. (Part 31) 731 at page 741, Uwais, JSC in con- j struing Order 7 Rule 2(2) of the Supreme Court Rules, 1977 which [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 282 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

is in pari materia with Order 3 Rule 2(2) of the Court of Appeal a Rules, 1981 observed as follows:– ‘The effect of this is that once an “error in law” or “misdirection” is alleged in a ground of appeal the particulars of b error or misdirection alleged must be given.’” In Vincent Okorie and three others v. Philip Udom (1960) S.C.N.L.R. 326; (1960) 5 F.S.C. 162. Ademola CJF observed at 164 as follows:– c “Of the three grounds of appeal filed, objection was taken by Counsel for the respondents to ground (c) which was one of 2 misdirection on the ground that in the three instances quoted the particulars of the various misdirections were not given. It has been pointed out from time to time that merely quoting portion of a d judgment, without showing in what respect the Judge misdirected himself, is worthless. Counsel was not allowed to argue this ground of appeal and it was accordingly struck out.” Also in J.A. Adeniji and another v. Saka Disu (1958) e S.C.N.L.R. 408; (1958) 3 F.S.C. 104, Abbott FJ observed thus:– “. . . A ground of appeal alleging misdirection should always, in addition to quoting the passage where misdirection is alleged to f have occured, specify the nature of the misdirection alleged.” Kolawole JCA, after referring to the comments of Oputa JSC in Saka Atuyeye v. E.O. Asharna (1987) 1 N.W.L.R. (Part 49) 267 at 279E, then held that:– g “The various judicial interpretations given to Order 3 Rule 2(2) of the Court of Appeal Rules, 1981 or Order 7 Rule 2(2) of the Su- preme Court Rules demand that a ground of appeal which alleges an error in law or misdirection in law must comply with three con- h ditions for such ground to be a valid ground of appeal, it must:– (1) quote the passage of the judgment where misdirection or error in law is alleged to have occurred; (2) specify the nature of the error in law or misdirection; and i (3) give full and substantial particulars of the alleged error or misdirection.” Although learned Counsel for the appellant has in his oral address before this Court referred to the case of R. Lauwers j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 283 a Import-Export v. Jozebson Industries Co Ltd (1988) 3 N.W.L.R. (Part 83) 429 at 443, I do not think I need to dwell on it in any great detail. Suffice it to say that in that case the b Supreme Court, per Agbaje JSC, apparently upheld grounds of appeal which do not contain particulars of error under a separate heading. In this appeal what is in issue is whether it is permissible to have errors in law and misdirection on facts c co-joined in a ground of appeal. Hence learned Counsel for the appellant took the view that the dictum of Nnaemeka- Agu JSC in Labiyi Anretiola (1992) 8 N.W.L.R. (Part 258) 139 at 169 is obiter. The dictum reads:– d “So much as it is true that a ground of appeal which is a misdirection is different from, and in fact mutually exclusive of one which is an error in law (for which see Nwadike v. Ibekwe (1987) 4 N.W.L.R. (Part 67) 718 at 744) for the simple reason that the for- e mer relates to the court’s statement of a party’s case whereas the latter relates to the determination by the court . . .” Learned senior Counsel for the respondent, P. Umeadi, S.A.N., has however argued that the above-quoted dictum of f Nnaemeka-Agu JSC should not be regarded as an obiter dictum. I think it must first be observed that whether the observation of Nnaemeka-Agu JSC is obiter depends on whether the observation relates to a point at issue in the g appeal or not. In this regard it must also be borne in mind that each judgment of the Justices of the Supreme Court or the Justices of the Court of Appeal is expected to be the decision of the particular justice in respect of the case. In- h variably, the justices of this Court express their concurrence with the lead judgment delivered by one of their brother justices who was assigned to write it. However, where a justice in a panel feels that it is necessary to emphasise an i aspect of the appeal which has not been touched upon in the lead judgment he is absolutely free so to do. It is therefore not enough to argue, as was done in this appeal, that the question raised by Nnaemeka-Agu JSC with regard to the j competency of the ground of appeal in his judgment was not [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 284 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. dealt with in the lead judgment delivered by Karibi-Whyte a JSC. What has to be shown is that the matter was not an issue before the court. b In that case, it seems to me though that the issue was canvassed by the parties in their briefs as was made clear by Nnaemeka-Agu JSC in the course of his judgment. But as the central issue before the court concerned the jurisdiction c of the court to determine the provisions of an edict vis-à-vis the Constitution and the relevant Decrees of the Federal Military Government, Karibi-Whyte JSC in his lead judgment did not advert to that aspect of Counsel’s argument, as d he most probably felt that it was not necessary for the determination of the real issue between the parties. But Nnaemeka-Agu JSC felt differently. Hence he dwelt on this aspect of the appeal in his own judgment, while agreeing e with Karibi-Whyte JSC on the core issue raised in the appeal. It can therefore be said that, though the issue was before the court, the merit of the appeal did not depend on it. Be that as it may, and in the context of the reference to the case of Nwadike v. Ibekwe (supra), by Nnaemeka-Agu JSC f in Labiyi v. Anretiola (supra), it is necessary to examine what was said by him in Nwadike v. Ibekwe (supra). In that case, an appeal to the Supreme Court, the learned Counsel for the respondents filed a preliminary objection against the g grounds of appeal filed by the appellants. The thrust of the objection was that each of the grounds of appeal filed by the appellants was on facts and was therefore contrary to the provisions of section 213(3) of the Constitution of the Fed- h eral Republic of Nigeria and deserved to be struck out. At the hearing of arguments before the Supreme Court, learned Counsel for the appellants reportedly conceded that grounds 2, 3 and 8 of the grounds of appeal did not raise questions of i law alone but that they raised questions of fact or of mixed law and fact. Those grounds were apparently abandoned, as the courts only had to consider the competency of the appellants’ other grounds of appeal, i.e. grounds 4, 5, 6 and 7. But j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 285 a before doing so, the Supreme Court, per Agbaje JSC, observed at 727 that:– “A decision on the point whether a ground of appeal raises ques- b tions of law, alone certainly does not depend on the label an appellant gives to the ground in question. Such decision on examination of the ground of appeal as framed together with the particulars thereof before resolving the point at issue (see S.U. Ojemen and 3 others v. His Highness William O. Momodu II and 2 others (1983) c 1 S.C.N.L.R. 188; (1983) 3 S.C. 173.” Agbaje JSC then considered those grounds of appeal and concluded that, though the appellants in that appeal labelled their grounds 1 and 4 grounds of law, they do in fact raise d questions of fact. These grounds were also struck out. But the objection with regard to grounds 5–6 and 7 were overruled as the court took the view that they were grounds of law. Nnaemeka-Agu JSC in his judgment also agreed with e the conclusions reached by Agbaje JSC as stated above. Nnaemeka-Agu JSC amplified further the distinction between a ground of appeal of mixed law and facts and one complaining of error in law when he said at 743, 744 thus:– f “Because of the problem that has arisen in this particular appeal and the frequency of its occurrence in many other appeals of recent I deem it necessary to attempt some re-examination of some principles which can serve as useful guides in this rather difficult question of grounds of law on one hand and of fact and of mixed g law and fact on the other, in this regard, I shall refer to and adopt the very illuminating judgment of Eso, JSC in Oghechie v. Ono- chie (supra) at pages 490–493. From this and other decisions on the point, it appears to me that a ground which complains that the h judgment is against the weight of evidence is a ground of fact. (See Oghechie v. Onochie) supra at pages 491. And findings of facts are matters within the province of the court of trial: Clarke v. Edingburgh etc Tramways (1919) S.C. (HL) 35, Fatoyinbo v. Wil- liams (1956) S.C.N.L.R. 274; (1956) 1 F.S.C. 87. In general terms i it can be said that all grounds of appeal which raise facts which warrant some determination either way, are grounds of fact: Ed- wards (Inspector of Taxes) v. Bairstow and another (1955) 3 All E.R. 48 at 56, Cooper v. Stubbs (1925) 2 K.B. at page 277, Curie v. Inland Revenue Commissioners (1921) K.B. at page 536. Where j however, the question raised by the grounds is one of law applied [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 286 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

to disputed facts; or the grounds raises partly law and partly facts a it is a ground of mixed law and fact. The ground with its particulars ought to be regarded as a whole.” His Lordship at 744–745 of his judgment then went on to b consider when a ground of appeal was that of law. Though his Lordship admitted that the classification was not exhaus- tive, it is useful to note them here:– “(i) It is an error in law if the adjudicating tribunal took into c account some wrong criteria in reaching its conclusion or applied some wrong standard of proof or, if although applying the correct criteria, it gave wrong weight to one or more of the relevant factors: See O’Kelly v. Trusthouse Forte Plc (1983) All E.R. at page 468. d (ii) Several issues that can be raised on legal interpretation of deeds, documents, terms of art, words or phrases, and inferences drawn therefrom are grounds of law: Oghechie v. Onochie (supra) at pages 491–492. e (iii) Where a ground deals merely with a matter of inference, even if it be an inference of fact, a ground framed on it is a ground of law, provided it is limited to admitted or proved and accepted facts. Edwards v. Bairstow (supra) at page 55 HL. For, many years, it has been recognised that inferences f to be drawn from a set of proved or undisputed facts, as distinct from primary facts, are matters upon which an appellate court is as competent as the court of trial. See: Benmax v. Austin Motors Ltd (1945) All E.R. 326 at page 327. g (iv) Where a tribunal states the law on a point wrongly, it com- mits an error in law. (v) Lastly, I should mention one class of grounds of law which have the deceptive appearance of ground of fact, id est, h where the complaint is that there was no evidence or no admissible evidence upon which a finding or decision was based. This is regarded as a ground of law, on the premises that in a jury trial there would have been no evidence to go to the jury. Before a Judge sitting with a jury could have left i a case to the jury there ought to have been more than a scin- tilla of evidence. So, for this rather historical reason, a ground of appeal complaining that there was no evidence, or no admissible evidence, upon which a decision or finding was based has always been regarded as a ground of law j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 287 a (see Odgers on Pleading and Practice (20th Edition) page 375; also the decision of the House of Lords in Edwards (Inspector of Taxes) v. Bairstow (supra) at page 53. In Og- bechie v. Onochie (supra) at page 491, paragraph 14, my b Lord Eso, JSC, citing with approval an article by CT Emery in Volume 100 LQR held:– ‘If the tribunal purports to find that a particular event occurred although it is seized of no admissible evidence c that the event did in fact occur, it is a question of law.’” But the observation of His Lordship which is germane to the contention of the respondent in this appeal is where Nnaemeka-Agu JSC, at 744–745, said:– d “Let me pause here to observe that a ground of appeal cannot be an error in law and a misdirection at the same time, as the appellants grounds clearly postulate. By their very nature one ground of appeal cannot be the two. For the word ‘Misdirection’ originated e from the legal and constitutional right of every party to a trial by jury to have the case which he had made either in pursuit or in defence, fairly submitted to the consideration of the tribunal (see Bray v. Ford (1895) A.C. 44 at page 49. In our system in which the Judge is Judge and jury a misdirection occurs when the Judge f misconceives the issue, whether of facts or of law, or summarises the evidence inadequately or incorrectly (see Chidiak v. Laguda (1964) 1 N.M.L.R. 123 at page 125. He may commit a misdirection either by a positive act or by non-direction. But when his error g relates to his findings it cannot properly be called a misdirection it could be an error in law. This is why the appellant’s grounds 4–7 and 8 said to be error in law and misdirection are, above every other defects, obvious incongruities.” Before expressing my opinion on the observation of his h Lordship, Nnaemeka-Agu JSC noted above, may I be permitted to say the following first. It is clear from the foregoing review of the relevant authorities that it would appear that a valid ground of appeal to this Court must be done in i faithful obedience to Order 3 Rule 2(2) of the Court of Ap- peal Rules, 1981, the provision of which I have quoted earlier in this judgment. This means as already noted that the ground of appeal must (1) quote the passage of the judgment j where misdirection or error in laws alleged to have occurred; [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 288 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. specify the nature of the error in law or misdirection; and (2) a give full and substantial particulars of the alleged error or misdirection. It may then be argued, as learned Counsel for the appellant has done in this case, that the provisions do not b say that errors in law and misdirection on facts cannot be alleged in one ground of appeal. May I pause at this juncture to refer to Nigerian National Supply Co Ltd v. Establishment Sima of Vaduz (1990) 7 N.W.L.R. (Part 164) 526, where the c issue before the Supreme Court was whether the ground of appeal filed on appeal from the Federal High Court to the Court of Appeal was valid. In that case, after the Justices of the Supreme Court had examined the offending grounds of d appeal, it was the unanimous decision of the court that the two grounds of appeal were at best grounds of mixed law and fact and at worst grounds of fact alone which requires leave of the Federal High Court or Court of Appeal to give constitutional validity to the notice of appeal. See the dictum e of Karibi-Whyte JSC at 547 which reads:– “Counsel should not assume that the mere description of [a] ground of appeal as one of law is sufficient to enable it [to] scale the constitutional hurdle of seeking leave if it is in substance a f ground of mixed law and fact, or of facts simpliciter.” From all I have said above it seems to me that the proper thing to do when framing grounds of appeal, those where errors in law are alleged simpliciter should be so framed and g those wherein misdirection on facts are alleged should also be framed separately. That in practice would enable the appellant to decide whether he would require leave to appeal or not. But having said that and having record to the very h thin line that sometimes exist between error in law and misdirection upon facts, it may not be possible to achieve the objective earlier postulated. The courts would still have as its guiding principle to give its most liberal interpretations to i ascertain the questions it involves. In the instant appeal, the appellant has filed a total of 26 grounds of appeal. In some of the grounds of appeal, the appellant predicated his complaints by alleging errors in law j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 289 a and misdirection. The grounds of appeal where that was done are 2, 6, 7, 13, 14, 22 and 24. But untidy as it may seem, the purport of the grounds of appeal is what the court b has to look at. And while these grounds of appeal, like the others filed by the appellant, have not been framed in faithful compliance with the provision of Order 3 Rule 2(2) of the Court of Appeal Rules, 1981, I do not consider that any c of the grounds of appeal should be struck out for that reason alone. The learned Counsel for the appellant can justifiably argue, as he has done, that the respondent has not shown that it was prejudiced in that the purport of the grounds of appeal was lost on them. I will therefore dismiss the respondent’s d preliminary objection. I now proceed with the consideration of the merits of the appeal as argued in the brief. The appellant in his brief set out 15 issues for the determi- e nation of this appeal. It is impossible to comment adequately on these issues. They are as prolix, if not more so, than the grounds of appeal upon which they are based. A careful reading of these issues should disclose that some of them are f merely repetitive. It is my view that the appellant has unnecessarily inflicted on the court both an unwieldy set of grounds of appeal followed by an incongruous set of issues. Be that as it may, I will set down the issues identified by the appeal. They read:– g “(1) Whether on the pleadings and evidence the learned trial Judge was right in deciding that the plaintiff (respondent) proved the acts of negligence it claimed against the defendant (appellant) in respect of letters of credit (hereinafter) h called LC Nos. 847/81 and 864/81. (2) Whether on the pleadings and evidence it is proved that [an] allocation of foreign exchange was made by the Central Bank of Nigeria in respect of LC 847/81 or LC 864/81, and i if not whether the learned trial Judge rightly found that the appellant did not utilize [the] ‘provisional allocation’ the Central Bank made for the said LCs. (3) Whether the judgment of the learned trial Judge was based on issues joined in the pleadings and on legal evidence ad- j duced at the trial and, if not, whether the learned trial Judge [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 290 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

was justified in examining if there was any other act of a negligence whatever against the defendant other than those on which issues were joined in the parties’ pleadings. (4) Whether having regard to the pleadings and evidence the b learned trial Judge was justified to find that exhibits 4, 16, 17, 18 and 19 were evidence of negligence which caused damage to the respondent. (5) Whether on the pleadings and evidence the learned trial Judge rightly found that the respondent proved that the al- c leged negligence was the cause or effective cause of the alleged loss it suffered. (6) Whether the Central Bank of Nigeria has absolute powers or discretion to allocate or refuse to allocate foreign ex- d change for the LC 847/81 and LC 864/81, even after accepting and approving the applications thereof and, if not, whether the learned trial Judge rightly held otherwise. (7) Whether on the pleadings and evidence the learned trial Judge rightly held that the alleged damage of refinancing e agreement or its effect was foreseeable by the parties or that it was within the contemplation of the parties at the time of the contract. (8) Whether the learned trial Judge rightly applied the doctrine f of res ipsa loquitur in the circumstances of this case. (9) Whether it was proved that, but for the alleged negligence of the appellant, the respondent’s overseas exporters would not have been paid by the Central Bank under the Refinanc- g ing Agreement, 1984. (10) Whether on the pleadings and evidence the learned trial Judge was right to hold that payments made in 1981 by the respondent for the LC 847 and LC 864 were full settlements for the values of the said LCs and not deposits or provi- h sional payments. (11) Whether on the evidence the respondent proved that it suffered damage and was entitled to its claims, and, if so whether exhibits 10, 10(a), 10(b) and 11, 11(a), 11(b) effec- i tively provided the appellant exemptions from liabilities for the damages/losses/acts claimed or complained [of] by the respondent and whether the learned trial Judge’s finding that the said exhibits were inapplicable because of fundamental breach was correct. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 291 a (12) Whether in the circumstances of the case the learned trial Judge rightly invoke the equitable doctrine of ‘money had and received’ to award the respondent its claim. b (13) Whether the learned trial Judge correctly evaluated the evidence of the parties on equal footing or whether he prejudicially and unfairly evaluated and assessed the appellant’s case. (14) Whether the Judge made unfavourable, irrelevant and c unwarranted remarks against the appellant which influenced his whole judgment and decision. (15) Whether the learned trial Judge ascribed correct probative values to the evidence in court.” d The respondents, however, having regard to the brief settled on their behalf; their Counsel, Umeadi, Esq., S.A.N., has taken the view that the issues for the determination of the appeal are as follows:– e “(i) Whether the contracts in dispute as borne out by exhibits 10, 10(a) and 11, 11(a) are governed by the principles dealing with documentary credits and stated in the Supreme Court decision in Akinsanya v. U.B.A. Ltd (1986) 4 N.W.L.R. (Part 35) 273. f (ii) If the answer in issue (i) supra is yes after the effluxion of performance dates of 15/4/82 and 30/3/82, is the appellant still entitled to take cover under any exception or exemption clause 2 years after those dates? g (iii) Are international agreements (refinancing agreement) and treaties if not embodied or given effect in a Decree superior to our organic law and can overreach and affect contractual rights of ordinary Nigerians who are the parties to such h agreements? Whether it is reasonable to infer negligence from exhibits 4, 16, 17, 18 and 19 on the evidence. (iv) Is the learned trial Judge wrong to have awarded the amount claimed with interest and under the doctrine of equity for money had and received? i (v) Is the appellant entitled to any relief based on its submissions under what it termed omnibus considering the evidence in the proceedings.” After a very careful appraisal of the issues set down above j for the determination of this appeal by the parties it seems to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 292 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. me, however, that the pertinent questions for consideration a are as follows:– “(i) Whether the lower court was right to have found the appellant liable in negligence? b (ii) Whether it is unreasonable to infer negligence from exhibits 4, 16, 17, 18 and 19. (iii) Whether on the pleadings and evidence, the learned trial Judge rightly found that the respondent proved that the al- c leged negligence was the cause or effective cause of the alleged loss it suffered. (iv) Whether the principles of res ipsa loquitur is applicable in the circumstances? (v) Whether the contracts in dispute as borne out by exhibits d 10, 10(a) 10(b) and 11, 11(a), 11(b) are governed by the principles dealing with documentary credits and stated in the Supreme Court decision in Akinsanya v. U.B.A. Ltd (1986) 4 N.W.L.R. (Part 35) 273. e (vi) Are international agreements (Refinancing Agreement) and treaties if not embodied or given effect in a Decree superior to our organic law and can overreach and affect contractual rights of ordinary Nigerians who are not parties to such agreement. And whether the said Refinancing Agreement f was foreseeable? (vii) Whether the Central Bank of Nigeria has absolute powers or discretion to allocate or refuse to allocate foreign exchange for the LC 847/81 and LC 846/81, even after accept- g ing and approving the applications thereof and if not whether the learned trial Judge rightly held otherwise. (viii) Whether on the pleadings and evidence the learned trial Judge rightly invoked the equitable document of ‘money had and received’ to award the respondent its claim.” h But before considering the argument of Counsel for the appellant in its brief in support of these issues, and the response made thereto in the respondent’s brief, it is, I think, desirable that reference be made to the pertinent portion of i the judgment bearing upon these issues. In this regard the trial court at 222–227 said:– “As the court understands the matter on the substance of evidence before it the plaintiffs’ case is that the defendant delayed j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 293 a plaintiffs’ business in that defendant did not exercise due care, diligence and promptitude in handling LC 847/81 and LC 864/81 with LC 846/81; that sequel to the delay, the plaintiffs’ business into 1984 period of exchange rate crisis (which defendants attrib- b uted to ‘re-financing agreement’) resulting in a ‘further charge’ or ‘shortfall’ of N163,606.97; and that the defendants instead of ab- sorbing the ‘shortfall’ debited the plaintiffs’ account with the ‘shortfall’ on grounds that:– c (a) There was no delay; and if there was delay it arose because of the plaintiffs’ failure to submit their current Tax Clear- ance Certificate to the defendant at the time of opening LC 857/81. That the defendants were waiting for ‘cable claim’ from the defendant’s overseas correspondent bank in New d York and that (b) In any case, approval, rejection or release of foreign exchange was a matter at the absolute discretion of the Central Bank of Nigeria.” e The learned trial Judge in the course of his judgment then considered the following questions at 227–235 of the printed record. These are:– “(i) Whether the plaintiffs submitted current Tax Clearance f Certificate at the time they opened LC 847/81. (ii) Whether the delay arose from the fact that the Central Bank of Nigeria had absolute discretion in approving, rejecting or releasing foreign exchange. g (iii) Was there delay in handling LC 847/81, LC 864/81 and LC 846/81.” In relation to the first question, the learned trial Judge then considered the evidence before him, namely that of the only h witness for the respondent, the evidence of DW1, and exhibit 4, a letter written by the appellant calling for a tax clearance certificate in respect of LC 847/81, and observed thus: i “These extracts from the testimony of DW1 proved not only by preponderance of evidence, but even also beyond reasonable doubt, that the plaintiffs submitted current Tax Clearance Certifi- cate at the time the plaintiffs opened LC 847/81, LC 864/81 and LC 846/81. On the basis of this finding of fact, the court believes j that exhibit 4 calling for Tax Clearance Certificate in respect of [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 294 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

LC 847/81 was an unfair if not dishonest attempt to deny truth, to a wit:– ‘The truth that plaintiffs had submitted to the defendants the relevant Tax Clearance Certificate (a vital document) with- b out which LC 847/81 or an other letter of credit would not have been opened in November, 1981 or at all.’” The learned trial Judge then went on to hold thus:– “The court therefore finds and holds that on the basis of the facts in evidence the plaintiffs discharged their duty in respect of the c contract in so far as submission of Tax Clearance Certificate was concerned; and so the plaintiffs were not responsible if any delay occurred as a result of late submission or non-submission of Tax Clearance Certificate to the Central Bank of Nigeria in respect of d LC 847/81 or LC 864/81.” On the second question regarding whether the delay was caused by the Central Bank of Nigeria, who, it was argued before that court, had the absolute discretion of approving, e releasing or rejecting foreign exchange, the learned trial Judge refuted that contention in his findings when he said at 228–229:– “The court finds that the notion (or is it myth?) of ‘absolute discre- f tion’ on [the] part of the Central Bank of Nigeria projected by defendants’ Counsel cannot be sustained as true, in view of the defendants’ assertion in paragraph 7 of that Amended statement of defence to the effect that the Central Bank of Nigeria released For- eign Exchange in respect of LC 864/81 following a strong repre- g sentation made by the defendants.” And the learned trial Judge then continued:– “By simple logic and reasoning this qualification shows that in truth, the Central Bank of Nigeria had no ‘absolute discretion’ h since the exercise of the discretion was subject to a ‘strong representation’ by the defendants. The defendants were obviously in default of their duty by not making the ‘strong representation’ timeously but waited until there was trouble: until after things had fallen apart: and until after [the] Exchange Rate of [the] Naira had i fallen in [the] international market.” Upon these findings, the learned trial Judge held thus:– “The defendants were therefore responsible for any delay that arose because, other faults attributable to defendants apart, the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 295 a defendants did not make their ‘strong representation’ timeously, it was like medicine after death . . .” As to whether the delay was caused not only by the Central b Bank but also because of the “cable claim” in respect of the request for foreign exchange for LC 864/81, the learned trial Judge had this to say:– “The plaintiffs had asserted that the defendants lost or misplaced c the Tax Clearance Certificate and Bill of Lading previously delivered to them in respect of LC 847/81. The defendants denied [that]. But the court is satisfied that the combined effect of evidence of DW1 corroborating PW1, PW3 and exhibit 4 is an irrefu- table proof that the defendants lost those documents, otherwise, d where is the necessity for or relevance of exhibit 47. The defendants tried to pass the buck not only to the Central Bank of Nigeria on the excuse of ‘absolute discretion’ which has been found untenable; but also to the defendant’s overseas correspondent bank in e New York. leaning on ‘Cable claim as the pretext’. However, the court notes that the defendants were expected to make proper arrangements with their overseas correspondent bank; and that the defendants were responsible if any delay occurred as a result of faulty or deficient or inappropriate arrangements, causing late arri- f val of the relevant ‘cable claim’ in respect of LC 864/81.” On the issue of negligence and having regard to the findings and the decision thereon by the lower court, the submission and contention of the learned Counsel for the appellants g appears to fall under the following: “(i) was negligence established: (ii) whether the learned trial Judge founded his decision on negligence upon pleaded issues. h (iii) whether the learned trial Judge made out a case other than that which the respondents pleaded.” Was negligence established: In the appellant’s brief, it was argued for the appellants that to succeed in an action in i negligence the respondents had to plead and prove that the appellant owed it a duty of care which was breached by the appellant. The manner of the breach also had to be established and that, as a result [of the breach], the respondents j suffered damage or loss. For this proposition, reference was [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 296 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. made to Bullen Leak and Jacob Pleadings (12ed) paragraphs a 684–685; Aghonmagbe Bank Ltd v. CFAO (1966) 1 All N.L.R. 140; Nigerian Housing Development Society v. Mummuni (1977) 2 S.C. 72 at 80–82. b And for the proposition that the respondent’s evidence also had to show that on a balance of probabilities the most likely cause of the damage he suffered was due to the appellant’s negligence and not the negligence of another, paragraph 583 c of Charlesworth on Negligence (5ed) was cited. It was therefore the view of learned Counsel, having regard to his submissions in appellants’ brief, that the acts of negligence complained of by the respondents were as pleaded in para- d graphs 5, 6, 7, 9 and 16(a) of their statement of claim. And he further argued that paragraphs 10(a) and 10(b) thereof were the particulars given of the appellant’s negligence, while paragraphs 10(c)–(d) were not relevant or related to e any acts of negligence of the appellants. And these various averments he claimed were denied by the appellant in paragraphs 7, 8, 9, 10, 12, 13 and 16(a) of its amended statement of defence. It was therefore the con- f tention of learned Counsel for the appellant that upon the pleadings of the parties only two acts of negligence were joined as issues, namely:– (a) Whether the appellant submitted the respondent’s g foreign exchange documents for LCs 847 and 864 late to the Central Bank of Nigeria for processing (i.e. on 18th February, 1982 and 11th March, 1983 respectively) resulting in their being paid under the h Refinancing Agreement of 1984; and (b) Whether the Central Bank allocated foreign exchange for the LCs which the appellant failed to transmit to the respondents’ suppliers before the in- i ception of the Refinancing Agreement of 1984. It was also contended for the appellant that the respondent’s witness also testified in chief that he commenced the action because the appellant negligently delayed action on the two j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 297 a letters of credit, which led to their being debited with the sum of N165,606.98. He also contended that under cross- examination the witness identified the duty owed by the b appellant thus: “It is the duty of the bank to rush the custom bill of entry to the Central Bank of Nigeria for immediate payment to overseas sellers. Furthermore, the respondent’s witness also stated that once the documents are submitted to c the appellant, they do not know the processes that the documents are subjected [to] before the sums of money in foreign exchange applied for are paid to their overseas sellers”. With regard to LC 847, the respondents, it was claimed, through d their witness testified that he did not consider seven days’ lapse between the forwarding of the exchange control documents and their submission to the Central Bank to be a delay. It was submitted that the evidence given by this wit- e ness that the complaint about delay with regard to LC 847 was because the naira equivalent earlier paid to the appellant was not forwarded timeously to the Central Bank went to no issue, the respondents having not so pleaded. f It was also argued for the appellant that there was no evidence that there had been a delay in the submission of LC 847/81, due to the loss by the appellant of the relevant tax clearance certificate and bill of lading relevant to the LC. g The learned trial Judge, it was therefore submitted, fell into error when he inferred a delay from the letter, exhibit 4, written by the appellant to the respondent demanding for those documents. It was further submitted for the appellant h that the learned trial Judge made out a case other than that pleaded by the respondent by holding that the appellant delayed for a whole year the submission of LC 847/81 to the Central Bank, and that it failed to utilise an alleged alloca- i tion of foreign exchange. On LC 864/81, it was also argued by learned Counsel that the learned trial Judge failed to accept the unchallenged evidence of the witness for the appellant, DW3, that cable j claim was one of the vital documents for foreign exchange. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 298 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

And that the cable claim in respect of this LC 864/81 was a received by the appellant on 2nd June, 1982 and forwarded to the Central Bank on 10th June, 1982. It was therefore argued for the appellant that it was in sup- b port of this evidence that exhibits 4, 16, 17, 18 and 19 were tendered and pleaded in paragraph 7 of the appellant’s amended statement of defence. It was also contended that, as exhibits 16–19 were pleaded and tendered for a specific c purpose, i.e. to traverse the respondent’s claim that exchange documents for LC 864/81 were submitted to the Central Bank after a period of 12 months from the time they were received by the appellant, the learned trial Judge was wrong d to have used them otherwise. For this contention reference was made to Ngwu v. Nnaji (1991) 5 N.W.L.R. (Part 189) 18, 30; Attorney-General Oyo State v. Fairlakes Hotels Ltd (1989) 5 N.W.L.R. (Part 121) 255 at 285. The learned Coun- e sel for the appellant therefore submits that the learned trial Judge’s decision that the mere fact that application for LC 864/81 was rejected and resubmitted in exhibits 16, 17, 18 and 19 constituted a delay occasioning liability in tort f was not borne out by any admissible evidence before him. The basis of that contention is that the respondent did not in its pleadings plead that fact, nor did its lead evidence in support thereof. The following cases were cited both to g support that submission, and to invite this Court to hold that the learned trial Judge failed to adhere in his judgment to the issues as pleaded and joined by the parties (see Ajide v. Kelani (1985) 3 N.W.L.R. (Part 12) 248 at 271; S. Sagay v. h New Independence Rubber Co Ltd (1977) 5 S.C. 235 at 247– 250; Lawal v. G.B. Ollivant (Nig.) Ltd (1972) 1 All N.L.R. 207 at 215). The instances or pieces of evidence on which the learned i trial Judge rested the finding of negligence, such as the cable claim, the failure of the appellant to state in the application to the Central Bank “stock fish” instead of food, were erroneous inferences upon facts pleaded and given evidence to j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 299 a find delay by the Judge. With regard to the evidence led by DW1 on this aspect of the matter that the appellant acted correctly and in conformity with the Central Bank guide- b lines, the appellant contends that the respondent ought to have made an issue of the pleadings or given evidence in rebuttal. Their failure to do so should have been held as fact to their claim in negligence. And on this point, he referred to c Agbonifo v. Aiwereoba (1988) 1 N.W.L.R. (Part 70) 325 at 342, 343 and 347; Boshali v. Allied Commercial Ltd (1961) 2 S.C.N.L.R. 322; (1961) All N.L.R. 917 at 921; West Afri- can Shipping Agency v. Kalla (1978) 3 S.C. 21 at 31; Ak- eredolu v. Akinremi (1989) 13 N.W.L.R. (Part 108) 164 at d 172. It was also contended for the appellant that the learned trial Judge fell into error with regard to the standard duty of care e of bankers which he held that is a question of law and not of facts (see Commissioners of Taxation v. English, Scottish and Australian Bank (1920) A.C. 683 at 689). The learned Counsel for the appellant therefore urged for f the various arguments set out and in his brief and the oral submissions before us that the learned trial Judge was wholly wrong to have found the appellant liable in negligence to the respondent. g In view of the manner in which the learned Senior Advo- cate for the respondent treated the issues canvassed, I think I should here deal with the argument of the Counsel on whether the learned trial Judge was right to have upheld the h claim upon the doctrine of “money had and received”. The view of the learned Counsel for the appellant is that having regard to the facts of this case the learned trial Judge was wrong to have applied the doctrine. He therefore has argued i that this is not a case of quasi-contract, but that of a definite and binding contract based on exhibits 10, 10(a), 10(b), 11(a) and 11(b) between the parties. That contract, it is argued, authorised the appellant to debit the respondent’s j account under certain circumstances. It was in compliance [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 300 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. with that contract that the appellant debited the respondent a with the sum of N163,606.68 and which is the cause of this action. In response to the above arguments canvassed for the ap- b pellant, the learned Senior Counsel for the respondents, Philip Umeadi, Esq., S.A.N. contends primarily that issues 1, 2, 3 and 4 set down by the appellant are not well founded in law. He is of the view that [those] I identified in the re- c spondent’s brief is a better formulation of the issues for determination in this appeal. As I do not consider it necessary to enter into any further argument over the formulation of issues in this appeal, it is sufficient to observe that the d main question raised in these issues is whether the appellant was properly found liable in negligence by the lower court. Be that as it may, the submission made for the respondent is that the transaction is governed by a standard application e form which usually incorporates the Uniform Customs and Practice for Documentary Credits 72 Revision (International Chambers of Commerce Brochure 290). For that view, he submits that the locus classicus on this type of contract in f our case law is Akinsanya v. U.B.A. (1986) 4 N.W.L.R. (Part 35) 273. He further submits that the kernel of this appeal is the second contract theory, ably adumbrated at 303 et seq,in Akinsanya’s case (supra). For him exhibits 10, 10(a), 10(b), g 11, 11(a) and 11(b) together is the fulcrum of this appeal. And it is the case for the respondent that the contract was for irrevocable letters of credit in favour of the named beneficiary of Norway “for USD430,500 and USD112,500 against h their drafts drawn on yourselves for l00% of the cost and freight” respectively. The respondent’s claim is therefore well founded on the equitable grounds of money had and received or alternatively negligence. On the liability of the appellant for negligence, learned Senior Advocate referred i to the address of learned Counsel for the appellant at the court below, where he submitted, inter alia, thus:– “It is admitted that the defendants owed the plaintiffs the duty to exercise care and forward the plaintiff’s application to the Central j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 301 a Bank of Nigeria without delay, they having been the defendant’s customers for some 30 years ago.” The learned Senior Advocate for the respondent then con- b tended that where, as in this case, the respondent’s documentary exhibits had expiry dates, and as the account was debited three years after the documentary exhibits were opened the appellant was obliged to comply strictly with the c terms of the said exhibits. For its failure so to do the appellant had no right to debit the respondent’s account three years after the expiry date stipulated on them. Arguing further on whether the appellant was rightly found liable for d negligence, it is contended for the respondent that it, the appellant, pleaded negligence in paragraphs 5, 6, 7, 9 and 10 of its statement of claim. And it is argued that paragraph 7 of its statement of claim was admitted in paragraphs 9 and 10 of the amended statement of defence. The negligence of the e appellant, it is contended, is made evident by the failure of the appellant to explain why the “provisional allocation” of foreign exchange was not utilised. It is argued for the respondent that the appellant could not take advantage of the f provisional allocation in respect of LC 847/81 because the appellant had not forwarded to the Central Bank all the requisite documents handed over to them by the respondents at the time they made their application to the appellant. This g is made evident by exhibit 4 and it is contended for the respondent that the learned trial Judge was right to impute negligence to the appellant. More so, having regard to the evidence of DW1, who not only gave contradictory evidence h with regard to the number of documents required to support “Form M” to procure foreign exchange from the Central Bank of Nigeria, but was also unable to explain why it became necessary to write exhibit 4 demanding from the re- i spondent a tax clearance certificate and the bill of lading for the LC 847/81. With regard to LC 864/81 and exhibits 16, 17, 18 and 19, the submission of the learned Senior Advocate is again j predicated upon Akinsanya’s case (supra). It is also his [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 302 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. contention that the terms in exhibits 10 and 11 must be a strictly complied with in law, pointing out that the terms stipulated in the said exhibits are to the effect that “credit to be available for negotiation or payment abroad until 15/4/82 b and 30/8/82 respectively”. And as the appellant did not bestir itself until 12th June, 1982 it was already in breach of the terms stipulated. That the delay in processing of exhibits 16, 17 and 18 was c due to the fact that the appellant filled in the word “food” instead of “stockfish”. Hence it is argued that the appellant was negligent in that regard and therefore responsible for the consequent delay in obtaining the approval of the Central d Bank of Nigeria and which led to the respondent being debited with a considerable amount of Naira to meet the foreign exchange component of LC 864/81. It is thus argued that the witness for the appellant, DW2, made this point clear in his e evidence under cross-examination when he said:– “The correct thing was done in exhibit 19 and foreign exchange was accordingly allocated thereof. The letter of credit was for importation of stockfish simpliciter . . . This anomaly have [sic] caused these delays.” f The learned Senior Advocate also argued that the contention of the appellant that the delay was caused by the late receipt of the cable claim from its overseas correspondent bank should be discountenanced. That contention of the appellant g has no basis as the document was not one of those required to effect the transaction for the foreign exchange sought for by the respondents. For this submission reference was made to the Uniform Customs Practice for Documentary Credits, h exhibits 10 and 11 and also to the evidence of DW2 by the appellant. And on the claim by the appellant that, by virtue of sections 7 and 8 of the Exchange Control Act, the Central Bank i of Nigeria has absolute power with respect to the allocation of foreign exchange, the contention of the respondent per its learned Senior Advocate is that the Central Bank does not have such absolutism. It is its view that the power of the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 303 a Central Bank is subject to rules in the exercise of its discre- tionary power with regard to the allocation of foreign exchange to its customers. And it is further argued for the b respondent that as our Exchange Control Act is modelled upon the English Exchange Control Act, the interpretation of the English Act is applicable to our own Exchange Control Act. Reference was therefore made to the case of Contract c and Trading Co (Southern) Ltd v. Barbey and others (1960) A.C. 244. Also called in aid of their submission that the appellant cannot cover its negligence under the skirt of the Central Bank, the oft repeated case of Akinsanya v. UBA d (supra). Finally on this issue, the learned Senior Advocate, P. Umeadi, Esq., has emphasised in the respondent’s brief that the respondent did not sue the Central Bank of Nigeria for its failure to allocate foreign exchange to them. They are e therefore not in the position of the plaintiff in Central Bank v. Mannexport SA (1987) 1 N.W.L.R. (Part 47) 86, who took such an action and lost. Their case against the appellant, simply put, is the failure of the appellant to energise the f Central Bank of Nigeria to exercise its discretion in accordance with the contract between appellant and the respondent. It is the crux of the respondent’s action. The main question that has to be resolved in this issue is g therefore whether the respondent was right in its contention that its claim in negligence against the appellant was properly upheld by the lower court. It would be recalled that the contention made for the appellant is that the respondent did h not by their pleadings and the evidence adduced at the trial prove negligence as held by the lower court. The submission of its learned Counsel, and which I have reviewed above, is that the learned trial Judge did not decide the case upon the pleadings. It is therefore necessary to refer to the relevant i pleadings of the parties. Thereafter the judgment of the lower court would be considered in the light of the pleadings and the submission of Counsel thereon. But before doing so, it is, I think common ground between the parties that the j respondents duly opened letters of credit No. 847/81 for [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 304 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

US$112,500 and US$430,500 on letter of credit LC 864/8l a for importation of stockfish with the appellant and full settlement on 28th January, 1982 on them. With regard to the pleadings of the respondent it is perti- b nent to refer to paragraphs 5, 6, 7, 9, 10 and 16 of its statement of claim. They read thus:– “5. The defendants negligently delayed submitting the exchange control documents for LC No. 864/81 to the Central c Bank for release of Foreign Exchange until 11th March, 1983. 6. The required exchange control documents were submitted by the defendants to the Central Bank in respect of LC d 864/81 after a duration of one year and the application was released late on 18th July, 1983 with allocation No. 17/4146. 7. The defendants submitted the exchange control documents on LC 847/81 to the Central Bank on 18/2/82 and it was e checked and accepted on 25/2/82 with allocation of Foreign Exchange No. 15/3/6115. The letter of Credit was released on 2/3/82. 9. The defendants did not utilize the allocations until the f Letter of Credit was affected by what the defendants termed ‘Refinancing Agreement’ which happened about 1984 with resultant upward climb of exchange rates and charges. Particulars of Negligence g 10(a) The defendants were unconcerned whether the payment on the Letters of Credit averred in paragraph 3 above was paid in time or not. (b) A period of over 12 months from the time the exchange control documents for Foreign Exchange was released is too h long. (c) By letter dated 21/9/83 the defendants wrote the plaintiff asking him to search his file and see whether ‘you can lay hands on one signed copy of Bill of Lading and forward i same to us to enable us meet with over Nifex Lagos Office requirements’. (d) The defendants on the premise of paragraph 10(c) hereinbefore misplaced the necessary documents particularly Tax Clearance Certificate already acknowledged by them. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 305 a (e) The exchange control document in respect of LC No. 864/81 which was submitted later on 19/5/82 was paid to the shippers without ‘Refinancing Agreement’ charges incurred on LC Nos. 847/81 and 864/81 bills of entry of b which were submitted earlier in time. 16. The plaintiff on the above premises claim against the defendants as follows:– (a) N163,606.98 being money had and received to the c use of the plaintiff or alternatively for negligence in acting late with regard to the exchange control documents not submitted to the Central Bank in time and non- utilization of the allocation by the defendant. d (b) 13% compound interest on N 104,295.30 from 27/10/84–20/1/87 33,207.50 (c) 13% compound interest on 59,311.68 from 27/2/84–20/1/87 25,648.50 e Grand total of claim N 163,606.98 Capital debit plus interest N 222,463.00 (d) 4% Interest on the judgment sum until paid.” For the appellant it would appear that it joined issues on f negligence with the respondents when in its amended statement of defence it pleaded in paragraphs 7, 8, 9, 11, 12, 13 and 16(a) thereof, thus:– “7. The defendant vehemently deny that they negligently de- g layed submitting the exchange control documents for LC No. 864/81 to the ‘Central Bank for release of Foreign Ex- change until 11th March, 1983’ as contained in paragraph 5 of statement of claim, or at all. Contrary to the allegations of the plaintiff therein contained, the defendant plead that h they submitted the said documents and applied to the Cen- tral Bank of Nigeria for allocation of foreign exchange in respect of LC No. 864/81 on 10th June, 1982 after they received the relevant ‘cable claim’ from their overseas corre- i spondent bank on 18th June, 1982. The defendant resubmitted the said application on 20th August, 1982 but it was again, rejected on 4th October, 1982. The same was further re-submitted to the Central Bank on 8th February, 1983, but was rejected by the Central Bank once more on j 11th February, 1983; this time with specific instruction to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 306 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

‘batch separately and mark stockfish’. Finally, the application a was resubmitted to the Central Bank on 10th March, l993, as instructed, and was rejected again on 11th March, 1983; but following a strong representation made by the defendant, the rejection was reversed and it was accepted on 3rd b June, 1983. The defendant plead and will at the trial found and rely on copies of the Cable Claim aforesaid, and on application schedules of documents for purchase of Foreign Exchange Reference No. SCR 82/4766 variously dated 10th c June, 1982, 20th August, 1982, 8th February, 1983 and 10th March, 1983, all containing the Central Bank stamps and remarks. 8. In further answer to paragraph 5 of the statement of claim the defendant aver that the plaintiff failed or neglected to d submit to the defendant the plaintiff’s 1982 Tax Clearance Certificate in time despite defendant’s several demands orally over the counter and by writing. The defendant will found on defendant’s letter to the plaintiff dated 19/11/82 e which letter the plaintiff is hereby given notice to produce at the trial. 9. In answer to paragraph 6 of the statement of claim, the defendant repeat paragraph 7 of this defence and further aver that the said application was released as aforesaid but f that the number referred to in the said paragraph of the statement of claim was Central Bank batch reference number of accepted applications relating to the letter of credit. Those numbers are commonly called ‘Provisional allocation g numbers’. 11. The defendant deny that the same Tax Clearance Certificate was used in opening LC No. 846/81 as well as LC No. 847/81 and LC No. 864/81 as contained in paragraph 8 of the statement of claim. In further answer thereto the defen- h dant plead that the plaintiff forwarded to the defendant the documents for LC No. 864/81 without a Tax Clearance Cer- tificate. The defendant admit that payment under the said LC No. 864/81 was made to plaintiff’s shippers without fur- i ther charge but they aver that the payment was made by the Central Bank of Nigeria with the said Central Bank’s approval and as they deemed fit at their discretion. 12. The defendant deny paragraph 9 of the statement of claim. Contrary to the allegation of the plaintiff, therein, the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 307 a defendant discharged their duties prudently in the transaction and submitted the documents to the Central Bank of Nigeria who alone have the legal competence to authorise, b approve, remit or transact foreign currency in and outside Nigeria. 13. The defendant deny paragraph 10(a) of the statement of claim and they hereby repeat paragraph 7 above. The defendant admits writing the letter referred to in paragraph c 10(c) of the statement of claim, but they deny the conclusion derived from it by the plaintiff as averred in paragraph 10(d) thereof. On the contrary, the said letter was written well after the said documents were submitted to the Central d Bank of Nigeria and the documents [asked] for in the said letter were for the administrative records only of the defendant at their foreign exchange department. 16. In further answer to paragraphs 11 and 12 of the statement e of claim the defendants plead that:– (a) The said LC No. 847/81 and LC No. 864/81 were among numerous credits, bills and claims which various banks duly submitted to the Central Bank on behalf of their f customers between 1981 and 1983 for approval and allocation of foreign currencies for payment of foreign debts. The Central Bank did not supply the requisite foreign currencies until the Military intervention of 31st December, 1983. The Federal Military Government g thereafter entered into agreement for re-scheduled payments of all those debts, including the plaintiff’s outstanding unpaid as at 30/12/83 in what was called ‘Refinancing Agreement’.” h The learned trial Judge, faced with the pleadings before him and the evidence led at the trial, then considered what he took as the main issue between the parties; that issue being whether there was culpable delay by the appellant in the i handling of LC 847/81 and LC 864/81 by the appellant. For that purpose the learned trial Judge used as his yardstick for measuring whether there was culpable delay or not in the handling of the said LCs by examining what happened to j LC 846/81. It is common ground between the parties that [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 308 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

LCs 847/81, LC/864/81 and LC 846/81, were submitted to a the appellant by the respondents in the following order:– (a) LC847/81...... 11/2/82; (b) LC864/81...... 2/3/82; b and (c) LC846/81...... 19/5/82. It is also common ground that LC 846/81, which was with- c out doubt submitted later than LC 847/81 and LC 864/81, yet LC 846/81 had its foreign exchange released and the respondent’s overseas suppliers were duly paid in the appropriate currency; before LC 847/81 and LC 864/81. Upon the d facts before him the learned trial Judge then resolved the issue by holding that the appellant was negligent on account of the delay it caused in the processing of LC 847/81 and LC 864/81. His reasons for so holding read thus:– e “There was ‘delay’ to the event of submitting correct applications to the Central Bank of Nigeria for LC 847/81 and LC 864/81; and payment was late in relation to timing of paying overseas suppliers of ‘stockfish’ under cover of LC 847/81 and LC 864/81. And the ‘delay’ and ‘lateness’ arose from the manner in which LC 847/81 f and LC 864/81 were handled, to wit:– (a) delaying of LC 847/81 due to loss/misplacement of Tax Clearance Certificate and Bill of Lading previously delivered to the defendants at appropriate time; g (b) tossing about LC 864/81 due to wrong and misleading information fed on exhibits 16, 17 and 18 and initially on exhibit 19 thus making it practically impossible for [the] Central Bank of Nigeria to have [an] accurate working basis upon which to act before [the] Foreign Exchange Rate crisis h of 1984.” Before arriving at this conclusion, the learned trial Judge duly considered whether the delay was due to the respondent’s failure to submit its tax clearance certificate and i exchange control documents/bill of lading. In this regard the learned trial Judge considered exhibit 4, the letter from the appellant, asking the respondent to forward these documents in respect of LC 847/81. The court also considered in this j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 309 a context the evidence of DW1, Mr Vitalis Ezirike. This witness admitted under cross-examination that he wrote the letter, exhibit 4, to the respondent demanding the respon- b dent’s tax clearance certificate in respect of LC 847/81 because there was a query from the appellant’s NIFEX office. Incidentally it is in evidence that NIFEX is the office of the appellant situated in Lagos where all applications for foreign c exchange made to the appellant are centrally processed. Before writing this letter, the witness also admitted under cross-examination, that the respondent opened three letters of credit, which included LC 847/81 and that for it and the two others the relevant tax clearance certificate for 1981 was d submitted with them by the respondent. Before this Court, the learned Counsel for the appellant has argued that the learned trial Judge was wrong to have ascribed negligence to the appellant by reason of exhibit 4, and he asks that this e Court should so hold. Also it is argued for the appellant that with regard to LC 847/81, the lower court was wrong to have inferred delay having regard to the failure of the appellant to communicate to the Central Bank the appropriate f description of the goods ordered by the respondent via the application submitted by the appellant for the respondents. In the view of the learned Counsel, the appellant ought to have been complimented for its effort rather than be casti- g gated for negligence by the learned trial Judge. For all the arguments urged upon us by the learned Coun- sel for the appellant, the desired result is that the findings of fact of the lower court and the conclusions reached thereon h be reversed. But for this objective to be achieved, it is settled that an appellate court should not disturb a finding of fact unless that court is satisfied that such finding is unsound. It is in the process of deciding whether the finding is sound or i not that the Court of Appeal is left only to examine the grounds that led to the conclusions reached by the court and the inference that has been drawn from such conclusions of the trial court (see Ebba v. Ogodo and another (1984) 1 j S.C.N.L.R. 372; (1984) 4 S.C. 84 at 98). [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 310 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

It must also be borne in mind that the court of appeal ordi- a narily attach the greatest weight to the opinion of the trial Judge that has the duty to see the witnesses and also hear the witnesses. Appellate courts do not and should not therefore b go into the issue in the exclusive preserve of the trial Judge who saw and heard the witnesses unless there is no evidence at all to support the finding (see Balogun v. Labiran (1988) 3 N.W.L.R. (Part 80) 66 at 84). c It is with the above principles in my mind that I have considered the argument of Counsel in deciding whether on this issue the contention made for the appellant be upheld. It seems clear upon a careful reading of the pleadings and the d evidence that the learned trial Judge rightly accepted the evidence of the respondent’s only witness. The evidence of this witness that he duly submitted to the appellant all the documents required of him to support this application for e foreign exchange was accepted by the learned trial Judge who believed him as a witness of truth. Moreover, this evidence was corroborated by DW1 who testified for the appellant. In my view also, the attempt to cloud the issue by f claiming that the delay was caused by the late receipt of the cable claim in respect of the letters of credit is a red herring. That excuse was therefore rightly rejected by the learned trial Judge and I agree also with the lower court that a cable g claim is not one of those documents stipulated to the respondent for the processing of foreign exchange. If such a document was required, it became the duty of the appellant to procure same expeditiously. It is also my opinion that the h contention made for the appellant that the use made of LC 846/81 in the determination of whether the appellant delayed unreasonably the processing of LC 847/81 and LC 864/81 lacks merit. As I have ready observed LC 846/81, LC 864/81 and LC 847/81 were all submitted by i the respondent to procure foreign exchange though at different times. This fact was duly pleaded and evidence given to the effect that, though LC 846/81 was the last of the series, it got processed first. While that event might have been j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 311 a fortuitous, it does not in my view diminish from the fact that the processing of the letters of credit were not done in seriatim by the appellant. I do not consider that the learned trial b Judge was wrong to have compared the time it took to process LC 846/81 with the period it took the appellant to process the letter of credit that formed the cause of action in this appeal. And that, it must be remembered, was not the only c reason that led the learned trial Judge to the conclusion that he reached. As I have earlier examined some of these other reasons, I do not need to dwell upon them here. I now turn to consider whether the delay should have been d attributed to the Central Bank of Nigeria which, it was argued for the appellant, has the absolute control over the allocation of foreign exchange. The premise for the submission is sections 7 and 8 of the Exchange Control Act, 1962. e The learned trial Judge did not agree with that submission as it was his opinion that by the said legislation the Central Bank has absolute powers in the disbursement and/or approval for foreign exchange. The respondent, having the f view held by the lower court, has urged that this Court should uphold the view of the lower court. The learned trial Judge said thus:– “It is my view that the aim of sections 7 and 8 of Exchange Con- trol Act, 1962 was to avoid confusion in handling remittances and g vesting power of control and regulation in the government functionaries therein mentioned. . . . In my opinion it meant that the functionaries of government con- h cerned are vested with power to approve remittances where legal requirements have been met and normal practices followed.” For the appellant, the case of Central Bank v. Manexport SA (1987) 1 N.W.L.R. (Part 47) 86 was cited in support of its i contention that the Central Bank has absolute power in the disbursement of foreign exchange. In that case the first respondent, as plaintiff, said that the appellant was obliged to provide the foreign exchange necessary for the transaction j between them and the second and third respondents and [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 312 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. claimed the amounts due as already approved for the appel- a lants under Form M. In upholding the contention of the appellant that it was not under any obligation to disburse foreign exchange to the first respondent as claimed, this b Court, per Nnaemeka-Agu JCA (as he then was) said:– “We were however not referred to any statute which makes it obligatory for the Central Bank of Nigeria to furnish foreign exchange to any person, corporate or incorporate, and I could find c none. For one to be able to decide whether or not the appellants become obliged to furnish the foreign exchange to the 1st and 2nd respondents by the mere fact that they had approved their form ‘M’ (exhibit B) it would be necessary to delve into the fiscal policies of the government with respect to foreign exchange.” d This decision is clearly to the effect that the Central Bank cannot be compelled to furnish foreign exchange to anyone, merely because that person has the appraisal of the Central Bank of Nigeria to that effect as there is no law or statute e compelling the Central Bank of Nigeria to so act. The learned Senior Advocate of Nigeria, Umeadi. Esq., in the respondent’s brief concedes that legal position; he, however, contends that the respondent’s case is not for compelling the f Central Bank of Nigeria to disburse foreign exchange to it. Its case is that the appellant delayed the processing of its application in respect of LC 864/81 and LC 847/81 to the Central Bank of Nigeria, which resulted in it being debited g the sum that is the subject of the claim before the court. For the respondent, therefore, the appellant having delayed action unreasonably on the processing of their applications to the Central Bank, was properly found liable in negligence. h And being negligent, the appellant ought not to be allowed to benefit from its own delict. This means that the appellant must bear the debit which it sought to recover from the respondent. For this submission, the respondent placed reliance on Akinsanya v. U.B.A. Ltd (supra) and also Contract i and Trading Co (Southern) Ltd v. Barbey and others (1960) A.C. 244. In Akinsanya’s case (supra), the Supreme Court had to consider the case where the appellant applied to transmit a sum of money expressed in dollars for the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 313 a purchase of cement from a company in Switzerland. To that end the relationship between the respondent and the appellant became governed by the form, exhibit B, supplied by b the respondent and which the appellant filed, in turn the respondent issued exhibit C to the paying or confirming bank, a Swiss bank. Eso JSC in the course of his judgment at 303 then made c the following observation regarding the relationship thereby created between the parties:– “The relationship is one of a banker and Customer. But not quite. In an ordinary banking transaction, a customer requiring a loan or d overdraft facility enters into a simple informal contract known to the common law or, if a statutory provision is involved in the contract known to statute. In an application for a documentary credit under discussion, there is a standard form of application. The form usually incorporates the Uniform Customs and the Buyer is re- e quired to fill the document where the terms of the contract are set out in detail in the instant appeal, such application is exhibit B. Exhibit B is the form provided by the Issuing bank, the respondents in this case, and though the Uniform Customs are not speci- f fied in exhibit B. Exhibit C which the respondent issued to the paying or confirming bank, that is the Swiss Bank the following is contained. ‘Except as otherwise stated this credit is subject to the Uniform Customs and Practice for Documentary Credits g (1974) Revision International Chamber of Commerce Bro- chure No. 290.’ It is to be noted however, that non-incorporation of this Uniform Customs in exhibit B is certainly not an issue in this case. The Is- h suing bank (respondent in this case) has a duty to ensure that the letter of credit issued to the seller in this case ASDECAMO com- plies strictly with the instructions of the Buyer (in this case, the appellant) contained in the application for the credit and also that the credit is to the effect that payment, acceptance or negotiation is i affected only on presentation of documents which fully accord with the terms of the credit.” But in the instant case it is common ground that the transactions between the parties, having regard to exhibits 10, 10(a) j and (b) and 11, 11(a) and (b), were stated on the said [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 314 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. exhibits to be “Subject to Uniform Customs and Practice for a Documentary Credits (1974 Revision), Brochure 290”. It is therefore argued for the appellant that by virtue of the terms and conditions stipulated therein and the exhibits them- b selves, the appellant is absolved from any liability in respect of the claim arising from the change in the exchange rate that governed the transactions. The contention of the appellant culled from page 37 of the appellant’s brief are that the c said exhibits exempted it from liability for the very acts complained of and for claims of the respondent viz:– (i) indemnity against exchange risks; (ii) the method and timing of relative cover transaction d with the Central Bank to be at appellant’s discretion; (iii) to pay the value of the goods plus interest and charges as determined when exporters actually re- e ceived payment; (iv) the respondent authorised appellant to debit its account with any additional payment; (v) and the respondent excluded appellant for acts of f negligence. The above argument for the appellant was rejected by the lower court. That court further went on to hold that the pro- g visions of exhibits 10, 10(a), 10(b) and 11, 11(a), 11(b) were not clear or comprehensive enough to entitle the appellant exemptions therefrom. That decision, it is argued, was erroneous as those exhibits represent the cause of action between h the parties and they are to be relied upon to determine the liability of the parties. For that submission, Narumal and Sons Ltd v. N.B.T.C. Ltd (1989) 2 N.W.L.R. (Part 106) 730 at 752–753 and Photo Production Ltd v. Securitor Transport Ltd (1980) 1 All E.R. 536 at 564 were cited in the appel- i lant’s brief. And on the liability of the respondent for the payment of exchange rate arising from the Refinancing Agreement, the case of S.A. Iredia v. First Bank of Nigeria Ltd Suit No. B/67/84 delivered on 29th June, 1988 in the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 315 a High Court of the then Bendel State was similarly brought to our attention. The response to the above submission of the appellant by b the respondent is that the appellant cannot on the basis of its culpable negligence shield itself from liability by placing reliance upon the terms and conditions in exhibits 10, 10(a), 10(b) and 11, 11(a) and 11(b). In support of that contention c reliance was placed on the decision in Akinsanya v. U.B.A. (supra). Before examining whether the terms and conditions embodied in exhibits 10, 10(a) and 10(b) and 11, 11(a) and 11(b) exclude the appellant from negligence, I think it is d only right to consider first whether there was in fact a contract between the parties. Then, if there was a contract, whether there was a breach of contract. It is, I think not in dispute that having regard to the princi- e ples enunciated in Akinsanya v. U.B.A. (supra) a contract was established between the parties. The basis of the contract was the documentary exhibits 10, 10(a) and 10(b) and 11, 11(a) and 11(b). It is my view that the contracts fell f within the second contract enunciated by Eso JSC in Akin- sanya v. U.B.A. (supra), where at 303 His Lordship said that the second contract is between the buyer and the issuing bank. The facts here show that the appellant as the issuing bank opened the letters of credit for the respondent, the g respondent having instructed the appellant to that effect. And also the respondents having earlier established the first contract with the sellers of stockfish in Europe. It is also an established fact that it was the instruction given that formed h the basis for the issuance of the letters of credit. In Obmiami Brick and Stone (Nig.) Ltd v. A.C.B. Ltd (1992) 3 N.W.L.R. (Part 229) 260 the Supreme Court, upon facts which are not dissimilar to those in the instant appeal held that there was i an established contract between the buyer and issuing bank, even though in that case it would appear that the relevant letters of credit were not in evidence. I will now consider whether negligence was established j upon the facts and pleadings before the trial court. But [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 316 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. before doing so, I deem it desirable to refer to the principles a that ought to guide a court in determining whether the appellant breached the duty of reasonable care – the foundation of a claim in negligence. It is, however, pertinent to state im- b mediately that the doctrine of res ipsa loquitur which literally means “the thing speaks for itself” appears to be more appropriate in accident cases, and do not seem applicable to a case of this kind (see Okeke v. Obidife (1965) 1 All N.L.R. c 50 at 54; Bolton and others v. Stone (1951) A.C. 850 at 859; Management Enterprises Ltd and another v. Otusanya (1987) 2 N.W.L.R. (Part 55) 179; Linus Onwuka and another v. R.I. Omogui (1992) 3 N.W.L.R. (Part 230) 393). d The learned trial Judge was therefore wrong to have adverted to this doctrine when considering whether the appellant was liable in negligence or not. I will later in this judgment decide whether a miscarriage of justice was occasioned thereby. e For the principles that should guide a court in the determination of whether negligence in a case of this kind, may I refer to the pronouncement of the learned authors of f Charlesworth and Percy on Negligence paragraph 9.05. It reads:– “In the majority of cases, which concern the relationship between professional or other skilled person and his client, patient or customer, there exist a contract between them. Where such an agree- g ment exists the cause of action is primarily based on breach of contract. Generally, in the absence of any express terms there is one implied that the professional or the skilled person will exercise reasonable care and skill in rendering his services in respect of h which the client, patient or customer will pay either a reasonable fee or whatever precise fee has been agreed. Indeed in Midland Bank Trust Co Ltd v. Hett Stubbs and Kemp . . . Oliver, J. said: ‘The classical formulation of the claim in this sort of case as damages, negligence and breach of professional duty tends to be a i mesmeric phrase. It concentrates attention on the implied obligation to devote to the client’s business that reasonable care and skill to be expected from a normally competent and careful practitioner as if that obligation were not only a compendious, but also an ex- haustive definition of all the duties assumed under the contract j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 317 a created by the retainer and its acceptance. But of course, it is not. A contract gives rise to a complex of rights and duties of which the duty to exercise reasonable care and skill is but one.’” b May I add that it is the recognition of this principle, i.e. the duty to exercise reasonable care and skill by a person who undertook to perform services upon a contract for another, that led to the development in the case of Hedley Byrne & Co Ltd v Heller & Partners Ltd (1964) A.C. 465 of the doc- c trine of liability in negligence against those who offer skilled or professional services (see also Mutual Life and Citizens’ Assurance Co Ltd v. Evatt (1971) A.C. 793–806). May I add also that it is a new development in our jurisprudence for d persons aggrieved to claim in negligence against banking houses and other persons offering skilled professional services to their customers or clients. This development is inevitable and the sagacious observation of Lord Diplock e delivering the majority judgment in Mutual Life and Citi- zens’ Assurance Co Ltd v. Evatt (supra) at 809:– “As with any other important case in the development of the common law Hedley Byrne should not be regarded as intended to lay f down the metes and bounds of the new field of negligence of which the gate is now opened. Those will fall to be ascertained step by step as the facts of particular cases which come before the courts make it necessary to determine them. The instant appeal is an example; but their Lordships would emphasise that the missing g characteristic of the relationship which they consider to be essential to give rise to a duty of care in a situation of the kind in which Mr Evatt and the company found themselves when he sought their advice is not necessarily essential in other situations – such as perhaps, where the adviser has a financial interest in the transaction h upon which he gives his advice (cf W.B. Anderson and Sons Ltd v. Rhodes (Liverpool) Ltd (1967) 2 All E.R. 850; American Restate- ment Office Law of Torts, 3rd Tentative Redraft). On this, as any other metes and bounds of the doctrine of Hedley Byrne their Lordships are expressing no opinion. The categories of negligence i are never closed and their Lordships opinion in the instant appeal, like all judicial reasoning, must be understood secundum subjec- tam materiam.” It seems to me also that our Supreme Court in the case of j Obmiami Brick and Stones Ltd v. A.C.B. Ltd (supra)in [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 318 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. awarding damages against the respondent in that case impli- a edly recognised this doctrine. And therefore it came to the conclusion that as the bank was in breach of its duty of care to its client/customer, Obmiami Brick and Stone Ltd, it was b thereby liable in negligence. Hence the award in damages was made in favour of Obmiami Brick and Stone Ltd. It is upon this principle that I hold the view that, in the instant case, the appellant upon the basis of the contracts that came c into existence between them, viz exhibits 10, 10(a) and 10(b) and 11, 11(a) and 11(b), could be held liable in negligence if it was established upon the pleadings that it acted in breach of its duty of care to the respondents. d In order to determine whether the appellant was in breach of its duty of care to the respondent, I will have to examine separately the pleadings and evidence relevant to each of the letters of credit. With regard to LC 847/81, the respondent e per paragraph 7 of its statement of claim alleged that the appellant submitted the exchange control documents to the Central Bank on 18th February, 1982 and it was checked and accepted on 25th February, 1982 and was allocated foreign exchange No. 15/3/6115. The letter of credit was f released on 2nd March, 1982. The appellant by its pleading in paragraph 10 of its amended statement of defence, but pleaded also by its paragraph 9, pleaded that the number referred to in the said paragraph of the statement of claim g was Central Bank batch reference number of accepted applications. On the basis of these pleadings the issue clearly is whether the appellant duly delivered LC 847/81 to the Cen- tral Bank. On those pleadings the respondent’s only witness h gave evidence at the trial and under cross-examination admitted that there was no delay in forwarding the application to the Central Bank. His evidence reads thus:– “Letter of Credit No. 847/81 is one of the two letters of credits i involved in this action. It is true that I submitted my Bill of Entry regarding this letter of credit on 11/2/82; and that the defendant submitted it to the Central Bank of Nigeria on 18/2/82 according to information I gathered; and I do not consider the 7 days a delay.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 319 a And further, still under cross-examination, the witness said:– “It is true that Central Bank of Nigeria provided foreign exchange for payment to my overseas sellers; and the CBN did not effect the b payment to my overseas sellers because the defendant bank neglected to pay over to the Central Bank the naira equivalent which I had earlier paid to the bank. My complaint about this particular LC No. 847/81 is not based on delay in transmitting documents to the CBN but delay in transmitting to the CBN, the Naira equiva- c lent which I had paid the bank earlier for foreign exchange.” The learned trial Judge, it is argued, ought to have refused this evidence as it was not pleaded. And it is further argued for the appellant that the evidence must have influenced the d learned trial Judge in arriving at this conclusion that the appellant was liable in negligence. The respondent contends to the contrary, and depends on paragraphs 10(b) and 10(c) of its statement of claim. In paragraph 10(b) it was pleaded e that a period of over 12 months was too long from the time the exchange control documents for foreign exchange was released and in 10(c) it was pleaded that by a letter dated 21st September, 1983 the appellant wrote the respondents f asking them to forward a signed copy of the bill of lading to the appellant. Exhibit 4 is this letter, in which the respondents were also asked to forward their tax clearance certificate. All these documents were said to have been forwarded g to the appellant when the letter of credit, LC 847/81, was opened. However, the appellant joined issue with the respondent by its pleading in paragraph 13 of its amended statement of defence. By this pleading, the appellant denied h paragraphs 10(a) and 10(b) of the statement of claim. And went on to say: “On the contrary, the said letter was written well after the said documents were submitted in the Central Bank of Nigeria, and the documents called for in the said i letter were for the administrative records only of the defendant at their foreign exchange department.” With regard to the pleadings it is of course settled that parties are bound by their pleadings. And evidence led which j are not pleaded go to no issue (see Obmiami Brick and Stone [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 320 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(Nig.) Ltd v. A.C.B. Ltd (1992) 3 N.W.L.R. (Part 229) 260; a Nwobodo v. Onoh (1984) 1 S.C.N.L.R. 1). The other point in the principle of pleadings which must be considered always in a civil trial is that the burden lies on b whoever asserts. Generally and in most cases the onus of proof lies on the plaintiff. But sometimes depending on how issues are joined in the pleadings, it may well be the defendant who has the onus of proof. In Onobruchere v. Ezegine c (1986) 1 N.W.L.R. (Part 19) 799 Oputa JSC put the principle thus at 806:– “An onus of proof does not exist in vacuo. The onus or burden of proof is merely an onus to prove or establish an issue. There can- d not be any burden of proof where there are no issues in dispute between the parties. For example if the plaintiff’s claim is admitted, that will be the end of the story. Similarly if a particular averment of the plaintiff is admitted, there will no longer be an onus to prove what has been e admitted by the opposite party. Therefore to discover where the onus lies, in any given case, the court has to look critically at the pleadings.” In the instant appeal, it seems clear from the pleadings that f with regard to LC 847/81 the appellant by its pleadings joined issue with the respondent on exhibit 4. In that exhibit 4 dated 21st September, 1983 the appellant wrote thus to the managing director:– g “B.U. Umeh and Sons, P.O. Box 898, Onitsha. Dear Sir, h Our LC No. 847/81 On receipt of this letter, please send us your Current Tax Clear- ance Certificate. In addition, kindly search your file and see whether you can lay hands on one signed copy of Bill of Lading and forward same to i us to enable us meet with our Nifex, Lagos Office requirements. Yours faithfully, (Sgd) For Manager.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 321 a And by its pleadings the appellant pleaded that the documents sought for in exhibit 4 was for its own administrative purposes. Obviously while this pleading may be variously b interpreted, it is clearly a defence which the respondent has to meet. If it was felt that exhibit 4 was not required for administrative purposes as pleaded, then a reply ought to have been pleaded to establish this point. And if it was also c considered that the delay complained of was caused thereby then it should be so pleaded. And, more importantly, the respondent’s only witness had admitted in the course of his evidence that he did not consider that the appellant delayed d the transmission of the said letter of credit, LC 847/81, to the Central Bank. That was the case presented by the respondent. It is also evident from its pleadings that it did not plead that having obtained the approval of the Central Bank, the e appellant failed to forward the Naira equivalent of the foreign exchange approved to the Central Bank. Therefore, I hold that the evidence given by the respondent to that effect goes to no issue and should have been rejected by the f learned trial Judge. And from what I have said about the pleadings, it is, in my view, also wrong for the learned trial Judge to attribute the delay in the processing LC 847/81 on the ground that the appellant had lost the respondent’s tax g clearance certificate and bill of lading (see Ajayi v. Texaco Nig. Ltd (1987) 3 N.W.L.R. (Part 62) 577 at 593; George and others v. Dominion Flour Mills Ltd (1963) 1 S.C.N.L.R. 117; (1963) 1 All N.L.R. 71 at 77; Ehimare v. Emhonyon h (1985) 1 N.W.L.R. (Part 2) 177 at 184). This is because on the admission of the respondent the appellant had already processed and forwarded LC 847/81 to the Central Bank since 18th February, 1982. The respondent’s witness gave evidence thus:– i “Letter of Credit No. 847/81 is one of the two letters of credit involved in this action. It is true that I submitted my Bill of Entry regarding this Letters of Credit on 11/2/82 and that defendant submitted it to the CBN on 18/2/82 according to information gathered j and I do not consider the 7 days a delay.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 322 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

That evidence to my mind is conclusive against the respon- a dent with regard to LC 847/81, and I uphold the submission of learned Counsel for the appellant that the learned trial Judge was wrong to have held the appellant negligent with b regard to LC 847/81. I now turn to consider whether the appellant was properly found liable by the lower court in respect of LC 864/81. I have earlier in this judgment referred to the pleadings and c they will not be repeated here. The crux of the case made by the respondent against the appellant is that by its negligence the respondent was debited with a sum of money which it would otherwise have not been liable for. The essence of the d delay was that in submitting the respondent’s letter of credit, LC 864/81, the appellant’s negligence delayed the application for a very long time. The appellant by its pleadings, to wit, paragraph 7 of its amended statement of defence sought e to explain the delay and pleaded that it was not liable in negligence. This contention, according to appellant, is borne out by exhibits 16, 17, 18 and 19. It is clear from the said exhibits that the application, exhibit 16, was first submitted f in June, 1982, and must have been rejected by August, 1982. By 20th August, 1982, exhibit 17 was next forwarded to the Central Bank and like the previous one the application read “Food”, and it was also rejected about October, 1982. The g next application, exhibit 18, was also forwarded, and as in the previous ones it bore the word “food”. It was similarly rejected. After exhibit 18 was rejected, exhibit 19 was prepared, and it does appear that, though dated 10th March, h 1983, it got into the Central Bank sometime in May, 1983. and was apparently accepted by 3rd June, 1983 as can be gathered from the document, exhibit 19. It is also evident from the same document that the appellant received it between 18th July and 12th August, 1983. Now, the learned i trial Judge having considered the evidence before him with regard to these documents came to the conclusion that on the evidence the appellant was liable in negligence with regard to the manner in which the processing of LC 864/81 was j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 323 a handled. Particularly where the appellant was not able to explain why it consistently for a period of over a year have filled the word “food” in the rejected applications until the b application was correctly filled by inserting thereon “stockfish” to denote the particular product for which the respondent had sought the foreign exchange from the Central Bank. The learned trial Judge on this point accepted the c evidence of the respondent that its instruction was for the payment for the purchase of stockfish from its overseas suppliers. There was also evidence before the learned trial Judge that the respondent had been the customer of the appellant for over 20 years and had always placed its orders for d the payment of stockfish ordered from its overseas suppliers through the appellant. In 1981 alone evidence was given which was not denied that the respondent placed with the appellants ten letters of credit for the purchase of stockfish e from its overseas sellers. It is therefore my humble view that the learned trial Judge was right to find the appellant liable in negligence with regard to the processing of LC 864/81 for the purpose of f receiving approval of the Central Bank for the purchase of the requisite foreign exchange to pay for the stockfish bought from the respondent’s overseas sellers. g The next question that I will now consider is whether the lower court was right to have awarded damages against the appellant. The appellant has in my opinion launched a two- pronged attack against this award. The first is that the appellant ought not to have been damnified in damages by virtue h of the exemption clauses incorporated in the letters of credit which in respect of LC 864/81 (exhibits 10, 10(a) and 10(b)). It is therefore argued for the appellant that in and by virtue of the said clauses, appellant is exempted from all i liability. It is no doubt right, and as I have held earlier, that the parties are agreed thereto that the contract between the parties is evidenced by exhibits 10, 10(a) and 10(b). It is therefore argued by learned Counsel for the appellant that all j the incidents arising from this transaction would have to be [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 324 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. considered or deductible from this contract. He further con- a tended that the doctrine of fundamental breach is not applicable in a case such as this and cites Narumal and Son Ltd v. N.B.T.C. Ltd (supra). But for the respondent, its learned b Counsel submits that the exemption clauses cannot be available to the appellant in the circumstances of this case. This, it is argued, is because the appellant failed to comply strictly with the instruction of the respondent. For this submission, c we were referred to Akinsanya v. UBA (supra) where it was held that the issuing bank, i.e. the appellant in this case, has that burden. And where it failed in that regard and caused delay to the buyer, i.e. the respondent, the appellant could d not be protected by the exemption clauses. In discussing the contending principles covering indemnity clauses in a contract, Eso JSC in Akinsanya v. U.B.A. (supra) put the contending arguments thus at 313–314:– e “The question posed by Professor Kasunmu was whether the respondent could rely upon this clause, if it is established that they are negligent? In Photo Production v. Securicor Transport Ltd (1980) A.C. 827 it has been held that in so far as an exclusion clause is concerned, all that has to be done is now construction of f the clause, that is, following the Interpretation Theory, as against the Rule of Law Theory, which was developed as far back as 1956 (see Spurling Ltd v. Bradshaw (1956) 1 W.L.R. 461 at 465, Yeo- man Credit Ltd v. Apps (1952) 2 Q.B. 508; Chitty On Contracts 25 Edition, Volume 1, page 472 at paragraph 884 put the Rule of Law g Theory as follows:– ‘The rule was predicated that there were certain breaches of contract (fundamental breaches) which were so totally destructive of the obligations of the party in default that liabil- h ity for such a breach could in no circumstances be excluded or restricted by means of an exemption clause.’ However in Finance Ltd v. National Mortgage Bank of Greece (1964) 1 Lloyds Rep. 446, Peason, LJ referred to an exemption i clause as a rule of construction see also Glynn v. Margetson and Co (1893) A.C. 351 and the 1967 case of Suisse Atlantique Societe D’Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale (1967) A.C. 361. However, the rule of construction theory was finally confirmed by the House of Lords in Photo Production Ltd j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 325 a v. Securicor (supra). In the Suisse Atlantique case (supra) I think the pronouncement of Lord Wilberforce is important. He said:– ‘One may safely say that the parties cannot in a contract, b have contemplated that the clause should have so wide an ambit as in effect to one’s party’s stipulations of all contractual force to do so would reduce the contract to a mere declaration of interest.’” c His Lordship Eso JSC then applied the construction theory to that case before the Supreme Court, when he said:– “In construing the instant contract it seems to me that the parties intended, by the clause aforesaid in exhibit B, to relieve the re- d spondent of liability once the respondents see that the documents purport to be in order, and or where the error or delay in transmission of the Swiss Bank’s messages or misinterpretation thereof arise from any cause beyond the respondents or their agent’s (the Swiss Bank’s) control.” e It therefore follows that upon the principle in Akinsanya v. U.B.A. (supra) and stated above it is the construction theory that must be applied in the instant case to determine whether f any of the exemption clauses or the totality of them afford total indemnity to the appellant. For that purpose I need to refer to exhibits 10, 10(a) and 10(b), and of the exemption clauses in these documents, I think the clauses quote here- g under is pertinent. It reads:– “I/We, hereby undertake to accept responsibility for all exchange risks incurred in connection with above collection and it is understood that the collection will not be considered paid until remit- h tance of the proceeds has been made by you to the drawer in the currency drawn. The release to me/us of any of the documents relating to the collection and or payment to you by yourselves of any sum of Nigerian currency shall in no way limit my/our aforementioned undertaking and I/we hereby authorise you to debit my/our i account with any amount due as a result of any exchange variation between the payment of any sum in Nigerian Currency and the foreign currency cancelled, the method and timing of the relative cover transactions being entirely at your discretion. If no account is maintained in my/our name(s) in your books, I/We undertake to j reimburse you for any claim of the above nature made. I/We [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 326 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

undertake to present to you all necessary exchange control docu- a ments as soon as the goods are cleared” (italics mine). Upon a careful reading of this clause it seems to me that the parties have agreed by this clause that the respondents b plainly undertook to accept responsibility for all exchange risks incurred with the above collection. And by the said exemption clause, the respondents clearly authorised the appellant to debit their account with any amount due as a c result of any exchange variation between the payment of any sum in Nigerian currency and the foreign currency cancelled. I have noted and indeed held that the appellant by its neg- d ligence delayed the processing of LC 864/81, but in the face of the abovementioned clause, the question is whether the respondent can avoid liability by reason of this delay. I have, after considerable thought and anxiety in this matter, con- e cluded that upon the plain construction of this clause that the respondent cannot. The respondent accepted responsibility to bear all exchange risks in respect of the transaction and it also authorised the appellant to debit its account to the ex- f tent of any such variation. As if that was not enough the respondent also agreed with the appellant and left entirely at its discretion the method and timing of the relative cover in respect of the transaction. g I am afraid that the conclusion I must inevitably reach is that the respondent has held themselves bound by this contract to indemnify the appellant from risks arising from this transaction. It seems to me proper that there is absolute h necessity for a party entering into contracts of this kind to ensure as much as possible that the terms of the contract afford some measure of protection for the party. But this kind of contract being in reality unilateral contracts are almost impossible to negotiate when the party seeking the i facility is anxious to obtain it, or was not wary or aware of the wide base for cover being given to parties, like the appellant, against negligence and other defects that may affect adversely the interest of the other contracting party. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 327 a From the conclusion I have reached above, I do not now need to decide on the contention of the appellant that the Refinancing Agreement was not within the reasonable con- b templation of the parties at the time exhibits 10, 10(a) and 10(b) were executed between the parties. And that the learned trial Judge was in error to have considered it in the course of determining the damages awarded to the respondent. Nor do I need to decide on whether the refinancing c agreement allegedly reached between Nigeria and other European countries was properly pleaded and established as an agreement that ought to affect the interest of ordinary Nigerians who, it is argued for the respondent, were not d made thereby parties to the said Refinancing Agreement. It follows that I must hold from all I have said above that the learned trial Judge was wrong to have found the appellant liable in damages in respect of the respondent’s claim in e this suit. In the result the appeal is allowed in its entirety. The judgment and orders of the lower court are hereby set aside. The appellant is entitled to costs in the lower court assessed in the sum of N3,000 and in this Court, the sum of f N5,000. TOBI JCA: It is an elementary principle of law that where parties are ad idem on the terms of a contract, the function of g the court is to give effect to the terms without much ado. This is because the court must, in the construction of the terms of a contract, give effect to the intention of the parties (see Niger Dams Authority v. Lajide (1973) 5 S.C. 207; Mobil v. Johnson (1961) 1 S.C.N.L.R. 157; (1961) 1 All h N.L.R. 93). However, where a contract is reduced into writing and the court is faced with the construction of a document, the question is not what the parties to the document may have intended to do by entering into that document but i what the meaning of the words used in the document is (see Oduye v. Nigeria Airways Limited (1987) 2 N.W.L.R. (Part 55) 126). In such a situation, it is only where the language of the document is not clear or is ambiguous that the court will j give effect to the intention of the parties. After all, it is not [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Tobi JCA 328 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the function of a court of law either to make contracts for a parties or to change their contracts as made (see African Reinsurance Corporation v. Fantaye (1986) 1 N.W.L.R. (Part 14) 113). b An exemption clause in a contract confers an immunity on a party from certain legal obligations. The items of exemption may be specifically mentioned or enumerated in the contract. The contract may merely contain general exemp- c tion clause or clauses in the event of breach or default. In either way, a court of law is bound to give that to the provisions. An exemption clause is a very sensitive part of a contract which must be strictly construed in favour of the party d relying on it. It is an established principle of law that words of exemption in a contract should not in anyway be construed to import liability but should be construed to extend immunity. This is because the maxim expressio unius exclu- e sio alterius or its converse exclusio unius inclusio alterius does not apply to such a case. Parties who have freely traded in exemption clauses in a contract must be bound by them, come rain, come sunshine. f In the instant case, the appellant inter alia pitched its defence on exemption clauses in exhibits 10, 10(a), 10(b), 11, 11(a) and 11(b). The learned trial Judge held that the provisions of the exhibits were not clear or comprehensive g enough to entitle the appellant exemptions therefrom. Is the learned trial Judge correct in his conclusion? I think not. There is enough in the exhibits to justify the argument of learned Counsel for the appellant. h In Narumal and Sons Nigeria Ltd v. Niger Benue Trans- port Co Ltd (1989) 2 N.W.L.R. (Part 106) 730, relied upon by learned Counsel for the appellant, Nnamani JSC cited with approval the English case of Photo Production Ltd v. i Securicor Transport Ltd (1980) 1 All E.R. 556, where the House of Lords held that:– “. . . the doctrine of fundamental breach by virtue of which the termination of a contract brought it, and with it, any exclusion j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Tobi JCA Union Bank of Nigeria Ltd v. B.U. Umeh and Sons Ltd 329 a clause to an end was not good law; that the question whether and to what extent an exclusion clause was to be applied to any breach of contract was a matter of construction of the contract and normally when the parties were bargaining on equal terms they should b be free to apportion the risks as the thought fit making provision for their respective risks according to the terms they chose.” My learned brother, Ejiwunmi JCA, has very comprehensively dealt with the issues involved in this appeal. I agree c with him. I thought I should add the above bit, being the crux of the entire case. I also award the same costs as in the leading judgment. ACHIKE JCA: I have had the preview of the judgment just d delivered by my learned brother, Ejiwunmi JCA, and I agree with the reasoning and conclusions therein. I also abide by the order as to costs. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

330 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a A.I. Egbunike and another v. African Continental Bank Limited b SUPREME COURT OF NIGERIA ADIO, BELGORE, IGUH, KUTIGI, OGUNDARE JJSC Date of Judgment: 3 FEBRUARY 1995 Suit No.: SC.253/1989

Banking – Bills of exchange – Non-presentation of – Effect c Banking – Bills of exchange – The proper interpretation of section 41(3)(b) of the Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990 – How notice of dishon- d our can be dispensed with under section 50(2)(c)(i) of the Act

Facts e The appellants were current account customers of the Abakaliki branch of the bank. Sometime in 1978, the appellants paid into their account in the bank two cheques made by them in favour of themselves and drawn on the Co- f operative Bank of Eastern Nigeria. Before the two cheques were cleared the first appellant requested for a withdrawal of some funds from the amount for which the aforesaid cheques were issued. He was allowed to do so and, in fact g did so with the approval or consent of one Mr Egbunike, the bank manager who happened to be a brother of the first appellant. The aforesaid manager of the bank caused the account of the appellants in the bank to be credited with the h amount with which the said cheques were issued and immediately allowed the appellants to withdraw from the account. In spite of the withdrawal, the cheques credited into the accounts of the appellants were never presented for clearing or payment by the then manager of the respondent. The i cheques have since disappeared and nobody knows where. The respondent claimed against the appellants the balance of the overdraft and interest thereon. The appellants rested their case on the respondent’s case and did not call any witness to j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

A.I. Egbunike and another v. African Continental Bank Ltd 331 a testify for them. The learned trial Judge dismissed the respondent’s claim, the appellants dissatisfied appealed, the Court of Appeal set aside the judgment of the lower court b and entered judgment for the respondent. Dissatisfied, with the judgment of the Court of Appeal, the appellant appealed to the Supreme Court. Held – c 1. Section 41(3) of the Bills of Exchange Act excuses presentment of a bill of exchange for acceptance and such bill may be treated as dishonoured by non-acceptance, d where, after the exercise of reasonable diligence, such presentment cannot be effected. 2. Presentment for payment is also dispensed with under section 46(2)(a) of the Act where, after the exercise of e reasonable diligence, presentment for payment cannot be effected. 3. A notice of dishonour is dispensed with under section 50(2)(c)(i) of the Act, as regards the drawer, where (as in f this case) the drawer and drawees are the same persons. Appeal dismissed.

Cases referred to in the judgment g Nigerian Adegbite v. Ogunfaolu (1990) 4 N.W.L.R. (Part 146) 578 Adejumo v. Ayantegbe (1989) 3 N.W.L.R. (Part 110) 417 h Ayoola v. Adebayo (1969) 1 All N.L.R. 159 Buraimoh v. Bamgbose (1989) 3 N.W.L.R. (Part 109) 352 F.C.D.A v. Naibi (1990) 3 N.W.L.R. (Part 138) 270 H.M.S. Ltd v. First Bank i (1991) 1 N.W.L.R. (Part 167) 290 Ike v. Ugboala (1993) 6 N.W.L.R. (Part 301) 539 Lewis and Peat Ltd v. Akhimien (1976) 1 All N.L.R. (Part 1) 460 j Mogaji v. Odofin (1978) 4 S.C. 91 [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

332 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Nigerian Maritime Services Ltd v. Afolabi (1978) 2 S.C. 79 a Obmiami Brick and Stone (Nig.) Ltd v. A.C.B. Ltd (1992) 3 N.W.L.R. (Part 229) 260 b Ohiaeri v. Akabeze (1992) 2 N.W.L.R. (Part 220) 1 Okparaoke v. Egbunonu (1941) 7 WA.C.A 53 at 54 Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723 c Olubode v. Salami (1985) 2 N.W.L.R. (Part 7) 282 Osafile v. Odi (No. 1) (1990) 3 N.W.L.R. (Part 137) 130 Uredi v. Dada (1988) 1 N.W.L.R. (Part 69) 237 d Nigerian statute referred to in the judgment Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990 sections 41(3), 45(1), 46(2)(a) and 50(2)(c)(i) e Counsel For the appellants: Williams S.A.N. (with him Igwe and Williams.) f For the respondent: Nwokoye

Judgment ADIO JSC: (Delivering the lead judgment) The respondent’s g claim against the appellants, jointly and severally, in the High Court of Justice, Anambra State of Nigeria was, as stated in paragraph 18 of the amended statement of claim, as follows:– h “(i) the sum of N800,312.28 (Eight Hundred Thousand, Three Hundred and Twelve Naira, Twenty-eight Kobo) balance of overdraft with compound interest at the rate of 10% per annum as at close of business on the 26th November, 1979. (ii) compound interest at the rate of 10% per annum with i monthly rests until the debt is fully repaid or judgment is obtained counting from 27th November, 1979.” Pleadings were duly filed and exchanged. The respondent filed a statement of claim which was amended with the leave j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 333 a of the court. The appellants filed a statement of defence which was also amended with the leave of the court. The evidence led by the respondent, a banker, was that the b appellants were current account customers of the Abakaliki branch of the bank. Sometime in 1978, the appellants paid into their account at the bank two cheques made by them in favour of themselves and drawn on the Co-operative Bank c of Eastern Nigeria. Before the two cheques were cleared, the first appellant requested for a withdrawal of some funds from the amount for which the aforesaid cheques were issued. He was allowed to do so and in fact did so with the d approval or consent of one Mr Egbunike, the bank manager who happened to be a brother of the first appellant. The aforesaid manager of the bank caused the account of the appellants in the bank to be credited with the amount for e which the cheques were issued and immediately allowed the appellants to withdraw from the account. The amount that the appellants withdrew was N661,000 f and the two cheques, which the appellants issued in favour of themselves and which they paid into their current account in the respondent bank, were for the total sum of N678,000. It was subsequently discovered that despite the fact that the g appellants were allowed by the then manager of the respondent to withdraw the said sum of N661,000 on the same day that they paid the said two cheques for the sum of N678,000 which were made by them in favour of themselves into their h account, the aforesaid two cheques for the sum of N678,000 were never sent for clearance by the then manager of the respondent or anybody. They have since then disappeared and nobody knew where they were. In effect, those two i cheques were never presented for clearance or for repayment. The appellants rested their case on the respondent’s case and did not call any witness to testify for them. The learned trial Judge, after consideration of the evidence j before him and the submission of the learned Counsel for [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 334 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. each party, dismissed the respondent’s claim. He held that a allegation of fraud or of commission of a criminal offence was the basis of the respondent’s claim, therefore, the provision of section 137(1) of the Evidence Act applied. The b respondent, according to the learned trial Judge, had to prove its case beyond reasonable doubt but, in his view, the respondent failed to discharge the burden. Dissatisfied, the respondent lodged an appeal against the c judgment to the Court of Appeal. The court below allowed the appeal. It set aside the judgment of the learned trial Judge and entered judgment for the respondent. The court below held that the amended statement of defence filed by d the appellants did not comply with the rules applying to pleadings. The amended statement of defence was evasive and in some respects equivocal. It pointed out that, in one instance, the appellants admitted an averment in the e amended statement of claim while in the same amended statement of defence the appellants denied the averment in question. The court below expressed the view that upon a true and fair construction of the amended statement of de- f fence, the reasonable conclusion was that the appellants admitted the respondent’s claim. The court below did not share or endorse the view of the learned trial Judge that the basis of the respondent’s claim was an allegation of crime g and held that, even if section 137(1) of the Evidence Act applied, the respondent discharged the burden of proving its case beyond reasonable doubt. Dissatisfied with the judgment of the Court of Appeal, the h appellants have lodged an appeal to this Court. In accordance with the relevant rules, the parties have duly filed and exchanged briefs. There were four issues identified for determination in the appellants’ brief while the respondent, in i its brief, identified five issues in addition to the four issues in the appellants’ brief. The four issues in the appellants’ brief and the seventh and ninth issues in the respondent’s brief are sufficient for the determination of this appeal. The j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 335 a four issues identified for determination in the appellants’ brief are as follows:– “(i) Whether it is correct in law to say that the material aver- b ments in the plaintiff’s pleading had all been admitted in the statement of defence in this case. (ii) Whether, having regard to the fact that the trial in the High Court was conducted on the footing that all the averments in the statement of claim had to be proved it is open to the c Court of Appeal to have allowed the plaintiff’s on the ground that there was no need for any witness to have been called to testify to the facts already admitted on the pleadings. d (iii) In the alternative to questions (i) and (ii) and on the hy- pothesis that all the facts in the statement of claim were admitted and regarded as proved, was the court below correct in concluding that the plaintiff was ‘without further ado entitled to judgment’. e (iv) Was the court below correct in the view it took regarding the reference by the defendants to a ‘newly incorporated company’.” The two additional issues formulated in the respondent’s f brief, and which are relevant for the determination of this appeal, are as follows:– “(vii) As the defendants/appellants did not appeal against the finding of the Court of Appeal that their defence at the trial g amounted to confession and avoidance, whether the defendants/appellants are not liable on the ‘confession’ (or indeed, admission) if the ‘avoidance’ fails? (ix) Has section 45 of the Bills of Exchange Act discharged the defendants from liability to pay the sum claimed”? h When this appeal came before this Court for hearing, the learned Counsel for the respondent raised a preliminary objection, on the basis of the previous notice which had been given, that the appellants could not competently raise in this i appeal the issue of the applicability of section 45 of the Bills of Exchange Act as the issue was not raised before the learned trial Judge and in the court below and no leave had been granted to the appellants to raise it in this Court. The j brief reply of the learned Senior Advocate for the appellants [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 336 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. was that the appellants could raise the issue as a party could a not in his pleadings be expected to plead law. The objection was well taken. The question whether section 45 of the Bills of Exchange Act applied was not raised b in any of the lower courts and leave to raise it in this Court was not sought and obtained. Even if it can be raised in this Court, the circumstances, as will be shown hereunder, were such that the appellants were not discharged under the provi- c sions of the section. The question was raised under issue (ix) in the respondent’s brief. The submission in the appellants’ brief was that section 45 of the Bills of Exchange Act was applicable to this case and by virtue of the provisions of the d section the appellants had been discharged from liability in respect of the cheques drawn on the Co-operative Bank of Eastern Nigeria, Aba, which were delivered to the respondent in consideration of the amount of N678,000 credited to e their (defendants’) current account with the respondent bank. The submission in the respondent’s brief was, inter alia, that the payee of the two cheques in question was not the f respondent. On the contrary, the payees of those two cheques were the appellants themselves. It was also submitted that in view of the fact that the two cheques were not presented for payment coupled with the evidence that they g were not lost or destroyed, section 45 of the Bills of Ex- change Act did not apply. When this appeal came up for hearing, the learned Senior h Advocate for the appellants pointed out that the main issue related to the two cheques which were debited to the appellants’ account in the respondent’s bank. He also pointed out that it was common ground that the two cheques were credited to the account of the appellants and that, on the basis of i the account being credited, the appellants were allowed to withdraw from the account. The learned Senior Advocate stated further that it was also common ground that the two aforesaid cheques were never presented for payment at Aba. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 337 a In his view, the crux of this matter was the non-presentation of two cheques in Aba. The learned Senior Advocate pointed out that cheques were bills of exchange and submit- b ted that if a person received a cheque issued by another person, he would have no cause of action against the person from whom he received it unless the cheque was presented for payment and was dishonoured. If the two cheques in c question in this case were not presented for payment then section 45 of the Bills of Exchange Act applied. The learned Senior Advocate for the appellants concluded his argument by submitting that a person might accept a cheque and treat it as cash. If, as in this case, the learned Senior Advocate d further submitted, the cheque was issued by the same person on his other account and paid into his account and the cheque disappeared section 45 of the Bills of Exchange Act would not be applicable. It would be up to the bank that e accepted the cheque as cash and credited the customer immediately to take whatever action open to it. The provision of section 45 of the Bills of Exchange Act is as follows:– “45(1) Subject to the provision of this Act, a bill must be pre- f sented for payment. If it be not so presented the drawer and the endorsers shall be discharged.” As earlier stated, it was common ground that the appellants g issued their two cheques in question in favour of themselves on their account at the Co-operative Bank at Aba and that they paid them into their account in the respondent bank. It was the respondent’s case that their two cheques in question had not been cleared before they were allowed to withdraw h N661,000 on the same day on the basis of their two cheques paid into their account at the respondent bank. Unknown to the respondent, the then manager of the respondent bank did not cause the cheques to be cleared and it was subsequently i discovered that the cheques had disappeared. In the circumstance, the presentment of the cheques for payment could not reasonably be expected having regard to the dishonourable conduct of the then manager of the respondent who hap- j pened to be a brother of the first appellant. Consequently, [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 338 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. section 41(3) of the Bills of Exchange Act becomes applica- a ble. Paragraph (b) of section 41(3) of the Act excuses presentment of a bill of exchange for acceptance and such bill may be treated as dishonoured by non-acceptance where, b after the exercise of reasonable diligence, such presentment cannot be effected. Presentment for repayment is also dispensed with under section 46(2)(a) of the Act where, after the exercise of reasonable diligence, presentment for pay- c ment cannot be effected. A notice of dishonour is dispensed with under section 50(2)(c)(i) of the Act, as regards the drawer, where (as in this case) the drawer and the drawees are the same persons. In the circumstance, the provisions of d section 45 of the Act is not applicable in this case. Conse- quently, the appellants were not discharged under the provisions of the section. The questions raised under the first, second and the third e issues will be considered together. The question raised under the first issue was whether it was correct in law for the court below to state, per Oguntade JCA in the lead judgment, that the material averments in the respondent’s pleading which f had all been admitted in the amended statement of claim are as follows:– “2. The defendants were formerly resident at Aba and now at Onitsha and at any other times material to this claim carry on business at Aba, Abakaliki and elsewhere in Nigeria, g under the name and style of Metropolitan Paints and Chemical Company. 3. On or about the 17th February, 1978, the defendants opened a current account with the plaintiff’s Abakaliki Branch and h thereafter operated the same account by making payments and withdrawals. 4. The said account was at all times opened, maintained and operated in the individual names of the 1st and 2nd defen- i dants. 5. On or about the 8th day of March, 1978 the defendants paid into their Account No. 9180 two Co-operative Bank of Easter Nigeria Limited, Aba Branch Cheques Nos. A37588 and A373589 for the sum of N330,000 and N348,000 j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 339 a respectively, which said cheques were issued by the defendants against their account at the said bank at Aba. The defendant’s account was accordingly credited with the total sum of N678,000 Thereafter the plaintiff’s functionaries at b Abakaliki made no effort to clear the said cheques. There was no record showing how and when the cheques were dispatched to Aba for clearing neither was there any trace of the schedule advice of cheques purchased in the file for c cheques outwards schedule for in the plaintiff’s Aba Main Branch. There has so far been no trace of the said cheques. 6. Immediately after paying in the said cheques on the 8th March, 1978 the defendants asked to be allowed to withdraw the sum of N661,000 from the said account. The de- d fendants did so fully aware that their account at the Co- operative Bank of Eastern Nigeria was in ‘RED’. The plaintiff’s Abakaliki branch manager, Michael Egbunike (the 1st defendant’s brother) promptly granted the defendant’s re- e quest and allowed them to withdraw the said sum without bothering to have the effects of the said cheques cleared. 8. On or about the 11th October, 1978 the defendant’s account No. 9180 was debited with the two Aba cheques purchased for N330,000 and N348,000 which were paid into the said f account on 8th March, 1978 and this resulted in a debit of over N670,000 on the account aforesaid. The decision by the plaintiff to debit the said account was based on the findings of their Chief Inspector as regards the said account and g the transactions pleaded hereof. A debit voucher dated 10th October, 1978 was promptly sent to the defendants through their Aba address. Moreover, a letter was addressed to the defendants informing them of the cheques and the management’s decision to debit their account. h 9. The defendants’ account thereafter became overdrawn in the sum of N711,848.03 (Seven Hundred and Eleven Thou- sand, Eight Hundred and Forty-eight Naira, Three Kobo) with compound interest at the rate of ten percent per annum i with monthly rests. 11. On or about the 4th day of November, 1979 the 1st defendant at Abakaliki submitted to the plaintiff photocopy of a certificate of incorporation of Metropolitan Paints and Chemical Company as a limited liability company. The said j document indicated that the company was incorporated on [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 340 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

24th July, 1979. The 1st defendant asked the plaintiff to a transfer the debt to the incorporated company. 13. The plaintiff did not at any time material to this claim agree with either the defendants or the incorporated company for b repayment of the overdrawn account to commence from the 30th day of June, 1980 or at all. This is more so because the incorporated company has no account with the plaintiff. 14. The plaintiff in its letter to the defendant dated 5th Novem- ber, 1979 promptly and clearly restated the above position c to the defendants aforesaid for the avoidance of any doubts. 15. Despite repeated demands made of them by the plaintiff the defendants have failed and/or neglected to pay the said balance of overdraft of N800,312.28.” d The appellants filed an amended statement of defence and the relevant averments are inter alia as follows:– “2. The defendants admit paragraphs 1, 3, 9 and 10 of the amended statement of claim. e 4. The defendants state in answer to paragraph 4 of the amended statement of claim that the said paragraph is true as regards events up to the 25th of July, when the assets and liabilities of the defendants were transferred to the Metro- politan Paints and Chemical Company Ltd. f 6. Save and except that the defendant paid in two cheques totalling N678,000 into the plaintiff Company’s branch at Abakaliki on the 8th of March, 1978, the defendants make no further admission with regard to paragraph 5 of the g amended statement of claim and will put the plaintiff to the strictest proof of the allegations therein. 7. In further answer to paragraph 5 of the amended statement of claim the defendants state that their account could not have been credited the sum of N678,000 without the Co- h operative Bank of Eastern Nigeria, Aba Branch cheques being cleared required by normal banking regulations. 8. The defendants deny paragraph 6 of the amended statement of claim and would put the plaintiff to the strictest proof of i the allegations contained therein. 9. In further answer to paragraph 6 of the amended statement of claim the defendant state that the bank draft for N661,000 given to the defendants was a different transaction altogether. The draft was as a result of an overdraft j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 341 a facility enjoyed on a continuing bases by Metropolitan Paints and Chemical Company Ltd, from the plaintiff company. The defendants also state that this was not the first time the Metropolitan Paints and Chemical Co Ltd enjoyed b such facility from the plaintiff’s company. 10. The defendants admit the amount contained in the bank Draft referred to in paragraph 7 of the amended statement of claim was paid to the defendants in the normal course of c business. They state further that the said bank draft had nothing to do with the cheques referred to in paragraph 5 of the amended statement of claim. 11. Save and except that the account of the defendants was debited with the sum of N678,000, the defendants deny that d their own cheques were ever sent to Aba or were returned unpaid to the plaintiff company or were eventually sent to the defendants and will put the plaintiff to very strict proof of the allegations contained in paragraph 8 of the amended e statement of claim. 12. The defendants deny paragraph 10 of the amended statement of claim and will put the plaintiff to strict proof of the allegations contained therein. 13. By a letter dated the 25th of July, 1979, the plaintiff com- f pany was advised that the Metropolitan Paints and Chemi- cal Company Ltd had taken over the assets and liabilities of the defendants.” Oguntade JCA, in the lead judgment of the Court below, g gave consideration to the averments in the pleadings of the parties. He stated inter alia as follows:– “Since the defendants admitted that it paid in the two cheques for N678,000 and since the defendants did not deny that they were h allowed to withdraw N661,000 on the very day the two cheques for N330,000 and N348,000 were paid in; and since the defendants have admitted that the two cheques were never presented to their Co-operative Bank of Eastern Nigeria, Aba Branch for payment, it seems to me that the material averments in the plaintiff’s pleading i had all been admitted.” It was submitted for the appellants that the object of pleadings was to define issues so that each party would be aware of the case he had to meet and that he would not be taken by j surprise at the trial. It was also submitted that where (as [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 342 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. alleged by the court below in this case) all the material alle- a gations in the statement of claim were admitted, a plaintiff should not be allowed to elaborate his case in any way of admitting evidence might embroider the facts alleged in the b statement of claim. The submission made for the respondent was that as the respondent could not predict what the learned trial Judge would make of the appellant’s admissions in the amended statement of defence, the respondent led evidence c to prove the averments in the amended statement of claim emphasising the personal liability of the appellants as claimed as opposed to the corporate liability set up by the appellants. An admission, if any, in the appellants’ amended d statement of defence of an averment in the amended statement of claim was not made an issue in the grounds of appeal of the respondent and no admission by the appellants was made an issue before the learned trial Judge. It was argued further that, as a matter of law, any evidence, which, e in any case, was at variance with the averments in the pleadings would go to no issue and the court should ignore it.

The legal position is that the averments in the statement of f claim which are admitted in the statement of defence require no evidential proof (see Obmiami Brick and Stone (Nig.) Ltd v. African Continental Bank Ltd (1992) 3 N.W.L.R. (Part 229) 260). However, a plaintiff who, in spite of an admis- g sion by the defendant of an averment in the statement of claim, leads evidence on the averment has to ensure that the oral evidence led by him is strictly in accordance with the said averment. Parties are bound by their pleadings and any h evidence which is at variance with the plaintiff’s statement of claim goes to no issue and should be completely ignored by the court (see Ohiaeri v. Akabeze (1992) 2 N.W.L.R. (Part 221) 1). So, our law does not permit evidence to be given to embroider the facts alleged in a statement of claim. i If the evidence led is superfluous or unnecessary because the fact in issue has been admitted by a party’s opponent, all that the court has to do is to ignore it. In this case, the appellants did not state any aspect of the case, and I am not aware j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 343 a of any, in respect of which there was an admission of the averment in the statement of claim and in respect of which the evidence led by the respondent was at variance with the b relevant averment in the amended statement of claim. If there was any such evidence at the trial an objection should have been taken to its admissibility. Even if there was such evidence which the appellants allowed the learned trial c Judge to admit, that would not have converted the admission of the relevant averment to a denial of it; the appellants’ admission stated in the amended statement of defence will remain intact. d On the question of the state of the pleadings before the respondent commenced leading of evidence, my view to the court below, is that it was not correct to state, as the court below state per Oguntade JCA that the material averments in e the respondent’s pleading had all been admitted or to state that as all the facts in the statement of claim were admitted, the respondent was without further ado entitled to judgment. It is clear from the averments in the amended statement of f claim and the amended statement of defence, particularly those of them set out above, that, if the aforesaid pleadings were read as a whole as they should be read, there were material averments in the amended statement of claim which g the appellants did not admit. For example, the averments in the amended statement of claim was that it was on the basis of the two cheques for the total amount of N678,000 issued by the appellants in favour of themselves on their account at the Co-operative Bank of Eastern Nigeria, Aba and paid into h their account at the respondent bank at Abakaliki that they were allowed to withdraw immediately thereafter the sum of N661,000 from their account at the respondent bank. Not only did the appellants not admit the aforesaid averment, i their own averment on the point was that their said two cheques were issued by them in connection with another transaction. They further averred that the alleged debt or overdraft mentioned in the amended statement of claim had been j taken over by another company subsequently incorporated. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 344 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The contention of the respondent in the amended statement a of claim was that it never agreed with the alleged or purported taking over of the debt or overdraft from the appellants by the company subsequently incorporated. b The result of the foregoing analysis is that the respondent, in order to succeed, had to adduce evidence in support of any averment in the amended statement of claim which was not admitted by the appellants in their amended statement of c defence, otherwise such an averment would be deemed to have been abandoned. This is because mere averment without proof of the facts pleaded is no proof of such fact if they are not admitted (see Adegbite v. Ogunfaolu (1990) 4 d N.W.L.R. (Part 146) 578). It has been shown above that at least there was one material averment in the amended statement of claim which the appellants did not admit. So, it was not correct to state, as the Court below stated, that the mate- e rial averments in the respondent’s pleading had all been admitted in the amended statement of defence in this case. It has also been shown that if the respondent wanted to succeed it had to adduce evidence to prove at least the aforesaid f material averment in the amended statement of claim which was not admitted in the amended statement of defence, that is the reason (according to its version) why the appellants issued the two cheques for N678,000 in favour of themselves, on their account at the Co-operative Bank, Aba and g paid them into their account at the respondent bank at Abakaliki. There was also the allegation in the amended statement of defence that the debt or overdraft had been taken over by a limited liability company subsequently in- h corporated. There was need to adduce evidence by the respondent in rebuttal of the alleged or purported take over. Therefore, if all the averments in the amended statement of claim were admitted or regarded as proved, the court below i was, with respect, not correct in concluding that the respondent was “without further ado entitled to judgment”. Though my answers to the questions raised under the first and the third issues are in the negative, the question whether j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 345 a the alleged error or misdirection on the part of the court below could lead to a reversal of its judgment is a different matter. It is not every error committed by a lower court that b will lead to the reversal of its judgment by an appellate court. In order that the judgment may be reversed on account of such error, the error must have substantially affected the result of the decision (see Olubode v. Salami (1985) 2 c N.W.L.R. (Part 7) 282). Further, where the complaint is about alleged errors of law or misdirection committed by the lower court, the success of the ground or grounds of appeal alone is not sufficient to warrant the reversal of the judgment of the lower court unless the errors in law or misdirec- d tion affected the judgment in a way that is crucial to the decision (see Ayoola v. Adebayo and others (1969) 1 All N.L.R. 159 at 164 and Osafile v. Odi (No. 1) (1990) 3 N.W.L.R. (Part 137) 130). The question whether the alleged e errors of law or misdirection will result in the reversal of the judgment of the court below will be considered later in this judgment. f The question raised under the second issue was whether, having regard to the fact that the trial in the High Court was conducted on the footing that all the averments in the amended statement of claim had to be proved, it was open to g the Court of Appeal to have allowed the respondent’s appeal on the ground that there was no need for any witnesses to have been called to testify to the facts already admitted on the pleadings. The record of proceedings in the appeal showed clearly that the appeal of the respondent was al- h lowed on the basis of what the court below thought was the merit of the case after giving consideration to the relevant issues and not merely upon the ground that there was no need for any witness to have been called to testify to the i facts already admitted on the pleadings. It certainly would not have been proper for the parties in this case to conduct the trial in the High Court on the footing that all averments in the amended statement of claim had to be proved. If they j did so, that was their business. The law applying to the [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 346 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. conduct of cases in the High Court include the law of evi- a dence (Evidence Act) and the law regulating procedure (the High Court (Civil Procedure) Rules). Whatever may be the footing upon which the parties to a case may decide to con- b duct their case, the relevant provisions of the Evidence Act and the civil procedure applicable in the court in question will apply except where it is otherwise provided by law. If certain facts averred in the amended statement of claim are c admitted in the amended statement of defence then no evidential proof of the facts is required and it will not be necessary to call any witness to testify to the fact already admitted (see Obmiami Brick and Stone (Nig.) Ltd v. African Conti- d nental Bank Ltd (supra). Further, any fact admitted by a defendant in his pleading is taken as established and forms part of the agreed facts of the case (see Okparaoke etc. v. Egbuonu and others (1941) 7 W.A.C.A. 53 at 54; Uredi v. Dada (1988) 1 N.W.L.R. (Part 69) 237). In this case, I have e shown that at least one material averment in the amended statement of claim was not admitted by the appellants. The onus was on the respondent to adduce evidence to prove the averment because the onus of proving a particular fact is on f the party who asserts it (see Okubule v. Oyagbola (1990) 4 N.W.L.R. (Part 147) 723; and Ike v. Ugboala (1993) 6 N.W.L.R. (Part 301) 539. I have also pointed out in this judgment that, according to the averment in the amended g statement of defence, the debt or overdraft had been allegedly taken over by a limited liability company subsequently incorporated by the appellants. It was for the respondent to adduce evidence in rebuttal of the purported take-over of h liability for the debt or overdraft by the newly incorporated limited liability company, in anticipation of any evidence, on the point, that the appellants might adduce. This is because in civil cases the onus of proving a particular fact is i fixed by the pleadings. The onus does not remain static but shifts from side to side and the onus of adducing further evidence is on the party who will fail if such evidence is not adduced (see Nigerian Maritime Services Ltd v. Afolabi j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 347 a (1978) 2 S.C. 79, 84; and H.M.S. Ltd v. First Bank (1991) 1 N.W.L.R. (Part 167) 290. The crucial issue, as I have earlier stated, is whether the court below was right in entering b judgment for the respondent after consideration of the case on its merit and that issue will subsequently be determined in this judgment. There was controversy in the briefs filed by the parties c about the statement made by Oguntade JCA in the judgment that the appellants, having admitted that their account with the respondent was in debit to the tune of N711,843.03, the respondent was without further ado entitled to judgment. d The learned Justice of the Court below was quoted as having stated as follows:– “In paragraph 9 of the amended statement of claim, the plaintiff pleaded that the account of the defendants became overdrawn in e the sum of N711,843.03 and that this amount included compound interest at [a] rate of ten percent. The defendants expressly admitted this paragraph 2 of the amended statement of defence.” I think that what was involved in relation to the amount f allegedly owed by the appellants was far more than the sum of N711,848.03 and more complicated than the issue involved in the alleged admission of N711,848.03 as the amount due from the appellants. The amended statement of g defence of the appellants was in total disarray in relation to this aspect of the matter. In paragraph 10 of the amended statement of claim, the respondent averred as follows:– “As at 26th November, 1979 the debit balance of the said over- h draft with compound interest stood at N800,312.28 (Eight Hun- dred Thousand, Three Hundred and Twelve Naira and Twenty- eight Kobo). The said debit balance is reflected in the defendants’ statement of account which will be found at the end of this suit. The defendants were supplied their own copy of the statement of i account regularly.” In paragraph 2 of the amended statement of defence, the paragraph of the amended statement of claim admitted by the appellants included paragraph 10 of the amended state- j ment of claim quoted above. Somehow, the appellants [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 348 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. averred in paragraph 12 of the amended statement of de- a fence that they denied paragraph 10 of the amended statement of claim and would put the respondent to strict proof of the allegation therein. So far, no step has been taken to sort b out the conflicting averments, in relation to paragraph 10 of the amended statement of claim, which are in paragraphs 2 and 12 of the amended statement of defence. The legal consequence of such conflicting averments in pleadings will be c considered and determined when dealing with the consideration of the case on its merit. The next question for consideration is the question raised under the seventh issue formulated in the respondent’s brief. d It is that the appellants did not appeal against the finding of the court below that their defence at the trial amounted to confession and avoidance, whether the appellants were not liable on the “confession” (or indeed, admission) if the e “avoidance” failed. The court below held that the defence of the appellants was confession and avoidance, consistent with its view, which has been described in his judgment as not being entirely correct, that the appellants admitted all the f material averments in the respondent’s amended statement of claim and its view that the only defence of the appellants was that a limited liability company subsequently incorporated had, with the alleged consent of the respondent, taken g over the appellants’ liability for the debt or overdraft. The contention in the respondent’s brief was that, as the appellants did not appeal against the aforesaid finding, it is deemed to be correct. As the appellants failed to prove the h allegation that a limited liability company had, with the agreement of the respondent, taken over the appellants’ liability, the court below was right in entering judgment for the respondent. i The respondent led evidence through PW1, PW2 and PW3 on the material averments in the amended statement of claim whether they were admitted or not admitted in the amended statement of defence. The evidence aforesaid also covered j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 349 a the issue whether the respondent ever agreed that a limited liability company subsequently incorporated should take over the appellants’ liability for the debt or overdraft. In b short, the evidence covered all the material averments in the amended statement of claim, whether admitted or not by the appellants in the amended statement of defence, establishing the liability of the appellants for the debts or overdraft. The c evidence also included evidence that the respondent never agreed that a limited liability company should take over the liability of the appellants for the debt or overdraft. The aforesaid witnesses of the respondent were cross-examined by the learned Counsel for the appellants and none of the d witnesses were shaken on the evidence which he gave. The appellants did not lead any evidence in support of the averments in their amended statement of defence; they rested their defence on the respondent’s case. The foregoing cer- e tainly had some serious legal implications or consequences. It is the duty of a Judge to consider the totality of the evidence before him and to determine which has weight and f which does not have weight by putting the evidence on an imaginary scale (see Mogaji v. Odofin (1978) 4 S.C. 91 at 93. However, minimum evidence which can discharge the burden of proof is enough where there is no evidence to be g put on the other side (see Buraimoh v. Bamgbose (1989) 3 N.W.L.R. (Part 109) 352. In the present circumstances, it is reasonable to conclude that the evidence led by the respondent through its witnesses was unchallenged and uncontradicted and there was nothing to show that the evidence was h incredible. Evidence which is unchallenged and uncontradicted, if credible, ought to be accepted as there is nothing on the other side to balance it (see Adejumo v. Ayantegbe (1989) 3 N.W.L.R. (Part 110) 417. Further, if the evidence i led on the facts pleaded is admissible, relevant, uncontradicted and not discredited by cross-examination, a court can legally rely and act on it (see Obmiami’s case (supra)). With reference to the averments in the amended statement of j defence and in particular the averment that the respondent [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC 350 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. agreed that a limited liability company subsequently incor- a porated should take over the liability of the appellants for the debt or overdraft, it is sufficient to say that pleading cannot constitute evidence and a defendant who does not b give or lead evidence in support of the averments in his pleading or in challenge of the evidence of the plaintiff is deemed to have accepted the facts adduced by the plaintiff notwithstanding the general traverse (see Federal Capital c Development Authority v. Naibi (1990) 3 N.W.L.R. (Part 138) 270 and Obmiami’s case (supra). Finally, if a party to an action fails to or does not lead evidence in support of the averments in his pleading, the averments will be taken as d having been abandoned (see Federal Capital Development Authority’s case (supra). The foregoing was not all. The paragraphs of the amended statement of claim admitted in paragraph 2 of the amended e statement of defence included paragraph 10 of the amended statement of claim. In paragraph 12 of the amended statement of defence, the appellants denied paragraph 10 of the amended statement of claim. In other words, in the same f pleading the appellants admitted paragraph 10 of the amended statement of claim and also denied the aforesaid paragraph of the amended statement of claim. In order to raise an issue of fact, a defendant should traverse an aver- g ment in the amended statement of claim expressly or by necessary implication. Therefore, if the defendant refuses to admit a particular allegation in the statement of claim, he must state so specifically and not by stating that he is not in h a position to admit or deny the allegation (see Lewis and Peat Ltd v. Akhimien (1976) 1 All N.L.R. (Part 1) 460. Such a plea is not sufficient denial of the averment in the statement of claim (see Ohiaeri’s case (supra). The situation is even worse in this case than in a case where a defendant i pleads that he is not in a position to admit or deny an averment in the amended statement of claim. This is a case in which there are two conflicting pleas one of which could not stand while the other subsisted. What was very significant j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC A.I. Egbunike and another v. African Continental Bank Ltd 351 a was that the conflicting pleas in the amended statement of defence were deliberate. The court below, in its judgment, referred and drew attention to the conflicting pleas in the b appellants’ pleading but even in this Court no step was taken to regularise the situation. In my view, the averment in paragraph 10 of the amended statement of claim was not denied or sufficiently denied by the appellants. The result is that c from the oral evidence led by the respondent, on the material points, which was uncontradicted and unchallenged, there was, in addition, the averment in paragraph 10 of the amended statement of claim, which was not denied in the d amended statement of defence, to the effect that, inter alia, as at 26th November, 1979 the debit balance of the said overdraft with compound interest stood at N800,312.28. That was the amount for which the court below gave judg- e ment. Having regard to the totality of the evidence before the court, the answer to the question raised under issue (vii) in the respondent’s brief is in the affirmative. As the evidence led by the respondent, which was uncontradicted and f unchallenged, related to all the material averments in the amended statement of claim (whether admitted or not admitted in the amended statement of defence) and adequately supported the judgment that the court below entered for the g respondent, the answers to the questions raised under the first, second and the third issues formulated in the appellants’ brief are no longer fundamental as the error, if any, of the court could not, in the circumstances, have caused a h miscarriage of justice. On the whole, the appeal does not succeed and it is hereby dismissed. The judgment of the court below for the sum of N800,312.28 together with compound interest at the rate of i 10% per annum with monthly rests and with effect from 27th November, 1979 till the debt is fully paid and the order for costs of N500 awarded to the respondent are hereby affirmed. The respondent is awarded N1,000 being costs of j the proceedings in this Court. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

352 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a BELGORE JSC: I read in advance the judgment of my learned brother, Adio JSC, and I agree with his reasoning in affirming the judgment and order of the Court of Appeal. For the same reasons I dismiss this appeal and affirm the b decision of the Court of Appeal. KUTIGI JSC: I read in advance the judgment just delivered by my learned brother, Adio JSC. I agree with the conclusion that the appeal lacks merit and ought to be dismissed. It c is accordingly dismissed with costs as assessed. I also endorse the consequential orders contained therein. OGUNDARE JSC: I have had the advantage of a preview of d the judgment of my learned brother, Adio JSC, just delivered. I agreed with him that this appeal lacks merit and should be dismissed. I, however, wish to say a few words of my own. e The facts briefly are as follows: The respondent was a banker to the appellant at all times material to this case. The appellants’ current account No. 9180 was opened on 17th February, 1978 at the Abakaliki branch of the respondent f and was being maintained and operated in the individual names of the appellants. On 8th March, 1978, that is, barely three weeks after opening the account, the appellants paid into the said account two Co-operative Bank of Eastern g Nigeria Ltd (Aba branch) cheques Nos. A37588 and A37589 for the sum of N330,000 and N348,000 respectively. The said cheques were issued by the appellants in their own favour against their account at the said Co-operative Bank at h Aba. The appellants’ account with the respondent was credited with a sum of N678,000 being the total sum of the two cheques. For unexplained reasons the two cheques were not presented for payment and indeed there has been no trace of i them ever since. On 8th March, 1978, that is, the day of the lodgements into the account, the appellants requested, and were allowed by the respondent’s Abakaliki branch manager to withdraw the sum of N661,000 from the said account j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC A.I. Egbunike and another v. African Continental Bank Limited 353 a even though those cheques had not been cleared as required by normal banking practice. It may, however, be of interest to mention that the respondent’s branch manager at the rele- b vant time, Michael Egbunike, was the first appellant’s brother. Following the findings of the respondent’s Chief Inspector, the appellant’s account No. 9180 with the respondent was on c 11th October, 1978 debited with the sums of N330,000 and N348,000 being the amounts on the appellants’ cheques credited on 8th March, 1978 to their account with the respondent and drawn on their account with the Co-operative d Bank of Eastern Nigeria, Aba branch. A debit voucher to that effect was sent to the appellants by the respondent. Their account became overdrawn to the sum of N771,848.03. As at 26th November, 1979 the debit balance e of the said overdraft with interest had risen to N800,312.28. Meanwhile, the appellants had incorporated their business in the name of Metropolitan Paints and Chemical Company Limited and requested the respondent to transfer their in- f debtedness to the new company. The respondent refused and later sued the appellants claiming:– “(i) The sum of N800,312.28 (Eight Hundred Thousand, Three Hundred and Twelve Naira, Twenty-eight Kobo) balance of g overdraft with compound interest at the rate of 10% per annum as at close of business on the 26th November, 1979. (ii) Compound interest at the rate of 10% per annum with monthly rests until the debt is fully repaid or judgment is h obtained counting from 27th November, 1979.” At the trial, three witnesses testified in support of the respondent’s case. The appellants led no evidence for the defence. After addresses by learned Counsel for the parties i the learned trial Judge found for the appellants and dismissed respondent’s claim. The respondent appealed successfully to the Court of Appeal which court set aside the judgment of the trial High Court and entered judgment j in favour of the respondent in terms of its claims. The [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 354 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. appellants, being dissatisfied, have now appealed to this a Court upon the following amended grounds of appeal:– “(i) The court below erred in law in finding or in coming to the conclusion that the defendants have ‘admitted that their ac- b count with the plaintiffs (sic) was in the debit to the tune of N711,848.03’ and that accordingly the plaintiff was ‘without further ado entitled to judgment’. (ii) The court below erred in law in failing to observe that both parties conducted their cases at the trial on the footing that c there was no admission by the defendants that they were owing the plaintiff a kobo. Accordingly, the plaintiff ought not to have been permitted to put his case on a completely different footing before the Court of Appeal. d (iii) The court below erred in law in entering judgment in favour of the plaintiff when there was clear evidence before it that at the time when the current account of the defendants with its (i.e. plaintiff’s) Abakaliki Branch was debited with the sum of N678,000 on 11/10/78, the two cheques issued by e the defendants and delivered to the plaintiff for N330,000 and N348,000 had never been presented for payment. (iv) The court below took a wrong view of the facts when it held that:– f ‘The defendant tried to prevail on the plaintiff that a newly incorporated company would take over the existing account of the defendants and its debts; and also that the debt would be paid instalmentally with effect from 30th June, 1980. The plaintiff did not agree with these g proposals’” (the particulars are omitted). In the appellants’ brief of argument, the following issues are set out as calling for determination:– “(i) Whether it is correct in law to say ‘the material averments h in the plaintiff’s pleading had all been admitted’ in the statement of defence in this case. (ii) Whether, having regard to the fact that the trial in the High Court was conducted on the footing that all the averments in i the statement of claim had to be proved it is open to the Court of Appeal to have allowed the plaintiff’s appeal on the ground that there was no need for any witnesses to have been called to testify to the facts already admitted on the pleadings. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC A.I. Egbunike and another v. African Continental Bank Limited 355 a (iii) In the alternative to Question (i) and (ii) and on the hy- pothesis that all the facts in the statement of claim were admitted or regarded as proved, was the court below correct in concluding that the plaintiff was ‘without further ado en- b titled to judgment’. (iv) Was the court below correct in the view it took regarding the reference by the defendants to ‘a newly incorporated company’.” c In the respondent’s brief a preliminary objection was raised, notice of which was given in the brief to the effect that ground (iii) of the amended grounds of appeal is incompe- d tent in that it is being raised for the first time in this Court without obtaining the leave of court and without complying with Order 6 Rule 6(1) of the Rules of this Court. The objection was argued in extenso both in the brief and in the oral e address by learned Counsel for the respondent, Mr Nwokoye. It is the contention of Mr Nwokoye that the ground raises an issue requiring further evident. The appellants have not filed any reply brief on this point raised in the f respondent’s brief nor did Chief Williams, S.A.N., learned leading Counsel for the appellants address us on it other than to say that it was an issue of law. With respect to the learned Senior Advocate, one expects the appellants to have filed a g reply brief to the new point raised in the respondent’s brief. Not only that, the issue of the discharge of appellants’ responsibility by section 45 of the Bills of Exchange Act is a fundamental issue. h Although some of the averments in the pleadings might support such a defence (I express no opinion in that), the fact remains that the trial Court was not addressed on the issue neither was it raised in this Court as is done in the i amended ground (iii), leave of this Court ought to have been first sought and obtained. In my respectful view, the preliminary objection is well taken and I, therefore, strike out ground (iii), I may, however, observe that in the issue set out j in the appellants’ brief no one of them is predicated on this [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 356 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. ground. I also observe that on page 5 of the appellants’ brief, a the following appears:– “5. Liability of defendants The Court of Appeal overlooked the most vital fact affect- b ing the liability of the defendants as drawers of the two cheques for N330,000 and N348,000. This was the fact that the two cheques were never presented for payment to the Co-operative Bank of Eastern Nigeria. Section 45 of the Bills of Exchange Acts enacts as follows:– c ‘Subject to the provisions of this ordinance, a bill must be duly presented for payment. If it be not so presented the drawer and endorsers shall be discharged.’” The arguments in section 5 of the brief do not arise out of d the four issues set out in the appellants’ brief. I, therefore, also discountenance it. The respondent’s brief set out what is referred to as five additional issues for determination. In my respectful view, e having regards to the grounds of appeal, I think the issues as set out in the appellants’ brief will suffice to dispose of this appeal. I will take the first issues together as was done by Chief Williams in his brief. In the amended statement of f claim the respondent pleaded inter alia as follows:– “1. The plaintiff is a Company incorporated in Nigeria with Limited Liability having its registered office in Lagos and carrying on business at Abakaliki as bankers. g 2. The defendants were formerly resident at Aba and now at Onitsha and at any other times material to this claim carry on business at Aba, Abakaliki and elsewhere in Nigeria, under the name and style of Metropolitan Paints and Chemical Company. h 3. On or about the 17th February, 1978, the defendants opened a current account with the plaintiff’s Abakaliki Branch and thereafter operated the same account by making payments and withdrawals. The plaintiff at the trial of this suit will i found on a copy of resolution dated 16/2/78 appointing the 1st defendant the sole signatory to their account. 4. The said account was at all material times opened, maintained and operated in the individual names of the 1st and 2nd defendants. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC A.I. Egbunike and another v. African Continental Bank Limited 357 a 5. On or about the 8th day of March, 1978 the defendants paid into their account No. 9180 two Co-operative Bank of East- ern Nigeria Limited, Aba branch Cheque Nos. A37588 and A373589 for the sum of N330,000 and N348,000 respec- b tively, which said cheques were issued by the defendants against their account at the said bank at Aba. The defendants account was accordingly credited with the total sum of N678,000. Thereafter the plaintiff’s functionaries at c Abakaliki made no effort to clear the said cheques. There was no record showing how and when the cheques were dispatched to Aba for clearing neither was there any trace of the schedule advice of cheques purchased in the file for cheques outwards schedule for the plaintiff’s Aba Main d branch. There has so far been no trace of the said cheques. The tellers with which the said cheques were paid in will be founded upon at the trial. 6. Immediately after paying in the said cheques on the 8th e March, 1978 the defendants asked to be allowed to withdraw the sum of N661,000 from the said account. The defendants did so fully aware that their account at the Co- operative Bank of Eastern Nigeria was in ‘RED’. The plaintiff’s Abakaliki branch manager, Michael Egbunike (the 1st f defendant’s brother) promptly granted the defendant’s request and allowed them to withdraw the said sum without bothering to have the effect of the said . . . 7. On or about the 16th day of March, 1978 the defendants g lodged in their account two bank drafts Nos. D.4128317 for N331,000 and D.128318 for N330,000 (totalling N661,000) issued on Martin Street, Lagos branch of the plaintiff. On the same day the defendants insisted on withdrawing the total amount even though to their knowledge they had no h funds at their Co-operative Bank of Eastern Nigeria Limited Aba account to cover their two earlier cheques lodged into their account No. 9180 on 8th March, 1978. The plaintiff’s Manager, Mr Michael Egbunike once more allowed the defendants to withdraw the said sum on borrowed A.C.B. i Limited Cheque No. 026538 dated 16th March, 1978. The said cheque will be founded upon at the trial of this suit. 8. On or about the 11th October, 1978 the defendant’s account No. 9180 was debited with the two Aba cheques purchased j for N330,000 and N348,000 which were paid into the said [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 358 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

account on 8th March, 1978 and this resulted in a debit of a over N670,000 on the account aforesaid. The decision by the plaintiff to debit the said account was based on the findings of their Chief Inspector as regards the said account and the transactions pleaded hereof. A debit voucher dated 10th b October, 1978 was promptly sent to the defendants through their Aba address. Moreover, a letter was addressed to the defendants informing them of the cheques and the management decision to debit their account. The plaintiff will at the c trial found on the debit voucher as well as the said letter and the defendants are hereby given notice to produce the same. 9. The defendants’ account thereafter became overdrawn in the sum of N771,848.03 (Seven hundred and seventy one thousand, eight hundred and forty-eight naira, three kobo), d with compound interest at the rate of ten percent per annum with monthly rests. 10. As at 26th November, 1979 the debit balance of the said overdraft with compound interest stood at N800,312.28 e (Eight Hundred Thousand, Three Hundred and Twelve Naira, Twenty-eight Kobo). The said debit balance is reflected in the defendants’ statement of account which will be founded upon at the trial of this suit. The defendants were supplied their own copy of the statement of account f regularly. 11. On or before the 4th day of November, 1979 the 1st defendant at Abakaliki submitted to the plaintiff [a] photocopy of a certificate of incorporation of Metropolitan Paints and g Chemical Company as a limited liability company. The said document indicated that the company was incorporated on 24th July, 1979. The 1st defendant asked the plaintiff to transfer the debt to the incorporated company. h 12. In a letter dated 6th day of November, 1979, referred to as 1/2/79 signed by the 1st defendant as the managing director and addressed to the plaintiff, in reply to the plaintiff’s demand letter, the 1st defendant argued that the debt was to be repaid as from the 30th day of June, 1980, and assured the i plaintiff that the defendants will honour their obligation. This letter will be founded upon at the trial of this suit. The defendants are hereby given notice to produce at the trial of this suit copy of the plaintiff’s demand letter to which the defendants were replying. The plaintiff will at the trial j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC A.I. Egbunike and another v. African Continental Bank Limited 359 a found on a letter from the Ag. Chief Inspector A.C.B. Ltd, on the subject matter dated 3/10/78. 13. The plaintiff did not at any time material to this claim agree with either the defendants or the incorporated company for b repayment of the overdrawn account to commence as from the 30th day of June, 1980, or at all. This is more so because the incorporated company has no account with the plaintiff.” c In their own amended statement of defence, the appellants pleaded inter alia as hereunder:– “1. Save as is herein expressly admitted the defendants deny each and every allegation of facts contained in the statement d of claim appearing as if they were set out seriatim and denied specifically and will plead and rely on all legal and equitable defences which may be open to the defendants and will specifically plead and rely on:– (a) Laches; e (b) Acquiescence; and (c) Estoppel by conduct. 2. The defendants admit paragraphs 1, 3, 9 and 10 of the f amended statement of claim. 3. The defendants in answer to paragraph 2 of the amended statement of claim state that the allegations contained in the said paragraph are true as to the period up to the 25th of g July, 1979 when the assets and liabilities of Metropolitan Paints and Chemical Company were taken over by Metro- politan Paints and Chemical Company Ltd 4. The defendants state in answer to paragraph 4 of the amended statement of claim that the said paragraph is true h as regards events up to the 25th of July, when the assets and liabilities of the defendants were transferred to the Metro- politan Paints and Chemical Company Ltd 5. In further reply to the said paragraph 4 of the amended i statement of claim the defendants state that they ceased to carry on any business or operate the accounts since the said 25th of July, 1979. 6. Save and except that the defendant paid in two cheques totalling N678,000 into the plaintiff company’s branch at j Abakaliki on the 8th of March, 1978, the defendants make [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 360 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

no further admission with regard to paragraph 5 of the a amended statement of claim and will put the plaintiff to the strictest proof of the allegations therein contained. 7. In further answer to paragraph 5 of the amended statement b of claim the defendants state that their account could not have been credited with the sum of N678,000 without the Co-operative Bank of Eastern Nigeria, Aba branch cheques being cleared as required by normal banking operations. 8. The defendants deny paragraph 6 of the amended statement c of claim and would put the plaintiff to the strictest proof of the allegations contained therein. 9. In further answer to paragraph 6 of the amended statement of claim the defendants state that the bank draft for d N661,000 given to the defendants was a different transaction altogether. The draft was as a result of an overdraft facility enjoyed on a continuing basis by Metropolitan Paints and Chemical Company Ltd from the plaintiff company. The defendants also state that this was not the first time that e Metropolitan Paints and Chemical Co Ltd enjoyed such facility . . . 10. The defendant admit that the amount contained in the bank Draft referred to in paragraph 7 of the amended statement of claim was paid to the defendants in the normal course of f business. They state in further reply that the said bank draft had nothing to do with the cheques referred to in paragraph 5 of the amended statement of claim. The rest of paragraph 7 of the amended statement of claim is denied and the plain- g tiff will be put to strict proof of the allegations therein contained. 11. Save and except that the account of the defendant was debited with the sum of N678,000 the defendants deny that their own cheques were ever sent to Aba or were returned h unpaid to the plaintiff company or were eventually sent to the defendants and will put the plaintiff to very strict proof of the allegations contained in paragraph 8 of the amended statement of claim. i 12. The defendants deny paragraph 10 of amended statement of claim and will put the plaintiff to strict proof of the allegations contained therein. 13. By a letter dated the 25th of July, 1979, the plaintiff company was advised that the Metropolitan Paints and j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC A.I. Egbunike and another v. African Continental Bank Limited 361 a Chemical Company Ltd had taken over the assets and liabilities of the defendants. Paragraph 11 of the amended statement of claim in so far as it conflict with the foregoing is denied. b 14. The defendant deny that the letter dated 6th November, 1979 was referred to as 1/12/79 but admit the rest of paragraph 12 of the amended statement of claim. The defendants will also rely on this letter. c 15. The defendants deny paragraph 13 of the amended statement of claim and will put the plaintiff to strict proof of the allegations therein contained. In further thereto, the defendants state that at no time did the plaintiff indicate that it was not ready and willing to receive payments from the d Metropolitan Paints and Chemical Company Ltd nor did it require the said company to open a new account with the said plaintiff’s company but had by conduct represented to the defendants that it was willing to deal with the company.” e The complaint of the appellants is that the lower court, per Oguntade JCA, was wrong having regard to the state of the pleadings to say that “the material averments in the plaintiff’s pleadings had all been admitted”. This is what Ogun- f tade JCA said:– “Although the plaintiff pleaded in paragraph 5 of the amended statement of claim, that the two cheques for N330,000 and N348,000 were drawn on the defendants’ account with the Co- g operative Bank of Eastern Nigeria Limited, Aba, the defendants did not aver that their account at the Aba branch of Co-operative Bank of Eastern Nigeria was debited for the N678,000 being the face value of the two cheques. Indeed, the defendants in paragraph 11 of the defence admitted h that the cheques were not sent to Aba, or returned unpaid to the plaintiff or eventually sent to the defendants. Be it noted that it was the case of the plaintiffs that the two cheques could not be traced. In other words, they were lost and i never presented for payment against the account of the defendants at Aba. Since the defendants admitted that it paid in the two cheques for N678,000 and since the defendants did not deny that they were allowed to withdraw N661,000 on the very day the two cheques for N330,000 and N348,000 were paid in, and since j the defendants have admitted that the two cheques were never [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC 362 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

presented to their Co-operative Bank of Eastern Nigeria, Aba a Branch for payment, it seems to me that the material averments in the plaintiff’s pleading had all been admitted. In paragraph 9 of the amended statement of claim, the plaintiff b pleaded that the account of the defendants became overdrawn in the sum of N771,848.03 and that this amount included compound interest at the rate of ten percent. The defendants expressly admitted this in paragraph 2 of the amended statement of defence.” c Going by the pleadings as quoted above by me, there is some force in the observation of Oguntade JCA. The Justice of the Court of Appeal, however, did not advert his mind to the inconsistency in the pleadings of the appellants in re- d spect of paragraph 10 of the respondent’s amended statement of claim. In paragraph 2 of the amended statement of defence the appellants admitted paragraph 10 but in paragraph 12 of the same defence they denied it. They, however, did not set up any facts to countermand the averments in the e respondent’s paragraph 10. The factual situation is that, although the respondent might not have been given judgment on the state of the pleadings, it, however, called witnesses in support of its case. On the other hand, the f appellants did not adduce any evidence. It is right to say, therefore, that the evidence for the respondent stood unchallenged and as such evidence supported respondent’s case, judgment ought to have been entered by the learned trial g Judge in his favour. Whatever misdirection (if any) there might be in the judgment of the court below such misdirection, however, did not occasion any miscarriage of justice. I would, therefore, not disturb the judgment of the court be- h low on the issues under consideration. In view of what I have said above, I do not think any useful purpose would be served by pronouncing on issue (iii). The view expressed by the court below, per Oguntade JCA, i to the effect that the respondent was entitled to judgment on the pleadings “without further ado” is at best an obiter. The fact remains that evidence was called by the respondent in support of its case. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Ogundare JSC A.I. Egbunike and another v. African Continental Bank Limited 363 a Having regard to the concession made in the appellants’ brief on issue (iv) that the error complained therein in no way directly affected the judgment of the court below, I b need not say more on this issue either. On the state of the pleadings and the uncontradicted evidence adduced in support of the respondent’s case, the court below was perfectly justified in arriving at the conclusion entering judgment for c the respondent. I see no merit in this appeal and, like my learned brother, Adio JSC, I too dismiss it with N1,000 costs to the respondent. IGUH JSC: I have had the advantage of a preview of the d lead judgment just delivered by my learned brother, Adio JSC. I agree entirely with him and have nothing more to add. The appeal accordingly fails and it is dismissed with costs as assessed in the lead judgment. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

364 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a Allied Bank of Nigeria Limited v. Jonas Akubueze COURT OF APPEAL, ENUGU DIVISION EJIWUNMI, ACHIKE, TOBI JJCA b Date of Judgment: 13 FEBRUARY 1995 Suit No.: CA/E/43/93

Banking – Accounts – Clause in agreement stating that “all accounts opened in my/our name with your Bank including c any accounts in foreign currency constitute a single combined Current Account” – Meaning of – Accounts – Cus- tomer operating two accounts in different names – When accounts can be merged – When they cannot be merged d Banking – Cheques – Wrongful dishonour – Recovery of damages therefor – Principles governing – Substantial damages Banking – Wrong dishonour of cheque of trader – Whether e trader needs prove actual loss

Facts The plaintiff/respondent, a trader, was at all times material a f customer of the defendant bank and operated two accounts Nos. 126 and 1028 under two different registered business names to wit, J. Brown Commercial Agencies and New World Supermarket, respectively. The plaintiff drew a g cheque on account No. 1028 which was returned unpaid with the inscription:– “a. Represent b. Drawer’s Attention required” h even though there was a sufficient amount to cover the cheque. The plaintiff therefore commenced an action for damages for breach of contract. The defence of the defendant was that, even though at the i time the plaintiff presented his cheque there was sufficient funds in account No. 1028, the cheque could not be honoured as the funds in the two accounts when combined were not sufficient to cover the cheque because account No. 126 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

Allied Bank of Nigeria Ltd v. Jonas Akubueze 365 a had been overdrawn as a result of a loan of N3,000 (Three Thousand Naira) given the plaintiff. The defendant also contended that by the agreement, exhibit O, signed by the b plaintiff when he obtained the said loan, the bank had the right to combine the two accounts held by the plaintiff with it to offset the credit in one with the debit in the other. The learned trial Judge granted the plaintiff’s claims c whereupon the defendant appealed to the Court of Appeal contending that it has a right to combine the accounts of the respondent. Clause 9 of exhibit O reads:– d “You are entitled to consider that all accounts opened to in my/our name with your bank, including any accounts in foreign currency, constitute a single combined current account, all debit and credit balances off-setting each other, and the benefit of the guarantees e particularly ear-marked to each item of this current account shall remain assigned to secure the balance of the said combined account without any novation being opposed by third parties.” Held – f 1. Where a banker opens two accounts for a customer, one in the customer’s own name and the other in a business name, there is, in the absence of any express agreement to the contrary, an implied agreement that the accounts g are to be kept distinct and separate. In the instant case, the appellant was properly found to have wrongly dishonoured respondent’s cheque properly drawn on his account having wrongly combined the two h accounts. 2. Where by agreement, express or implied, a customer’s several accounts with a banker are to be kept distinct and separate, the banker has no right to combine them or to i transfer assets or liabilities from one account to another, without reasonable notice of the intention so to do, or without the consent of the customer. In the instant case, since the consent of the respondent j was not sought and no reasonable notice to combine the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

366 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

accounts was given to the respondent, the appellant was a wrong in combining the two accounts. 3. It is always difficult to have an accurate estimate of the extent of damages suffered by a trade/businessman for b wrongful dishonour of cheque. Damages in such cases are therefore at large, meaning that the court can within reason award any such sum as it considers the circumstances of the breach on dishonour of a cheque warrant, c although there has been no proof of actual loss (i.e. damage) to the customer.

In the instant case, the respondent need do no more than d plead and establish that he was a businessman to be entitled to substantial damages. The lower court was therefore right in awarding him the sum awarded. Appeal dismissed. e

Cases referred to in the judgment

Nigerian f Adejuwon v. Co-operative Bank (1992) 3 N.W.L.R. (Part 228) 251 Balogun v. National Bank of Nigeria (1978) Vol. II N.S.C.C. g 133 British and French Bank v. Opaleye (1962) 1 S.C.N.L.R. 60; (1962) 1 All N.L.R. 26 h Ijebu-Ode Local Govt. v. Adedeji Balogun and Co Ltd (1991) 1 N.W.L.R. (Part 166) at 158 Shell BP v. Jammal Eng. Ltd (1974) 4 S.C. 23 i Counsel For the appellant: Ikwueto For the respondent: Emengo j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION)

Allied Bank of Nigeria Ltd v. Jonas Akubueze 367 a Judgment EJIWUNMI JCA: (Delivering the lead judgment) This action was commenced in the lower court, before Nweje J, where b the plaintiff in Suit no. 0/158/88 claimed from the defendant the sum of N1,000,000 (One Million Naira) as general/ exemplary damages for breach of contract. The breach of contract, according to the plaintiff, a trader and customer of c the bank, arose when the plaintiff’s cheque no. C/D ONS A21289 for the sum of N7,100 drawn on account no. 1028 was dishonoured when presented for payment at the bank by the person in whose favour it was issued. d Following the order for pleadings, the parties filed, exchanged and with the leave of court, amendments were made by the parties thereto in the course of the trial. During e the said trial, witnesses were called for both parties, and several documents were also admitted as exhibits. The facts of the case are deceptively simple and they would be related as pleaded and upon evidence led thereon. f The case for the plaintiff appears to be that sometime in 1984 he became a customer of the bank when he opened an account no. 1028 in the registered business name of the plaintiff. It is also in evidence that the plaintiff also opened g another account, designated no. 126 and operated in the business name of Joe Brown Commercial Agencies and which he claimed was run with two other persons. That account, it was also stated in evidence was used mainly for h effecting his international transactions, such as the payment of bills in foreign exchange for himself and his business partners abroad. On or about 13th June, 1986, the plaintiff issued his cheque no. C/D ONS A21289 in favour of one Dr. i Osita Aduba for the sum of N7,100 drawn on his account no. 1028. Upon the presentation of the cheque, exhibit A, at the bank, it was not paid, and it had inscribed on it the following: (a) “Re-present” (b) “Drawer’s attention required”. j Aggrieved, Dr. Osita Aduba went back to the plaintiff with [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 368 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the cheque. And on 17th June, 1986, they both went back to a the bank. The plaintiff being the customer went in to see the manager of the bank and was with him for some time. The outcome of the meeting could not have been favourable as b the cheque remained unpaid. Indeed, in the course of that meeting, the plaintiff was given a letter, exhibit B, and that apparently concluded their meeting. c The plaintiff was not satisfied with what was disclosed to him in exhibit B by the bank, he wrote a reply to it, wherein he disclosed that he was not the sole owner of account no. 126, and that the account had nothing to do with his account d no. 1028 and that, in any event, he had not authorised the bank to combine one with the other. And as the bank refused to honour his cheque on his account no. 1028, and indeed apparently refused any further transaction on that account e the plaintiff, as aforesaid, commenced this action. He claimed that before then, he had to dispose at a loss the goods in his supermarket, worth about N200,000 in order to meet the demands of his several creditors. f For the bank it is acknowledged that the plaintiff being its customer was operating with it the two accounts, nos. 126 and 1028. The bank’s case rest on the claim that the plaintiff was the sole operator of the two accounts, though the two g accounts stand in two registered business names: Joe Brown Commercial Agencies and New World Supermarket, respectively. It is also their case that account no. 126, which was used mainly by the plaintiff for foreign exchange transac- h tions was about the time of this incident in the red, as plaintiff was owing on that account the sum of N11,497.26. This arose from a loan of N3,000 granted to the plaintiff, and the several bills which the bank had to meet for the plaintiff in i that account. That when the plaintiff’s cheque drawn on his account no. 1028 for N7,100 was presented, it was returned and on it was inscribed the words: “Re-present”, and “Drawer’s Attention Required”. This was done in order to j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 369 a have the plaintiff reactivate his account no. 126 by the injec- tion of funds. It is agreed that though the account no. 1028 had sufficient funds to cover the amount of N7,100 on the b drawn cheque, it could not be paid, as the funds in the two accounts when combined could not be sufficient to make buoyant the plaintiff’s account with the bank. The bank claimed that by the agreement, exhibit O, signed by the c plaintiff when he obtained the loan of N3,000, the bank had the right to combine the two accounts held by the plaintiff with it to set off the credit in one with the debit in the other. With the conclusion of the evidence given by witnesses for d the parties, the court was addressed by their respective Counsel. The court thereafter adjourned to deliver a considered judgment. By that judgment the learned trial Judge upheld the claim of the plaintiff and awarded him as dam- e ages the sum of N72,000 only, with costs in the sum of N2,000. Being very dissatisfied with that judgment and the order made thereon, the bank has appealed to this Court. Pursuant f thereto, the bank, now appellant, filed a notice of appeal, which was later amended with the leave of this Court. By that amended notice of appeal, the appellant is challenging the judgment of the lower court upon five grounds of appeal. g The appellant consequently filed the appellant’s brief in which the issues identified for the determination of this appeal were properly predicated upon the grounds of appeal in the notice of appeal. It is therefore not necessary at this h stage to reproduce the grounds of appeal filed in this appeal. Upon being served with the appellant’s brief, the plaintiff who shall henceforth be referred to as the respondent, also filed and served the respondent’s brief. At the hearing before i us the brief so filed was adopted by the learned Counsel for the parties who also made further remarks on the arguments in their respective briefs. For the appellants, its learned Counsel, Ikwueto, Esq., referred us to the case of A.C.B. v. j Nwadiogbu (1994) 7 N.W.L.R. (Part 356) 330 and Mr [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 370 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Emengo, Counsel for the respondent, emphasised the ab- a sence of notice before the respondent’s cheque had been dishonoured. In the appellant’s brief, three issues were identified for the determination of this appeal and they read:– b “(a) Whether the trial before the learned trial court was affected by lack of fair hearing, that is to say, whether the learned trial court dispassionately considered the case before it as presented by the parties. c (b) Whether the appellant was entitled in the circumstances of this case to exercise a right of set off and whether the trial court was right in refusing to consider the legal effect of a customer who maintains two current accounts with a bank and one of the accounts is in credit balance whereas the d other is in debit balance. (c) Whether the award of N72,000 damages made by the trial court was supported by the evidence before the court and authorised by law.” e In the respondent’s brief, the following issues were raised for the determination of the appeal:– “3.01 Whether upon a proper construction of exhibit O against the back ground that it was made pursuant to exhibit N af- f forded the appellant any defence whatsoever and whether the Judge was wrong in disregarding any defence placed on it. 3.02 Whether the appellant was denied a right of fair hearing. g 3.03 Whether the Court below was wrong when it disregarded the contention that attention of drawer required did not amount to dishonour of the same when the appellant refused to pay the cheque. 3.04 Whether the Court below misapprehended the burden of h proof. 3.05. Whether the award is excessive.” After due examination of the issues set out above by the parties from their respective briefs, it seems to me that the i issues are the same, though differently worded and para- graphed. I would therefore, subject to what I consider to be the principal issue raised in this appeal, will be considered in the light of the issues set down in the appellant’s brief. But j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 371 a before doing so, I wish to refer to the cross-appeal filed by the respondent. By the grounds of appeal so filed, it does appear that the respondent complained that the sum awarded b as damages was not adequate. But it is noticed that he has not pursued this complaint in the respondent’s brief, nor has he filed a separate brief for that purpose. In my view the issue raised in the respondent’s brief and the argument c thereon, can only be regarded as the response to the contention of the appellant, that the damages awarded to the respondent is excessive or indeed unwarranted having regard to the evidence and the state of the law. I will therefore for the reasons given above deem it that the respondent has d abandoned his cross-appeal. It is therefore struck out accordingly. I will now revert to the consideration of the first issue e raised in the appellant’s brief. By this issue the appellant complains that the learned trial Judge failed to dispassionately consider its defence. In particular, the learned trial Judge, it is claimed, completely ignored the case as pre- f sented by the appellant thus denying a fair hearing to the appellant, the gravamen of the complaint of the appellant being exhibit O. This document is that which the appellant placed for the right to set off the respondent’s account no. 1028, which was in credit with account no. 126, which was g alleged to be in debit at the material time. The appellant felt that the learned trial Judge on this issue having held that exhibit O, is the contestatio litis between the parties, and had properly observed that “That document (exhibit O) has now h become the main bulwark of the defence” later fell into error when he said thus:– “I see this exhibit O as entirely foreign to the intendments portrayed by exhibit N on which it purports to be based. That docu- i ment, although signed by the respondent ‘as he said without reading’ strikes me as a clever manoeuvre by the appellant to put things over the unwitting respondent.” The learned Counsel for the appellant then went on to argue j in the appellant’s brief that in the absence of any evidence [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 372 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. before the court that exhibit O was a clever manoeuvre, the a Judge was wrong to have raised such inference on exhibit O, when he said thus:– “I cannot by any stretch of reasoning, think that this printed for- b mat, obviously supplied by the bank (appellant) and which the (respondent never read when he signed it has converted the temporary overdraft for 3 months into a permanent bond that has to trail the (respondent) forever.” c For the appellant it is contended that the observation made on exhibit O has to be wrong. This, it is argued, is because, though exhibit N was an application for a temporary overdraft for N3,000 payable before 15th April, 1987 evidence at d the trial showed that the sum remained unpaid until exhibit A was drawn by the respondent. The appellant has therefore argued in this Court that the learned trial Judge had no right to decide the case of the parties before it by what the court e thought may be the position in controversy in complete disregard of the evidence adduced by the parties. For this proposition reference was made to the following cases: Lim Poh Choo v. Camden and Islington Area Health Authority f (1979) All E.R. 910 at 914; Sonnar Nig. Ltd and another v. Nordwind and another (1987) 4 N.W.L.R. (Part 66) 520 at 535; Yakassai v. Incar Motors Nig. Ltd (1975) 1 All N.L.R. (Part 1) 287; Okoye v. Kpajie (1973) N.M.L.R. 84; Ejow- g homu v. Edok Ekter Mandilas Ltd (1986) 5 N.W.L.R. (Part 39) 1; Brown v. Adebanjo (1986) 1 N.W.L.R. (Part 16) 383. It is also upon the premise of the above authorities that the appellant contends that the respondent failed to join any h issue with the appellant on the allegation of the appellant that the account no. 126 was in debit balance as at June 1986. Rather he admitted that he was aware of the debit in his account no. 126 in 1986. For the appellant, it is contended that the only point on which respondent joined issue i with the appellant was that the appellant was not entitled to combine his account no. 126 with account no. 1028 and was also enjoined to inform him about the position of his account before dishonouring his cheque. Upon the state of j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 373 a the pleadings and the evidence of DW1 and DW2 on the indebtedness of the respondent with respect to account no. 126, the learned trial Judge was wrong to have held that it b “would require someone sitting quietly and with calculators and other aids and calmly going through the defendant’s (bank’s) books, perhaps with the plaintiff in attendance, before anyone can say for certain that the plaintiff owes or c does not owe that account no. 126”. For the submission that the appellant was denied a fair hearing as enshrined in section 33(1) of the 1979 Constitu- tion, the cases cited were Ukpai v. Okoro (1983) 2 S.C.N.L. d 380; Onifade v. Olayiwola and others (1990) 7 N.W.L.R. (Part 161) 130 at 165; Ariori v. Elemo (1983) 1 S.C.N.L.R. 1; (1983) 1 S.C. 13 at 23–24; Chief Princewill v. Mallam Usman (1990) 5 N.W.L.R. (Part 150) 274 at 284. The e learned Counsel for the appellant has therefore urged that the issue be upheld in favour of the appellant as the trial court had been shown to have completely disregarded the evidence, and determined the issues before it upon facts not pleaded and evidence which was not made available to it by f any of the parties to the action. On this issue, the learned Counsel for the respondent in the respondent’s brief differed from the contention of the appel- g lant by arguing thus: In the first place there is no evidence in the printed record that the overdraft in the sum of N3,000 was not fully paid back before 15th April, 1982 as stated by the respondent in exhibit N. With regard to exhibit O, executed by the respondent upon the grant of the loan to him by h the appellant, he contends that the learned trial Judge was right to have held that exhibit O was written pursuant to exhibit N. And though his argument following the contention was not clearly made out at page 6 of the respondent’s i brief, it does seem to me, however, that his further contention is that exhibit O by its intendment is limited to exhibit N. It cannot therefore be employed to justify the subsequent action of the appellant to combine the two accounts held by j the respondent with the appellant. In any event it is further [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 374 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. argued that the findings of fact made by the learned trial a Judge that exhibit O was made contingent only upon exhibit N has not been challenged in this appeal. What has been challenged is the conclusion of the Judge that he would b disregard any defence that is placed on exhibit O. It is therefore his submission that the appellant, having not appealed against those findings of fact, he cannot be heard on that aspect of the appeal. An omnibus ground of appeal cannot c even avail the appellant in the circumstances (vide Ndiwe v. Okocha (1992) 7 N.W.L.R. (Part 252) 129). However, the learned Counsel for the respondent, arguing in the alternative upon the assumption that the appellant d could avail itself of exhibit O to exercise a lien or set-off in respect of the respondent’s account no. 1028, then submitted that this the appellant could not do without prior notice to the respondents. For that submission, reference was made to e the following authorities: British and French Bank Ltd v. Opaleye (1962) 1 S.C.N.L.R. 60; (1962) 1 All N.L.R. (Part 1) 26, Adejuwon v. Co-operative Bank (1992) 3 N.W.L.R. (Part 228) 251; Ogundeji v. IBWA (1993) 2 N.W.L.R. (Part f 278) 690. Learned Counsel then invited attention to the evidence on record to contend that as it is clear that it was in exhibit B given to the respondent when he went to complain about his dishonoured cheque that he was first notified that g his accounts had been combined. And also that the appellant had exercised its right of set-off. It is also contended for the respondent that the finding of the learned trial Judge that exhibit B constitutes the first notice to the respondent as h stated above should remain undisturbed. This, it is argued, is because the appellant has not again appealed against that finding of fact (NIDB Ltd v. S.S. Drink Ltd (1992) 5 N.W.L.R. (Part 242) 471). Apart from that contention, he also refers to the general principle that a Court of Appeal i should be slow to reverse the findings of fact of a trial court that had the opportunity of seeing and hearing the witnesses at the trial (see Omoregie v. Idugiemwanye (1985) 2 N.W.L.R. (Part 5) 41 at 42; Anyanwu v. Mbara (1992) 5 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 375 a N.W.L.R. (Part 242) 386; Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372). Another point militating against the success of the appeal, b in the view of the learned Counsel for the respondent, is that the appellant failed or neglected to establish the exact indebtedness of the respondent in respect of his account no. 126. On that point, it is argued for the respondent that the c onus lies on the appellant in order to justifiably exercise its alleged right to combine the two current accounts of the respondent. It is therefore submitted for the respondent that the appeal on this issue should fail and be dismissed. d From a careful reading of the pleadings, the evidence on record, and the judgment of the lower court, it seems clear that the main issues for determination in this appeal is whether the lower court was right to have held that appellant e had no right to have combined the two accounts of the respondent with it. Or as it is argued, to set off the account no. 1028 which was in credit at the material time with account no. 126 which was in debit. It must also be noted that the f appellant’s justification for combining the accounts lies in exhibit O, being the agreement signed by the respondent following the grant of the overdraft facility of N3,000 granted to him by the appellant upon the application, exhibit g N, made to that effect by the respondent. After I shall have considered the various judicial dicta on the main issue stated, I will then consider whether this argument avails the appellant. h Now as to whether a bank has a right to combine two accounts of a customer in the same bank, I wish to refer to the following cases where our courts have made pronouncements thereon. They are (1) British and French Bank v. i Opaleye (1962) 1 S.C.N.L.R. 60; (1962) 1 All N.L.R. 26. Mr Opaleye, the customer had two accounts at the bank, one in his own name, and another in the name of Fekemo Brothers, of which he was the sole account holder, and which will be j referred to as the firm’s account. The firm’s account was [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 376 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. overdrawn to the extent of £500 and when a cheque of £350 a was paid into the private account, the bank decided to utilise money from the private account in order to reduce the overdraft in the firm’s account and told the customer that he b could not draw on his private account. The point which then had to be determined is whether the bank was entitled to combine the two accounts without notice and without consent of the customer. The learned Ag. Chief Magistrate c thought not, and the learned Chief Justice thought not also. The bank appealed to the Federal Supreme Court on the argument that that was a mistake in law (coram Ademola CJR, Tailor and Bairamian FJJ). In the course of delivering d his judgment Bairamian FJ considered the following cases pertinent to the question before the court: Garnett v. M’Kewan (1872) L.R. 8 Ex 10; Greenhalgh (WP) and Sons v. Union Bank of Manchester (1924) 2 K.B. 153; Bucking- ham and Co v. London and Midland Bank Ltd (1895) 12 e T.L.R. 70. Also his Lordship referred to the Statement of Law given in Volume 2 of Halsbury’s Laws of England (3ed) page 172 paragraph 322 which reads:– f “Combination of different accounts. Unless precluded by agreement, express or implied, from the course of business, the bank is entitled to combine different accounts kept by the Customer in his own right, even though at different branches of the same bank, and to treat the balance, if any, as the only amount really standing to g his credit.” His Lordship next quoted with approval at 29 the dictum of Swift J in the Greenhalgh case (supra) at 164:– h “If a banker agrees with his customer to open two or more accounts he has not, in my opinion, without the assent of the customer, the right to move either assets or liabilities from the one account to the other, the very basis of his agreement with his customer is that the two accounts shall be kept separate, and if the i customer pays bill drawn upon him not into his general account, where they will be discounted and he will receive the benefit of being able to draw against them, but into an account in which they will only be used either to pay bills accepted by the bank or bills drawn by the customer which they are specifically to meet, I do j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 377 a not think a banker, any more than any other individual, can change them from the one account into the other without the customer’s assent. On this point it seems to me that the only question to be decided is, what is the agreement between the banker and the cus- b tomer? And if that agreement is, as I find it to be in this case, that there shall be a general account into which bills are paid as cash and that there shall be an account into which bills shall be paid for some purpose, bills or their proceeds cannot be moved from one c account to the other at the whim of the banker without the consent, express or implied of the customer.” Thereafter, his Lordship observed thus at 29–30 of his judgment:– d “It turns out to be a question of the agreement between the customer and the bank. Apparently, as one may infer from the opening part of that passage, the agreement to keep the two accounts distinct and separate is inherent in the fact that the banker has e agreed with his customer to open two or more accounts. If the bank may merge them without notice, one can see that it may do him great harm. Suppose, for example, that the customer has a private account and a business account; that the business account is in funds, but the other is in debit; the customer, not knowing f what the bank has done or will do, gives out cheques on his business account to pay trade debts, say for goods bought; if the bank does not honour them on presentation, it will do him harm. That is illustrated in Buckingham and Co v. London and Midland Bank Ltd (supra). There the customer had a loan account relating to a g secured advance, and a current account; the bank thought that the security was inadequate and transferred the loan account to the current account, with the result that cheques given on the current account were not honoured by the bank. The bank called evidence of managers of banks for the custom entitling a bank to close an h account without any obligation to give notice. The learned trial Judge, Matthew, J, left these questions to the jury:– ‘(1) Was it the course of dealing between the plaintiff and defendants that plaintiff was to be allowed to draw upon i his open account? (2) If yes, then was the plaintiff entitled to a reasonable notice that that course of business would be discontinued? j (3) Was such a reasonable notice given?’ [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 378 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The jury answered (1) and (2) in the affirmative and (3) in the a negative, and awarded damages. The dominant point in the case is the importance attached to the course of business between the customer and the bank.” b Before disallowing the appeal Bairamian FJ then said at 31 thus:– “I have dealt with this case as if it were quite like the English case which I have cited from Halsbury, under the above statement of the law. I should, however, note that in those cases the accounts c were in the same name, though one account was called the loan account, or, in the Greenhalgh case, the provisional bill account and the general account. In the case in hand, one account is in the name of Opaleye, Rafiu Afolabi Bello, and the other account is in the name of Fakemo Brothers, and I think it can be said with jus- d tice that that very strongly implied an agreement to keep them separate and distinct, without any right on the part of the bank to combine them or to transfer assets from one account to the other, at any rate not without reasonable notice of the intention so to do.” e In Oloyede Adejuwon and another v. Co-operative Bank (1992) 3 N.W.L.R. (Part 228) 251, upon facts which are not dissimilar to those in Opaleye’s case (supra), the Court of Appeal, Benin, applied the principles enunciated in the f Opaleye case (supra), and that court held that, if a banker agrees with his customer to open two or more accounts, he has not without the consent of the customer any right to move either assets or liabilities from one account to the g other, the very basis of his agreement with his customer being that the two accounts shall be kept separate. It was further held in that case that there are in existence two separate accounts in operation by the appellant with the respon- h dent bank. The first account was in the name of the second appellant, Ositu Brothers Ltd, Akure, and the other was in the name of Oloyede Adejuwon, the first appellant. In the circumstances the respondent had no right to have transferred the assets in the savings account standing in the name i of Oloyede Adejuwon, the first appellant, to the current account of the second appellant, Ositu Brothers Ltd, without the consent of the first appellant, as the two accounts were separate accounts and held by different persons. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 379 a It follows from the authorities reviewed above, that our courts have adhered to and followed in these types of cases the principles enunciated in British and French Bank v. b Opaleye (supra), which are set out at 26 of the judgment thus:– “(i) In the absence of an expressed agreement, an agreement regulating the relationship of banker and customer is im- c plied from the course of business between them. (ii) Where a banker opens two accounts with a customer, one in the customer’s own name and the other in a business name, there is, in the absence of any express agreement to the contrary, an implied agreement that the accounts are to be kept d distinct and separate. (iii) Where by agreement, express or implied, a customer’s several accounts with a banker are to be kept distinct and separate, the banker has no right to combine them or to e transfer assets or liabilities from one account to another, without reasonable notice of the intention so to do, or without the assent of the customer.” I now revert to the appeal in hand, the facts of which I have f reviewed above. Applying the principles enunciated above, there can be no doubt that the respondent operated two separate accounts with the bank. These were account no. 1028, New World Supermarket, and account no. 126, Joe Brown g Agencies, and the respondent was the sole signatory of the two accounts. However, it seems clear from the facts that these two accounts were separate and distinct from one another and they were operated as such by the customer and the bank since the accounts had been opened. It follows h upon the principles enunciated above that these two accounts could be combined only with the consent of the respondent or if reasonable notice so to do have been given to the respondent. The respondent said, and the lower court i believed him, that he neither gave his consent to the act of the appellant combining the two accounts, nor was he given any notice to that effect. He indeed said and that was accepted by the lower court that the only notice he received in j that connection was exhibit B. And that was given to him on [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 380 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the date he went to complain as to why his cheque issued to a one Dr. Osita Aduba was “referred to drawer”. Upon those facts the learned trial Judge then held that the appellant had no right to have combined the two accounts of b the respondent in the circumstances. But in his argument before us, learned Counsel for the appellant has argued that that conclusion of the lower court is perverse. His contention being that exhibit O, and which the c learned Judge was said to have ignored in his judgment, provided the appellant with the necessary right to combine the two accounts. In the first place, let me say straightaway that it is not right for the appellant to argue that the lower d court did not consider exhibit O in the course of his judgment. I am satisfied upon reading the judgment that the learned trial Judge duly considered exhibit O, though he concluded that the said exhibit O has no nexus with the act e of the appellant in combining the two accounts. In effect the learned trial Judge took the view that exhibit O is of no avail to the appellant in the circumstances. I therefore need to consider whether the learned trial Judge was right for so f holding. Exhibit O, as I have said before, was signed by the respondent when he was granted a loan of N3,000 in respect of his account no. 126. For a clearer view of exhibit O, it is reproduced hereunder:– g “LETTER OF AGREEMENT FOR ADVANCE ACCOUNTS TO:– The Bank of India (Nigeria) Limited, 5th January, 1982 h Dear Sirs, With reference to my/our application for the grant of a loan/overdraft in current account I/we hereby acknowledge and declare that in consideration of your granting me/us a loan/ i overdraft in current account I/we agree to the following terms and conditions: The amount of the advance to be made by the bank to me/us under this contract will be subject to the bank’s sole and absolute discretion but will not in any event exceed N3,000 . . . j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 381 a 9. You are entitled to consider that all accounts opened to in my/our name with your bank, including any accounts in foreign currency, constitute a single combined current account, all debit and credit balances off setting each other, b and the benefit of the guarantees particularly ear-marked to each item of this current account shall remain assigned to secure the balance of the said combined account without any novation being opposed by third parties. c . . . Yours faithfully, (Sgd) JOE BROWN COMMERCIAL AGENCIES d NO. 13 BASDEN STR. FEGGE ONITSHA” For this purpose, I think that the operative clause on which the appellant may have been placing reliance is the very last e paragraph, that is, paragraph 9 of the document. In that paragraph it is stated that: “You are entitled to consider that all accounts opened in my/our name with your bank, including any accounts in foreign currency, constitute a single f combined current account . . .” It seems that a plain reading of that clause envisages that all accounts which may be combined into a single current account must be those opened in the name of the customer, in the context of this case the g account in question was opened in respect of Joe Brown Commercial Agencies and the only other account which may be combined with that account has to be such accounts as are opened in the name of Joe Brown Commercial Agen- cies. With that view of the construction, of that clause, I am h in full agreement with the learned trial Judge of the lower court that the document, exhibit O, does not avail the appellant. It follows therefore that I must uphold the view of the lower court that the appellant had no right to have combined i the two accounts held by the respondent without obtaining his prior consent. Or the other alternative that was open to the appellant was to give reasonable notice to him that it intended so to do. The appellant had no legal right in the j circumstances to block the respondent’s account no. 1028. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 382 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

It must follow that the appellant was properly found to a have wrongly dishonoured the respondent’s cheque which was properly drawn on his account no. 1028. Having done so, it is now argued that the damages awarded to the respon- b dent was preposterous. The principles governing the award of damages in this kind of cases have been stated and restated in several decisions of this Court and the Supreme Court. But in this connection, I will refer to the case of Ba- c logun v. National Bank of Nigeria (1978) Volume II N.S.C.C. 133. In this case, the question before the court was whether the appellant, a practicing solicitor, was entitled to substantial damages for the dishonour of her cheque by the d respondent without any allegation, in her pleadings of special or actual damage flowing from such dishonour of the cheque and proof of the same. Idigbe JSC, delivering the judgment of the court, analysed in his Lordship’s impecca- e ble way the principles governing the award of damages where the matter arose when a party claimed that his cheque was unlawfully dishonoured:– “We think it is necessary, at this stage, to trace the history of this f aspect of the law relating to damages for breach of contract. The role of predominating business of bankers is the business of banking which consists in the main, in 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 see also Atkin, L.J. g in Joachimson v. Swiss Bank Corporation (1922) 3 K.B. 110 at 127. Therefore, the receipt of money from or an account of his customer by a banker constitutes the latter the debtor of the former (Foley v. Hill (1848) 2 HI. Cas 28); and the banker undertakes to h pay any part of the money thus due from him to the customer against the written orders of the customer. Joachimson v. Swiss Bank Corporation (supra). Accordingly, the relation so constituted is that of principal and agent and, therefore, a cheque drawn on the banker by the customer represents the order of the Principal to his i agent to pay, out of the Principal’s money in his hands, the amount stated on the cheque to the payee endorsed on the cheque. There- fore, it has long been established that refusal by a banker to pay a customer’s cheque when he holds in hand an amount, equivalent to that endorsed on the cheque, belonging to the customer amounts to j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 383 a a breach of contract for which the banker is liable in damages. The only question which arose, in these circumstances, has always been that relating to the quantum or amount of damages. The general rule for the measuring or quantifying [of] damages for breach b of contract was that established by the leading case of Hadley v. Baxendale (1854) 9 Exch. 341 which is that the party in breach is liable in damages in the amount which flows directly and naturally from his failure to keep his own part of the contract or bargain c provided that such damages could reasonably have been within the contemplation of the parties at the time when the contract was made, but it rarely happens that a banker knows the circumstances under which a customer has had to issue a cheque which he refused to honour and this makes it very difficult to apply the rule in d Baxendale (supra) in measuring damages in those circumstances. It is on this account that damages awarded for wrongful dishonour of cheques by a banker are generally nominal, save in the instances which the law has come to regard as exceptional; and these constitute the exceptions with which we will deal anon. Direct e and/or natural damages arising from a breach of contract by a banker to honour the cheque of his customer apart, there is however, also the serious likelihood of a considerable danger to the reputation of a customer and generally to his business (if he – the f customer – is engaged in business). People generally, whether or not in business, do not deal with a person whose cheques are not paid, although it is conceded that instances of disinclination to deal with such a person more readily abound in the field of business. As it is always extremely difficult to have an accurate estimate of g the extent of damage under this ‘head’ it has, therefore, been laid down by a long line of cases beginning with that of Marzetti v. Williams (1830) 1 B and Ad 415 that damages in such cases are ‘at large’, which is to say that in such cases a jury may within reason make an award of any such sum as they consider the circum- h stances of the breach of contract or dishonour of cheque warrant, although there has been no proof of any actual loss (i.e. damage) to the customer. In the case of Marzetti (supra) in which a trader sued his bankers for wrongful dishonour of [a] cheque although i there was no evidence to show that the plaintiff had sustained any injury from the banker’s mistake, Lord Tenterden C.J. remarked:– ‘I cannot forbear to observe that it is a discredit to a person and therefore injurious in fact, to have a draft refused payment for so small a sum, for it shows that the banker j had very little confidence in the customer. It is an act [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA 384 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

particularly calculated to be injurious to a person in trade’ a (See 109) E.R. 842: and (1830) 111 Ald 415 at 424). Marzetti’s case (supra) was followed in the case of Rolin v. Stew- ard (1854) 14 C.B. 595 which was a case by the plaintiffs who b were in business (they were in fact merchants and shipowners) against the defendant, a public officer of a company carrying on the trade and business of bankers in England under the name and style of East of England Bank. The action was for dishonour of three cheques and a dominile bill due to the inadvertence of a clerk c in the office of the bankers. The plaintiffs gave no evidence that they actually suffered injury. A jury awarded them £500. It was held that the jury were entitled to give substantial damages, though £500 was, in the circumstances, excessive; £200 was eventually d agreed upon. The case of Marzetti (supra) therefore, put it beyond doubt that where a banker without justification dishonours his customer’s cheque, he is liable to the customer in damages for injury to his credit, and the case of Rolin v. Steward makes it clear that if the customer is also in trade . . .” e See also Shell B.P. v. Jammal Engineering Ltd (1974) 4 S.C. 23, (1974) 1 All N.L.R. (Part 1) 542; Ijebu-Ode Local Gov- ernment v. Adedeji Balogun and Co Ltd (1991) 1 N.W.L.R. (Part 166) at 158. f The respondent duly established in the case in hand that he was a businessman, and was the owner of a Supermarket worth N200,000 at the time of the incident. And as a result g of the closure of his accounts he had to wind up the business to satisfy his credit customers. Indeed, he need not do no more than plead and establish that he was a businessman to be entitled to damages as explained above. In Balogun’s h case (supra) Mrs Balogun, the appellant in the case, was in the Supreme Court awarded the sum of N1,000 damages, as against the sum of N10 awarded by the lower court. A mul- tiplier effect of 100 as the Supreme Court held that that award should not have been based on the principles that she i was only entitled to nominal damages. This is because the Supreme Court took the view, and rightly too, that a solicitor who is in practice should be regarded as a “person in business”. In this case, there can be no doubt that the learned j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, ENUGU DIVISION) Ejiwunmi JCA Allied Bank of Nigeria Ltd v. Jonas Akubueze 385 a trial Judge of the lower court correctly took the view that the respondent was entitled to substantial damages for the loss suffered by him. And for that reason, the respondent was b awarded the sum of N72,000. In making that award the lower court did not of course refer to the Balogun case (supra) but thought that making the award of N72,000 as damages to the respondent would meet the justice of the case. c Now having considered the Balogun case (supra) and noted that the Supreme Court in that case gave damages for N1,000 as against the N10 awarded in the lower court, I think that the award of N72,000 is not unreasonable in this case. I therefore uphold the award of N72,000 made in fa- d vour of the respondent. In the result, this appeal is dismissed in its entirety. The judgment and orders of the lower court are affirmed. The respondent is awarded costs in the sum of N1,500 only. e ACHIKE JCA: I have had the preview of the judgment just delivered by my learned brother, Ejiwunmi JCA. There is no substance in the appeal. It deserves to fail. Accordingly. I f dismiss it with N1,500 costs in favour of the respondent. TOBI JCA: I agree. Appeal dismissed [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

386 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a Bank of the North Limited v. Lake Chad Research Institute b COURT OF APPEAL, JOS DIVISION MUHAMMAD, MUSDAPHER, OKEZIE JJCA Date of Judgment: 10 APRIL 1995 Suit No.: CA/255/92

Banking – Bill of exchange – Effect of forged signature on c bill Banking – Forged cheque – Banker honouring forged cheque – Whether entitled to debit his customer’s account with money so paid d Facts The respondent was a customer of the appellant at its branch in Maiduguri. At all material times there was a credit in the e respondent’s account. The appellant paid out two forged cheques from the respondent’s account to unauthorised persons negligently. The trial Judge found the cheques were forgery and the f appellants were negligent. The appellant appealed. Held – A document in cheque form to which the customer’s name g as drawer is forged or placed therein without authority is not a cheque but a mere nullity and, unless the banker can establish adoption or estoppel, he cannot debit the customer with any payment made on it. The forged cheques were in the h instant mere nullities and the appellant was not entitled to debit the respondent unless the appellant could establish adoption or estoppel. Appeal dismissed. i Cases referred to in the judgment Nigerian Atoyebi v. Odudu (1990) 6 N.W.L.R. (Part 157) 384 at 401 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

Bank of the North Ltd v. Lake Chad Research Institute 387 a Habib (Nig.) Bank Ltd v. Koya (1992) 7 N.W.L.R. (Part 251) 43 Ige v. Amakiri (1976) 11 S.C. 1 at 12–13 b Kate Enterprises Ltd v. Daewoo Nig. Ltd (1985) 2 N.W.L.R. (Part 5) 116 Olale v. Ekwelendu (1989) 4 N.W.L.R. (Part 115) 326 c Nigerian statute referred to in the judgment Bills of Exchange Act (Cap 21) Volume I Laws of the Fed- eration of Nigeria, 1958, sections 24, 60, 90 d Books referred to in the judgment Chalmers on Bills of Exchange (13ed) page 24 Halsbury’s Laws of England (4ed) Volume 3 e Counsel For the appellant: Nggilari For the respondent: Airadion f Judgment MUHAMMED JCA: (Delivering the lead judgment) The respondent herein who was the plaintiff at the court below g sued the appellant in the Maiduguri High Court claiming as follows:– “. . . The said sum of N75,270.50 with interest of 10% from the defendant from the date the said amount was negligently paid out h till judgment was given with the costs of this suit.” The appellant, who was the defendant in the lower court, denied the claim. Pleadings were ordered, filed and exchanged. i The facts of the case were that the respondent was a customer of the appellant at the appellant’s branch office in Maiduguri. Here the respondent maintained a current account no. 503424. At all times material to this action there j was a credit of well over N80,000 in the respondent’s [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA 388 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. account. It was alleged that the appellant on 3rd and 23rd a February, 1981 negligently paid two forged cheques totalling N75,270.50 from the respondent’s account to unauthorised persons. The appellant in its statement of claim denied b being negligent and contended that it paid the cheques in good faith and in the ordinary course of business and that at the trial the appellant would rely on the Bills of Exchange Act and all available legal and equitable defences. c At the hearing of this case, the respondent called three witnesses who testified on its behalf. One of the witnesses is a police officer who is a handwriting expert. The appellant called only one witness. After the Counsel for both parties d have addressed the court the matter was reserved for judgment. In his judgment, the learned trial Judge Kolo CJ, after reviewing the evidence adduced and considering the submission of Counsel, stated:– e “I think it is correct to state that the main issue for determination before the court is whether the two cheques drawn on the defendants against the accounts of the plaintiffs maintained by the defendants and encashed by Shehu Muhammad and Usman f Muhammad are forged. The defendants, apparently are not prepared to admit without any reservation that the two cheques now marked exhibits A1 and A2 are forged.” After reviewing the evidence, he came to the conclusion that g the cheques were forged. This is what he said:– “So having taken the evidence of the three plaintiff’s witnesses along with exhibit 6, the report of the handwriting expert I find it as a fact that the two cheques marked exhibits A1 and A2 as well h as the introduction letter marked exhibit 2 are forged documents.” The Learned Chief Judge then considered the provisions of sections 3(1), 24, 73 and 90 of the Bills of Exchange Act, 1958 and the conduct of the cashier who paid the cheques. i He found that the cashier did not act diligently for had he acted diligently he would have found that something was fishy. He said that the cashier ought not to have paid out the money on the presentation of the first cheque without first j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA Bank of the North Ltd v. Lake Chad Research Institute 389 a being satisfied that the signature was genuine. The Learned Chief Judge then concluded thus:– “There is need for paying cashier to be extra vigilant and there is b no evidence before this Court that the cashier in question was vigilant and this being the case I do not think the defence of acting in good faith is open to the defendants. They did not discharge their duties diligently and so they have no valid defence to this action. They must therefore bear the loss. I hereby accordingly enter c judgment for the plaintiff in the sum of N75,270.50 with costs assessed at N1,000.” Dissatisfied with the judgment, the appellant appealed to this Court on the following grounds, which I have reproduced d below without particulars:– “(1) Having regards to the joinder of issues between the parties on the pleadings and the evidence led in respect thereof as to the negligence or otherwise of the defendant, the learned e trial Judge erred in law in resolving the issue in favour of the plaintiff without first evaluating and rejecting the evidence adduced by the defence thereby occasioning a miscarriage of justice. f (2) The learned trial Judge erred in law in failing to hold that section 150 of the Evidence Act availed the defendant. (3) The trial court erred in law by entering judgment for the plaintiff for the whole sum of N75,270.50. g (4) The learned trial Judge misdirected himself when he found: ‘I think it is correct to state that the main issue for the determination before the court is whether the two cheques drawn on the defendant’s against the accounts of the plaintiff maintained by the defendant and encashed by Shehu h Muhammad and Usman Muhammad are forged’ and this misdirection occasioned failure of justice. (5) The trial court erred in law by his finding that: ‘I do not think the defence of acting in good faith is open to the de- i fendant.’” Briefs of argument were filed on behalf of the parties. In the appellant’s brief two issues were identified for determination in the appeal. The respondent also formulated two issues for j determination. The issues formulated by the respondent are [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA 390 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. substantially the same as those formulated by the appellant. I a will therefore adopt the issues identified by the appellant as the real issues for the determination of the appeal. The issues are:– b “(1) Whether or not upon a proper appraisal of the facts and the evidence led before the trial court and in particular to the application of the provisions of section 150 of the Evidence Act upon which no finding was made by the learned trial c Judge, it can be said that the respondent as plaintiff made out a case against the appellant. (2) Whether or not a trial Judge is allowed by law to make out a case different from that pleaded by the parties.” d At the hearing of the appeal Counsel on behalf of their respective clients adopted and relied on their briefs of argument. In addition, they also made oral submissions in elucidation or elaboration of their respective briefs. e It was submitted on behalf of the appellants that the trial Judge failed to properly evaluate the facts and evidence adduced before him in relation to the respondent’s claim with the result that his judgment and the consideration lead- f ing to same were predicated on matters which were wholly irrelevant to the determination of the issues before him. It was also submitted that there were some salient facts which were not in dispute and having regard to these salient facts, g it is the appellant’s submission that the respondent, having failed to prove the absence of any breach of duty of care on the part of the appellant, the respondent’s claim in negligence should have been dismissed. h It was also submitted that from the totality of the respondent’s conduct, it was guilty of contributory negligence which was enough to absolve the appellant from any liability. It was further submitted that the appellant could not have i refused honouring the cheques as that would be a drawback in its banker–customer relationship with the respondent. It was submitted that, had the trial Judge adverted his mind to this issue, his finding would have been different having j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA Bank of the North Ltd v. Lake Chad Research Institute 391 a regards to the provision of section 150 of the Evidence Act which the learned trial Judge refused to make a finding on despite the fact that same was raised by the appellant as a b defence (Joe Ige v. Ezekiel Amakiri (1976) 11 S.C. 1 at 12– 13). On the second issue it was submitted that the respondent’s claim was founded on negligence and not on whether or not c exhibits A1 and A2 were forged. It was submitted that the duty of the trial Judge was to adjudicate on the negligence alleged and no more (see Atoyebi v. Odudu (1990) 6 N.W.L.R. (Part 157) 384 at 401 and Olale v. Ekelendu d (1989) 4 N.W.L.R. (Part 115) 326 at 360). It was submitted that the trial Judge was wrong when he stated that the only issue for determination was whether the e two cheques drawn on the defendants were forged, because it was speculative. We were urged to allow the appeal, set aside the judgment of the lower court and in its stead dismiss the respondent’s f claim before the lower court in its entirety. On the other hand, it was submitted on behalf of the respondent that the trial Judge made a succinct and detailed appraisal of the evidence given by both parties in his consid- g eration of the case put up by both parties and that the Judge was right in stating that the main issue for determination was whether the two cheques were forged. It was also submitted that the evidence adduced by the appellant did not in any h way challenge the evidence adduced by the respondent and that the evidence not challenged is deemed admitted as held in Habib (Nig.) Bank Ltd v. Koya (1992) 7 N.W.L.R. (Part 251) 43 at 59. It was also submitted that the evidence of the i only witness called by the appellant was hearsay evidence and that the evidence of the appellant’s witness could not be covered by the decision in Kate Enterprises Ltd v. Daewoo Nig. Ltd (1985) 2 N.W.L.R. (Part 5) 116 at 118. It was fur- j ther submitted that the duty of care on a banker relating to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA 392 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. its customer is presumed and that it was not normal course a of a bank’s business to pay out a cheque without verifying the signature on it. It was submitted that there was sufficient evidence before the lower court establishing the relationship b between the appellant and the respondent and that the appellant owed the respondent a duty of care. On the issue of contributory negligence, it was submitted that, since this issue was neither raised nor proved at the c lower court, the appellant could not raise the issue before this Court. Therefore, all arguments pertaining to contributory negligence should be disregarded. It was also submitted that the failure of the appellant to verify the signatures on d exhibits A1 and A2 before paying out the amount on the cheques supported the respondent’s contention that the appellant was grossly negligent in paying the two cheques to unauthorised persons. In the absence of any evidence from e the appellant as regards the circumstances the two cheques were paid, the defence of acting in good faith was not established or proved and that section 150 of the Evidence Act and reliance on Joe Ige v. Amakiri (Supra) was not relevant f and as such could not assist the appellant. On the second issue it was submitted that the findings of the court below was based on the case put forward by the parties. Reference was made to both the statement of claim g and the statement of defence and it was submitted that issues were joined on the questions of both negligence and forgery. It was contended that the trial court could not go outside the issues formulated by the parties. h The respondent urged the court to dismiss the appeal and affirm the decision of the court below. I will first deal with the second issue; it is more convenient to do so. It was contended that the trial Judge made out a i case different from that pleaded by the parties. It was submitted that the claim was founded on negligence and that the issues were joined on negligence but the trial Judge based his judgment on forgery. To resolve this issue, we must look j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA Bank of the North Ltd v. Lake Chad Research Institute 393 a at the pleadings of the parties. In its statement of claim the respondent pleaded:– “(4) The plaintiff avers that prior to this action, the defendant b negligently paid two forged cheques Nos. 019599 for N20,000.50k and 019595 for N55,270 on 3rd and 23rd Feb- ruary, 1987 (sic) respectively from the said account of the plaintiff to an unauthorised person. (5) The plaintiff further avers that the plaintiff’s instruction to c the defendant prior to this negligent payment of [the] sum of N75,270 was that any cheque from the plaintiff shall be franked and duly signed by two officers of the plaintiff whose specimen signatures were duly lodged with the defendant. d (7) The defendant if a little care was taken before paying the said two cheques by comparing the signatures on two said cheques with the standard signatures earlier lodged with the defendant by the plaintiff, the said amount of money in dis- e pute would have not been paid out. (8) The plaintiff will at the trial of this action rely on the introduction letter containing the genuine specimen signatures of the agents of the plaintiff given to the defendant for the purposes of cashing cheques, and the purported specimen sig- f natures used in collecting the said amount in dispute. (12) The plaintiff will also rely at the trial on the reports of the police and that of the handwriting expert; the plaintiff hereby pleads the said reports relating to this case.” g The appellant in its statement of defence averred:– “(4) Further or in the alternative to the above if (which is not admitted) the endorsement of the said cheques were forged, the defendant will contend at the trial that it paid the cheques in good faith and in [the] ordinary course of busi- h ness. In the premises, the defendants will rely on the Bills of Exchange Act and all available Legal equitable defences. (9) The defendants deny paragraph 12 of the statement of claim and will lead evidence to establish at the trial of this action i that in the normal course of business, the defendants found the plaintiff’s cheque to have been properly endorsed. (10) The defendants will at the trial of this action tender and rely on all documents in its possession negative to the above suit particularly copy of the plaintiff’s letter of introduction j dated February, 1991.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA 394 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

It could be seen from the pleadings that forgery has been a pleaded by the respondent. The respondent averred that the appellant paid two forged cheques which the appellant denied. There were also averments and denials about genuine- b ness or otherwise of the signatures on the cheques. It is clear that the issues have been joined on whether or not the cheques were forged. Forgery is therefore part of the case made out by the parties. Forgery in my opinion is an issue c raised by the parties themselves. I therefore hold that the trial Judge did not make out a case different from that pleaded by the parties. I now come back to the first issue. The contention of the d respondent was that the appellant was negligent in paying two forged cheques. As I have earlier stated, forgery has been made an issue by the parties at the lower court, and as such the provision of section 24 of the Bills of Exchange Act e is applicable to the case. This is more so where the appellant in its statement of defence stated that it would rely on the Bills of Exchange Act and all available legal and equitable defences. Section 24 of the Bills of Exchange Act (Cap 21) f Volume 1 Laws of the Federation of Nigeria, 1958 provides:– “24 Subject to the provision of this Act, where a signature on a bill is forged or placed thereon without the authority of the g person whose signature it purports to be, the forged or unauthorised signature is wholly inoperative, and no right to retain the bill or to give a discharge therefore or to enforce payment thereof against any party thereto can be acquired h through or under that signature, unless the party against whom it is sought to retain or enforce payment of the bill is precluded from setting up the forgery or want of authority. Provided that nothing in this section shall affect the ratification of an unauthorised signature not amounting to forgery.” i Commenting on the above section, it was stated in Chalmers on Bills of Exchange (13ed) at page 24 that:– “This section relates to a forged or an unauthorised signature . . . It lays down the general principle that a banker who honours a j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA Bank of the North Ltd v. Lake Chad Research Institute 395 a document purporting to be a cheque but on which the customer’s signature as drawer has been forged is not entitled in the absence of estoppel to debit his customer with the money that he has paid away.” b Also in Halsbury’s Laws of England (4ed) Volume 3 it was stated:– “A document in cheque form to which the customer’s name as c drawer is forged or placed therein without authority is not a cheque but a mere nullity, and unless the banker can establish adoption or estoppel, he cannot debit the customer with any payment made on it.” d From the provision of section 24 it could be seen that, where a signature on a bill is forged, the unauthorised forged signature is totally inoperative. A forged cheque cannot confer title to its holder to the amount stated therein, even if the e holder has given value to it in good faith, because his holding is based upon a forged signature. By operation of section 24 the appellant would not be entitled to debit the respondent with the amounts it paid if the f cheques were forged unless the appellant could establish adoption or estoppel. At the court below the respondent called three witnesses. One of the witnesses was a handwriting expert. His evidence was to the effect that the two g cheques, exhibits A1 and A2, were forged. His testimony was neither contradicted nor discredited by the appellant. I therefore agree with the finding of the trial Judge that the two cheques were forged. This being the case, the cheques h were mere nullities and the appellant was not entitled to debit the respondent unless the appellant could establish adoption or estoppel. At the trial, the appellant called one witness who testified i on its behalf. Part of his testimony reads:– “As far as we are concerned we are not liable because we paid these two cheques in good faith. By good faith I mean that when a cheque is properly drawn i.e. the signature on the cheque is genu- j ine and there is sufficient fund in the customer’s account.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Muhammed JCA 396 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Under cross-examination he stated:– a “In February, 1981 I was working at the Damaturu Branch as an Accountant. I was posted to Maiduguri on 25/7/83. I came across the exhibits in question about a year ago. I do not know who the b paying cashier was in respect of exhibits A1 and A2 but he is no more there.” It could be seen that the witness was not the cashier who paid out the cheques. He was not at the branch when the c incidents happened. The cashier who paid out the forged cheques was not called. There was no evidence that the cashier took all the necessary precautions before paying the cheques. There is no evidence whatsoever to show that the cashier was diligent. Sections 60 and 90 of the Bills of Ex- d change Act cannot avail the appellant because there is no iota of evidence to show that the appellant was not negligent. There is also no evidence to show that the respondent condoned the forgery, or is precluded from setting up want e of authority. In the circumstances the appeal lacks merit and is dismissed by me. I affirm the judgment of Kolo CJ delivered on 6th September, 1988. The respondent is entitled to costs f which I assess at N1,000. MUSDAPHER JCA: I have had the honour to read before now the judgment of my lord Muhammad JCA, delivered just now. I entirely agree with the conclusion arrived at. I g adopt the same reasoning as mine and accordingly hereby dismiss the appeal and affirm the decision of the lower court. I abide by the order for costs contained in the lead judgment. h OKEZIE JCA: I have read in advance the reasoning for the judgment which have now been read by my learned brother, Muhammad JCA. I would not wish to add any thing further as I believe he has covered the grounds which lead me to i dismiss the appeal and affirm the judgment of Kolo CJ delivered on 6th September, 1988. I abide by the order of costs made therein. Appeal dismissed. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

First Bank of Nigeria Plc v. Nze K.C. Ibennah 397 a First Bank of Nigeria Plc v. Nze K.C. Ibennah COURT OF APPEAL, PORT-HARCOURT DIVISION b ONALAJA, EDOZIE, ROWLAND, JJCA Date of Judgment: 27 APRIL 1995 Suit No.: CA/PH/217/91

Banking – Damages for wrongful dishonour of cheque c drawn on solicitor’s client account Banking – Wrongful dishonour of cheque – Measure of damages awarded for wrongful dishonour of bank draft Facts d The respondent claimed against the appellant the sum of N500,000 as damages for libel or in the alternative for general damages. e The customer of the appellant, the respondent, purchased a bank draft payable at sight at Port-Harcourt. The respondent, a solicitor, paid the draft into his account in Port-Harcourt and same was dishonoured. He sued claiming damages for f exemplary damages. The High Court found for the plaintiff and awarded exemplary damages. The defendant appealed. Held – g The respondent’s cheque was wrongly dishonoured and the respondent was entitled to damages. The principle in the assessment of the award of damages is that the respondent is h entitled to be awarded such sum as will fairly compensate him for the loss that he has actually sustained. The measure of damages in any case is founded on the principle of resti- tuo in integrum. i Appeal allowed in part. Cases referred to in the judgment Nigerian j A.N.T.S. v. Atoloye (1993) 6 N.W.L.R. (Part 298) 233 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

398 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Abioye v. Yakubu (1991) 5 N.W.L.R. (Part 190) 130 a Adeleke v. National Bank of Nigeria Ltd (1978) 1 N.L.R. 157 Adeniyi v. Governing Council, Yaba Tech. (1993) 6 b N.W.L.R. (Part 300) 426 Aeroflot v. U.B.A. (1986) 3 N.W.L.R. (Part 27) 188 Akintola v. Oluwo (1962) 1 S.C.N.L.R. 352, (1962) 1 All c N.L.R. (Part 2) 224 Balogun v. Oshunkoya (1992) 3 N.W.L.R. (Part 23) 827 Balogun v. The National Bank of Nigeria Litd (1978) 3 S.C. 155 d Bankole v. Pelu (1991) 8 N.W.L.R. (Part 211) 523 (S.C.) Efetiroroje v. Okpalefe II (1991) 5 N.W.L.R. (Part 193) 517 (S.C.) e Eholor v. Osayande (1992) 6 N.W.L.R. (Part 249) 524 (S.C.) Ezeani v. Ejidike (1964) 1 All N.L.R. 402 f Jarmakani Transport v. Abeke (1963) 1 All N.L.R. 180 Nzeribe v. Dave Engineering Co Ltd (1994) 8 N.W.L.R. (Part 361) 124 Onagoruwa v. Inspector-General of Police (1991) 5 g N.W.L.R. (Part 193) 593 Onibudo v. Akibu (1982) 7 S.C. 60 Shodipo v. Daily Times (1972) 11 S.C. 69 h SPDC Ltd v. Farah (1995) 3 N.W.L.R. (Part 382) 148 Uzuegbu v. Progress Bank (Nig.) Ltd (1988) 4 N.W.L.R. (Part 87) 236 Ziks Press Ltd v. Ikoku (1951) 13 W.A.C.A. 188 i

Foreign Anns v. Merton Borough Council (1978) A.C. 728 at 751; (1977) 2 All E.R. 492 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

First Bank of Nigeria Plc v. Nze K.C. Ibennah 399 a Blyth v. Birmingham Waterworks Co (1856) II Exch. 781 Liesbosch Dredger v. S.S. Edison (1933) A.C. 449 ( ) ( ) b Lord Citrine Owners v. Hebriden Coast Owners (1961) A.C. 545 Rookes v. Barnard (1964) A.C. 1129 c Nigerian statutes referred to in the judgment Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990, section 57 Court of Appeal Act, 1976, section 16 d Evidence Act (Cap 112) Laws of the Federation of Nigeria, 1990, section 74(1)(a) and (b)

Books referred to in the judgment e Black’s Law Dictionary (6ed) Centennial Edition 1891– 1991, page 390 Halsbury’s Laws of England (4ed) Volume 12, paragraph f 1186 page 470, paragraph 1189 page 472 and paragraph 1190 page 474 MacGregor on Damages (13ed) paragraphs 300, 301 and 304 g Judgment ONALAJA JCA: (Delivering the lead judgment) The plaintiff h hereinafter referred to in this judgment as the respondent commenced the action which led to this appeal with issuance of a writ of summons against the defendant, henceforth called the appellant in this judgment. After service of the i writ on the appellant, pleadings were filed, exchanged and amended. As it is the law that a statement of claim supersedes the writ of summons, the claims of the respondent against the j appellant were as formulated in paragraph 21 of the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 400 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. amended statement of claim page 20 of the record of pro- a ceedings (referred to in this judgment as the record) thus:– “21 Wherefore the plaintiff claims against the defendant a sum of N500,000 general damages for libel or in the alternative b N500,000 general damages suffered by the plaintiff.” To establish his claim the respondent called four witnesses as PW1, PW2, PW4 and PW5 whilst plaintiff/respondent testified for himself as PW3. c The gist of respondent’s case being that on 11th March, 1983 as a customer of the appellant, which is a commercial bank, carrying on banking business throughout the length and breadth of the Federal Republic of Nigeria with a branch d at Kings Square, Benin City, then Bendel State, now Edo State, he obtained a bank draft of the appellant number BB/F 022235 for the sum of N7,000 payable at sight at its Port Harcourt Main Branch. The said bank draft which was e crossed was admitted at trial and marked exhibit E. On 14th March, 1983 respondent lodged exhibit E into his account at Societe Generale Bank (Nig.) Ltd at 2, Station Road, Port-Harcourt. f The appellant without clearance from its Kings Square branch, Edo State, which issued the bank draft for confirmation through radio, link, telephone and or courier services, after acknowledgment of the lodgement of the draft dishon- g oured the payment of exhibit E with the endorsement which stated “Signatures Differ” and returned exhibit E unpaid through Societe Generale Bank (Nigeria) Ltd, with debit note dated 17th March, 1983. The debit note was received in h evidence and marked exhibit F. The respondent pleaded and established through PW5, a banker with Societe Generale Bank (Nigeria) Ltd, that the endorsement “Signatures Differ” was published to the said i PW5 falsely and maliciously that he was insolvent and presented a false draft which he obtained fraudulently. PW5 testified that, as a result of the endorsement of exhibit E that signatures differ his bank placed caution on the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 401 a account of the respondent. His bank regarded the respondent as having obtained exhibit E fraudulently. As exhibit E was a bank draft from a highly reputable bank to have endorsed b that the “Signatures Differ” meant, regarded, and was treated as a false draft obtained through wrongful and illegal procedure. The respondent was treated by his bank as an insolvent customer, thereby placing caution on his bank c transactions so as not to make his bank also a victim of respondent’s fraudulent acts. The respondent urged the court that by virtue of the negligence of the appellant which was done carelessly and reck- d lessly without cross-checking with the issuance branch of the appellant through radio, telephone, or courier services as to the authenticity of exhibit E but proceeded and rushed to dishonour it as endorsed greatly injured his credit and repu- e tation as a businessman and traditional title holder. Respondent as PW3 testified as to his status in life having had liberal university education at the University of Nigeria, f Nsukka where he graduated in 1971 with honours degree of Bachelors of Arts. He was conferred with a chieftaincy title of Kevin Chilagoro Ibenna Omereoha I of Obizi by Eze R.O. Ekenna Obizie II of Obizi on 26th December, 1983 as g evidenced by Certificate of Chieftaincy title, marked exhibit D. He was conferred chieftaincy title by same Eze with PW2 on the same day, 26th December, 1983, as confirmed by PW2 in his testimony. h PW3/respondent was appointed a company manager for the Eastern Marketing Operations of National Oil and Chemical Company Ltd, for many years. He was based in Port Harcourt. It was whilst he was holding the post of Re- i tail and Domestic Manager East that he appointed PW1 as LPG Distributor for National Oil and Chemical Marketing Company Ltd, for Umuahia as per letter dated 2nd July, 1982, admitted as exhibit A. A letter of warning to LPG j Sales distributors about confining their sales within their [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 402 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. zone dated 21st May, 1981 was admitted as exhibit B, hav- a ing originated from the respondent. To show that he had sufficient funds as at the time exhibit E was issued he produced the statement of his account with b the Benin branch of appellant which was marked exhibit G. Respondent testified that the sum of N7,000 converted into exhibit E was meant as a security deposit for appointment as sub-distributor of beer by PW4, as per letter dated 14th c April, 1983, admitted as exhibit M whilst the letter of offer and cancellation of appointment as beer sub-distributor with PW4 dated 25th February, 1983 and 22nd April, 1983 were marked exhibits H and J respectively. d Due to the dishonour of exhibit E, respondent engaged the services of a solicitor who on his instructions exchanged correspondence with the appellant. The letter of respondent’s solicitor dated 23rd November, 1983 was admitted as e exhibit L, the reply from the legal department of the appellant was admitted and marked exhibit K. The appellant called an only witness from its Port Harcourt f Main Branch Office. He testified that upon receipt of exhibit E for clearance in their main branch office in Port-Harcourt the normal procedure of checking the standard signatures on exhibit E was done by comparing it with the standard signatures already supplied to them from the Head Office. The g branch office was unable to confirm with the Kings Square branch of the appellant in Benin City due to malfunction of their radio link or through telephone or courier service to play safe and on the side of caution due to bank frauds h prevalent in Nigeria as the signatures appear to differ from the ones kept in the Port-Harcourt branch and to protect and safeguard the interests of the respondent and the appellant, to fall within the period of the guidelines of the directive of i the Central Bank of Nigeria, endorsed the draft as shown in exhibit E that the “Signatures Differ”. Being a bank draft the banking practice is that the respondent had sufficient funds and must have paid fully with the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 403 a bank charges before the draft was issued. He denied the charge of insolvency of the respondent. Owing to the prevalent bank malpractices in Nigeria out of caution exhibit E b was so endorsed and not carelessly or recklessly. Due to the non-functioning of appellant’s radio link and telephone with the issuing branch office of the bank draft, to safeguard and protect the interests of both parties, hence the endorsement c on exhibit E which did not bear any libel on the respondent. The learned Counsel for the appellant and respondent exchanged written addresses which were amplified in their oral submissions in court. d In a considered judgment based upon the pleadings, evidence and addresses of Counsel to the parties, the learned trial Judge, Honourable Justice Sotonye Denton West on e 10th December, 1990 entered judgment for the respondent by concluding at page 103 of the record thus:– “Consequently, from the above premises, I hereby grant to the plaintiff substantial and exemplary damages in the sum of f N150,000 (One Hundred and Fifty Thousand Naira) with costs assessed in the sum of N500 (Five Hundred Naira) against the defendant.” Aggrieved with this judgment, the appellant filed its notice g on 13th December, 1990, at pages 112–114 of the record. Two grounds of appeal and their particulars were filed. With the leave of this Court three additional grounds of appeal with their particulars were filed in court. h At the hearing of this appeal the appellant relied on its amended appellant’s brief of argument filed on 18th No- vember, 1994. The same was adopted in argument of the appeal and urged the court to allow the appeal by dismissing i respondent’s claim as the learned trial Judge based his judgment on the alternate claim as the substantive claim failed. Should this Court hold a contrary view the respondent was only entitled to nominal damages and not exemplary dam- j ages erroneously awarded by the learned trial Judge. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 404 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Distilled from the grounds of appeal, the appellant formu- a lated the undermentioned as the issues germane and arising for determination in this appeal as shown at page 2 paragraph 2 of the appellant’s amended brief of argument. b “2 Issues for Determination From the writ, the pleadings, the evidence in support of the pleadings including exhibits admitted as well as the grounds of appeal, the following issues arise for deter- c mination:– (i) Whether the trial Judge was right in treating the suit before him as a proper case for libel. (ii) Whether there was a proper basis for the assessment and award of a huge sum of N150,000 as d general damages to the respondent for failure of the appellant to honour respondent’s bank Draft for N7,000 (Seven thousand Naira) only. (iii) Whether the respondent conclusively discharged e the onus placed on him of establishing that at the material time to this action he was [a] trader or a businessman. (iv) Whether the judgment of the court below was against the weight of evidence.” f On the other side of the line in this appeal the respondent at page 2 of his brief in paragraph 2 set out the undermentioned as the issues for determination:– “(a) Whether the trial Judge was right in awarding N150,000 g damages to the plaintiff/respondent. (b) Whether the plaintiff/respondent conclusively discharge the onus of proof on him for the judgment in his favour.” Succinctly put the issues of the appellant and respondent can h be encompassed into the issues whether based on the pleading, evidence and submissions of Counsel the respondent discharged the burden placed upon him which entitled him to judgment. i Whether having held that respondent established his case the learned trial Judge was right in awarding the sum of N150,000 as the respondent and the appellant did not press seriously the claim for libel but proceeded to award as j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 405 a exemplary damages based on the alternative claim the sum of N150,000. The facts are not much in dispute; it is the evaluation and b ascription by the learned trial Judge of the facts from the evidence that the appellant attacked as it was perverse giving rise to the exception of the laid-down and acceptable rule of law about the attitude of an appellate court generally not to c interfere with the finding of fact by the lower court except where such finding is perverse. As contended by the appellant that the evaluation and ascription of the evidence having regard to the weight of evidence was perverse as the respon- d dent failed to establish the libel. Furthermore, the learned trial Judge was in serious and gross error in awarding the sum of N150,000 based upon the alternate claim of exemplary damages on wrong principle of e law and by the rejection of the learned trial Judge that section 57 of the Bills of Exchange Act did not apply. Should the learned trial Judge have rightly considered this Act she would have come to the irresistible conclusion that assuming f which was denied by the appellant, the respondent established his case of negligence, libel or breach of contract, that respondent was only entitled to nominal damages and not exemplary damages. g With regard to the issue of negligence, the appellant contended that the respondent, not being a trader or businessman, was not entitled to substantial damages but nominal damages on the assumption, though denied, that respondent h established liability for breach of contract. Reliance was put on authorities referred to in the brief of argument of the appellant. He concluded the appeal be allowed. Respondent contended that the learned trial Judge held i rightly from the evidence, pleadings and the law that, based upon the testimony of PW5, which the learned trial Judge accepted, that the endorsement “Signatures Differ” lowered the reputation of the respondent as a good customer by j their bank. They treated exhibit E as a fake draft obtained [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 406 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. fraudulently by the respondent. They placed the account of a the respondent on caution and monitored the same to avoid a fake draft or fraudulent transactions from the respondent. Exhibit E was published negligently and maliciously to a b third party which entitled respondent to the claim for libel. In answer to the Bills of Exchange Act this ought to have been pleaded as a special defence, having not been pleaded, basing it on the rule of pleading that unpleaded facts go to c no issue the learned trial Judge rightly rejected the application of the Act in the instant action. Through the testimonies of PW1, PW2, in particular, respondent established that he was a trader and or business- d man which the dishonour of exhibit E even on the basis of breach of contract entitled him to substantial damages. The learned trial Judge held rightly that respondent was not only a trader but also a businessman which evidence was unchal- e lenged by the appellant. Finally, through the evidence of PW2 who was installed the same day as a traditional chief and confirmed by the certificate of traditional chieftaincy title, exhibit D, respon- f dent established his status as a traditional title chief which the appellant damaged by the dishonour of exhibit E as not worthy as a traditional chief being involved in a fake bank draft. g Without doubt from the above established facts which were not challenged, the findings of the learned trial Judge were not perverse thereby depriving this Court from disturb- ing the said findings of facts being a Court of Appeal. h The award of the sum of N150,000 as damages by the learned trial Judge was not based on a wrong principle of law, it was amply justifiable leading to upholding this award i by dismissing the appeal as lacking in substance. The above are the contentions of the parties to this appeal. The appeal is going to be decided on a narrow compass simply put, whether the respondent, having regard to the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 407 a pleading and evidence, and in law established the liability of the appellant based on tort or breach of contract and whether the award of N150,000 was justifiable in law. b The appeal being a civil action, the onus of proof or burden cast on the respondent based on judicial interpretation of sections 135, 136 and 137 Evidence Act (Cap 112) Laws of the Federation of Nigeria, 1990 is for the respondent/ c plaintiff to succeed by preponderance of evidence of probability on the strength of his own case and not the weakness of defendant’s/appellant’s case (see Eholor v. Osayande (1992) 6 N.W.L.R. (Part 249) 524 (S.C.); Balogun v. d Oshunkoya (1992) 3 N.W.L.R. (Part 232) 827 (C.A.); Uzuegbu v. Progress Bank (Nig.) Ltd (1988) 4 N.W.L.R. (Part 87) 236 at 239). The exception to the above rule, more especially where the defendant has not set up a counter- e claim, is where there is a situation where the facts in a defendant’s pleading and facts support the claim in plaintiff’s case, the latter (plaintiff) can use the facts in the defendant’s case which supports its claim to establish its own case (Akin- tola v. Oluwo (1962) 1 S.C.N.L.R. 352; (1962) 1 All N.L.R. f (Part 2) 224; Efetiroroje v. Okpalefe II (1991) 5 N.W.L.R. (Part 193) 517 (S.C.); Bankole v. Pelu (1991) 8 N.W.L.R. (Part 211) 523 (S.C.); Gankon v. Ugochukwu Chem. Ind. (1993) 6 N.W.L.R. (Part 297) 55 (S.C).) g In establishing the case, the plaintiff must confine itself to pleaded facts as facts not pleaded go to no issue. As the rule of pleading is the bedrock in our civil jurisprudence, it lends credence to the importance of pleading in our system as a h case succeeds or fails based upon the pleading. It is this pre- eminent position of pleadings that provides the rule that both the courts and parties are bound by the pleadings. The rule had its origin on the rule of natural justice of audi alteram i partem (that is, hear the other side). This rule is a safety valve against the element of surprise on the adverse party (Abimbola George and others v. Dominion Flour Mills Ltd (1963) 1 S.C.N.L.R. 117; (1963) 1 All N.L.R. 71 at 77; j Ferdinand George and another v. U.B.A. (1972) 8–9 S.C. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 408 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

264; (1972) 1 All N.L.R. (Part 2) 347 (S.C.); Aeroflot v. a U.B.A. (1986) 3 N.W.L.R. (Part 27) 188 (S.C.); Chief Mrs Federera Akintola and another v. Mrs C.F.A. Dedeke So- lano (as executrix of Canon D.O. Dedeke) (1986) 2 b N.W.L.R. (Part 24) 568; Otapo v. Sunmonu (1987) 2 N.W.L.R. (Part 58) 587; Adeniyi v. Governing Council Yaba Tech. (1993) 6 N.W.L.R. (Part 300) 426 (S.C.)). In paragraph 6 of the amended statement of claim at page c 16 of the record the respondent averred as follows:– “6 On 11/3/83 the defendant negligently and carelessly issued to the plaintiff a Bank Draft No. BB/F 022235 for N7,000 payable at sight at the Port-Harcourt Main Branch of the de- d fendant, the said Draft shall be founded upon at the trial. Particulars of Negligence and Carelessness (1) The defendant Branch at Port-Harcourt failed to take necessary steps to ensure that the draft was not returned unpaid in time. Such steps are the use of radio, telephone e or courier to contact the Benin Branch to confirm the signatures as the matter was internal at the moment. (2) Since the draft was crossed and therefore paid in by the plaintiff through his branch (sic) the defendant had ample time to check with Benin Branch before returning the f draft ‘Dishonoured’. This the defendant failed to do and returned within 3 days. (3) The defendant owed the plaintiff a duty of ensuring that the draft was properly prepared and duly signed by the g authorised signatories and this defendant failed to do.” In paragraphs 3 and 4 of the amended statement of defence the appellant pleaded as follows:– “3 The defendant denies very strongly paragraph 6 of the h amended statement of claim and will put the plaintiff to its strictest proof. The defendant avers that it was never negligent nor careless in the issue to the plaintiff of the bank Draft No. BB/FO 22235 for N7,000 4 As to the Particulars of Negligence and carelessness alleged i in paragraph 6 of the amended statement of claim, the defendant denies same and will put the plaintiff to their strictest proof. The defendant however avers as follows:– (i), (ii), (iii), (iv), (v) whatever the conduct of the defendant complained of it was done in good faith to protect the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 409 a interest of the plaintiff and that of the defendant in their banker/Customer relationship having regard to the prevailing fraud that was prevalent in the banks at the time. b The defendant will at the trial rely on the publication titled ‘Large Scale Fraud in banks, CBN Linked’ appearing on the National Concord issue of Friday April 26, 1985. The defendant will at the trial rely on the extract of the certified true copy of the defendant’s Authorised Signature Book c which contained the signatures of the two Authorised signatories to the draft cheque No. BB/FO22235. The defendant contends that it is not unusual to find a person signing two signatures at the same time and both having different characters. The defendant will at the trial compare the characters d of the signatures on the draft cheque with those on the Authorised Signature Book” but alas at the trial the authorised signature book pleaded elegantly was not produced by appellant at the trial in its e defence. As the court does not form the habit of speculating on the contents of documents not produced before it no further comments shall be made on this document. It is trite law that facts pleaded must be supported with evidence, as f averment is no proof of evidence. From the foregoing the parties joined issues of negligence. Negligence in law means the omission to do something g which a reasonable man guided upon the considerations which ordinarily regulate the conduct of human affairs would do or doing something which a prudent and reasonable man would not do, per Alderson Baron in Blyth v. Bir- h mingham Waterworks Co (1856) II Exch. 781 at 784. What amounts to negligence depends on the facts of each particular case as the categories of negligence are never closed (Fardon v. Harcourt Rivington (1932) All E.R. Re- i prints 81 at 83; Alhaji Kalla v. Jarmakani Transport Ltd (1961) 1 All N.L.R. 747 by Sir Udo Udoma J (as he then was) followed and adopted in my unreported judgment in Suit No. ID/1546/89 between Chief J.A. Nnadi v. Brumeli j Construction Nig. Ltd delivered on 3rd September, 1993). [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 410 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

What is the duty of care and to whom it is owed was re- a cently considered to mark the 50th anniversary of Donoghue v. Stevenson (1932) A.C. 562 at 580 per Lord Atkin by the House of Lords in Junior Books Ltd v. Veitchi Co Ltd (1982) b 3 All E.R. 201; (1982) 3 W.L.R. at 477 wherein it considered the rule laid down by Lord Wilberforce in Anns v. Mer- ton Borough Council (1978) A.C. 728 at 751; (1977) 2 All E.R. 492 at 496 wherein the doctrine of proximity as the c foundation of duty of care in tort is now firmly established as the basis of an action in negligence. This was given emphatic approval by Karibi-Whyte JSC in Chief Patrick A. Abusonwan v. Mercantile Bank of Nigeria Ltd (1987) 3 d N.W.L.R. (Part 60) 196 at 198; Strabag Construction (Nig.) Ltd v. Ogarekpe (1991) 1 N.W.L.R. (Part 170) 733; Obimi- ami Brick and Stone (Nig.) Ltd v. A.C.B. Ltd (1992) 3 N.W.L.R. (Part 229) 260 (S.C.); A.N.T.S v. Atoloye (1993) 6 e N.W.L.R. (Part 298) 233 (C.A.). At pages 92 and 93 of the record after consideration of Abusonwa v. Mercantile Bank Ltd; Ann v. Merton Borough f Council (supra) and some other cases the learned trial Judge concluded at page 93 of the record:– “Therefore on the authority of Abusonwan v. Mercantile Bank of Nigeria Limited, it is quite clear that the defendant owe a duty of g care to the plaintiff whether he present (sic) the cheque for clearing or not.” The complaint against the judgment of the lower court lacks substance as the learned trial Judge’s approach on the issue h of liability was well founded with the findings of fact justified. As an appellate court there is no legal justification to disturb the said finding. Having found the issue of liability established, the next i issue for consideration is the measure of damages or quantum of damages, whether the respondent is entitled to the sum of N150,000 which was awarded by the learned trial Judge as substantial and exemplary damages. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 411 a The measure of damages under our system is compensatory as stated in Lord Citrine (Owners) v. Hebriden Coast (Owners) (1961) A.C. 545 per Devlin LJ (as he then was) at b 582 that:– “The only principle of law that can be laid down is the familiar one that the plaintiff is entitled to be awarded such sum as will fairly compensate him for the loss that he has actually sustained.” c The measure of damages is founded on the principle of restitutio in integrum which was stated by Lord Wright in Liesbosch Dredger v. S.S. Edison (1933) A.C. 449 at 459 wherein he said:– d “The substantial issue is what in such a case is the true measure of damages. It is not questioned that when a vessel is lost by collision due to the negligence of the wrong doing vessel the owners of the former vessel are entitled to what is called restitutio in integrum which means that they should recover such a sum as will replace e them, so far as can be done by compensation in money, in the same position as if the loss has not been inflicted on them, subject to the rule as to remoteness of damage.” The issue raised in the appeal is whether the respondent is f entitled to nominal damages as contended by the appellant. It based its case that, as exhibit E is a bank draft it is a bill of exchange under the Bills of Exchange Act and by virtue of section 57 the respondent is entitled to nominal damages. g In further contention that the relationship between the parties is contractual basing it on the rule of Hadley v. Baxen- dale (1854) Exch. 341 at 354 respondent is only entitled to nominal and not substantial damages. As the transaction was h between the bank and its customer for a dishonoured bank draft, to be entitled to substantial damages, the respondent must establish that he was a trader or businessman. This respondent failed woefully to prove. The summary of the i evidence of PW1 was that respondent was an employee of National Oil and Chemical Marketing Nigeria Ltd. By virtue of this office respondent employed PW1 as LPG distributor, confirmed by exhibit A. PW4 though made an offer to ap- j point the respondent as beer sub-distributor. This did not [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 412 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. materialise for non-payment of the security deposit of a N7,000 within the stipulated time. In essence, respondent did not show when he ceased to be an employee and also failed to establish that he was a trader or businessman. b The respondent contended on the Bills of Exchange Act that it was a special defence it ought to have been pleaded under Order 25 Rule 4(1) of the High Court Rules of Rivers State, 1987. The court below rightly rejected the contention, c likewise the Court of Appeal should reject the matter of the Bills of Exchange Act as a non-issue. Apart from this contention, the respondent established that d he was a trader or businessman, as the evidence was unchallenged by the appellant, therefore the respondent was entitled to the substantial damages awarded him by the lower court. As the award was based on the right principle of law e and not been too excessive or too low the appeal court should not disturb the award. Coker AG FJ stated that the attitude of the appellate court on award of damages which is well settled in Jarmakani f Transport v. Abeke (1963) 1 All N.L.R. 180 that:– “The principles on which an Appeal Court acts when it is called upon to decide on the quantum of damages are well established and clearly stated by Greer, LJ in Flint v. Lovell (1935) 1 K.B. 354 g at page 360. These principles were considered by the Privy Coun- cil in Nance v. British Columbia Electric Railway Company Ltd (1951) A.C. 601 where at page 613 Viscount Simon observed as follows:– h ‘The principle which apply under this head are not in doubt. Whether the assessment of damages be by a Judge or jury the appellate court is not justified in substituting a figure of its own for that awarded below simply because it would have awarded a different figure if it had tried the case at i first instance. Even if the tribunal of first instance was a Judge sitting alone, then before the appellate court can properly intervene, it must be satisfied either that the Judge, in assessing the damages, applied a wrong principle of law (as by taking into account some irrelevant factor or leaving j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 413 a out of account some relevant one) or, short of this, that the amount awarded is either so inordinately high that it must be wholly erroneous estimate of the damage (Flint v. Lov- ell) approved by the House of Lords in Davies v. Powell b Duffryn Associated Colliery Ltd (1942) A.C. 601.’” See further N.E. Ekpe v. S.A. Fagbemi (1978) 3 S.C. 209; Chief Harold Shodipo v. Daily Times (1972) 11 S.C. 69; Obere v. Eku Baptist Hospital (1978) 6–7 S.C. 15; Ziks c Press v. Ikoku (1951) 13 W.A.C.A. 188; DHL Int. (Nig.) Ltd v. Chidi (1994) 2 N.W.L.R. (Part 329) 720; The Shell Petro- leum Development Co Ltd v. Councillor F.B. Farah and others (For themselves and on behalf of Nor, Ben, Bare, d Latem and Marke Families of K. Dere, Bori Local Govern- ment Area now Gokana/Tai Eleme Local Government Area) (1995) 3 N.W.L.R. (Part 382) 148 at 193. e Exemplary damages is not easy to define. The definition offered in Black’s Law Dictionary (6ed) Centennial Edition 1891–1991 page 390 is very helpful:– “Exemplary damages are damages on an increased scale, awarded f to the plaintiff over and above what will barely compensate him for his property loss, where the wrong done to him was aggravated by circumstances of violence, oppression, malice, fraud or wanton and wicked conduct on the part of the defendant and are intended to solace the plaintiff for mental anguish, laceration of his feelings, g shame, degradation or other aggravations of the original wrong or else to punish the defendant for his evil behaviour or to make an example of him, for which reason they are also called ‘punitive’, or ‘punitory’ damages or ‘vindictive’ damages unlike compensatory or actual damages, punitive or exemplary damages are based h upon an entirely different public policy consideration, that of pun- ishing the defendant or of setting an example for similar wrong doers as above noted. In cases in which it is proved that a defendant has acted wilfully, maliciously or fraudulently, a plaintiff may i be awarded exemplary damages in addition to compensatory or actual damages. Damages other than compensatory damages which may be awarded against a person to punish him for outra- geous conduct. Such are given as an enhancement of compensatory damages because of wanton, reckless, malicious or oppressive j character of acts complained.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 414 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The above was adopted by Coker JCA (as he then was) a Karibi-Whyte JCA (as he then was) in (1) The Federal Min- ister of Internal Affairs (2) M.Mofio (3) His Excellency Alhaji Shehu Shagari (The President of the Federal Repub- b lic of Nigeria (4) The Honourable Justice P.C. Akpamgbo v. Shugaba Abdurrahman Darman (1982) 3 N.C.L.R. 915 at 955 (see further Halsbury’s Laws of England (4ed) Volume 12 paragraphs 1186, 1189, 1190, pages 470, 472 and 474; Macgregor on Damages (13ed) paragraphs 300, 301, and c 304; Cassell and Co Ltd v. Broome and another (1971) 2 All E.R. 187 adopted and followed in my unreported judgment in G.O.K. Ajayi v. Attorney-General of Lagos State Suit No. ID/286/86 delivered on 11th August, 1989. d The new approach to guide the Judge and the court is the much criticised categorisation of damages by Lord Devlin in Rookes v. Barnard (1964) A.C. 1129; (1964) 1 All E.R. 367, (1964) 2 W.L.R. 269 wherein an extract of Lord Devlin, e quotation in Rookes v. Barnard was commented upon by Brett JSC in Henry Ezeani and others v. Abraham Ejidike (1964) 1 All N.L.R. 402 at 406:– “And any question about exemplary damages needs reconsidera- f tion in the light of the recent decision of the House of Lords in Rookes v. Barnard (1964) 2 W.L.R. 269 to the effect that exemplary damages should be awarded only (1) in cases of oppressive arbitrary, or unconstitutional acts by Government servants (and by others) (ii) where the defendant’s conduct had been calculated by g him to make a profit himself which might well exceed the compensation payable to the plaintiff (iii) where expressly authorised by statute. It is not necessary in the present case to decide whether the courts in Nigeria should adopt this decision in toto, but as a h warning against the over free award of exemplary damages it is of strong persuasive authority . . . Apart from exemplary damages it is recognised in Rookes v. Bar- nard that where damages are at large they may be aggravated by injury to the plaintiff’s feelings of dignity and pride, but the dam- i ages are not at large in this case since the measure of damages is the value of the material converted which is known precisely.” Recently Niki Tobi JCA in Gabriel Onagoruwa and another (for themselves and on behalf of the law firm of Chief G. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 415 a Ayodele Onagoruwa and Co) v. Inspector-General of Police and others (1991) 5 N.W.L.R. (Part 193) at 593–648 held and observed on exemplary damages as under:– b “(48) ‘Exemplary damages’ comes with it the element of puni- tiveness. In short, it is in most cases designed and in the context of this case, to punish a defendant for an abhor- rent behaviour or conduct. A wilful and intimidating conduct which prima facie is not only aberrant but op- c pressive, arbitrary and unconstitutional conduct of a defendant. It is designed to teach the defendant some hard lesson for the unusual and unexpected inhuman or outra- geous conduct so that the particular conduct does not d come the way of the defendant again. (49) Because of the penal nature of exemplary damages, courts of law should distinguish between bona fide conduct and mala fide conduct on the part of a defendant. In the case of the former a court of law should not award e exemplary damages but in the case of the latter a court of law should. (50) The basic principle of law that he who asserts must prove the truth or correctness of his assertion is also applicable f in the proof required is substantially different from the general stream of proof of damages including proof of general damages and proof of aggravated damages. (51) A court of law must be very cautious and careful in g awarding exemplary damages. Before a court can lawfully show the conduct of the defendant as an example by way of awarding exemplary damages, it must be clear that there is other alternative by way of awarding damages for while exemplary damages are punitive in nature, h aggravated damages are compensatory in nature. (52) A court of law cannot award exemplary damages merely for the asking. A court of law cannot award exemplary damages because the court as an adjudicator is annoyed i with the conduct of the defendant. Like the award of every other category of damages, a court of law should not introduce into the arena of award any personal sentiments. The court should as usual remove itself from the arena of contest and examine the real terms of events in j the case dispassionately before coming to the conclusion [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 416 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

that the plaintiff deserves nothing else than exemplary a damages. (53) An oppressive conduct is an over burdensome conduct, a tyrannical and overpowering conduct. An arbitrary con- b duct is a despotic, capricious and absolute conduct arising mainly from accident rather [than] from an established rule. An unconstitutional act is an act committed outside the provisions of the constitution or in more general language an act which is outside the law of an illegal act.” c From the foregoing under the rule of pleading in our adver- sarial system of jurisprudence, exemplary damages must be specifically pleaded with the facts relied upon (Cassel and Co v. Broome (1972) A.C. 1027; (1972) 2 W.L.R.) All the d above authorities were followed and adopted in my unreported judgment in Suit No. ID/651/90 Zanen Verstoep and Co Nig. v. The New Towns Development Authority (2) The Task Force on Environmental Sanitations (3) Captain Giwa e (4) Attorney-General Lagos State and two others delivered on 26th day of February, 1993. In the instant appeal the respondent did not aver nor plead exemplary damages therefore it goes to no issue. The f learned trial Judge was grossly in error to have awarded the sum of N150,000 on a wrong principle of law giving this Court the liberty to interfere with the award of damages by the lower court. g Be that as it may, the appellant raised the issue of the applicability of the Bills of Exchange Act Laws of the Federa- tion, 1958 now Cap 35 Laws of the Federation, 1990. Under the rule of pleading material facts must be pleaded h not the evidence see Federal Housing Authority v. Sommer and others (1992) 1 N.W.L.R. (Part 219) 548 at 560 and 561. Section 74 Evidence Act (Cap 112) Laws of the Federation i of Nigeria, 1990 provides as follows:– “74(1) The court shall take judicial notice of the following facts:– (a) all laws or enactments and any subsidiary legislation made thereunder having the force of law now or j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 417 a heretofore in force or hereafter to be in force in any part of Nigeria. (b) all public Acts, decrees, passed or hereafter to be b passed by Parliament and all subsidiary legislation made thereunder and all local and personal Acts directed by parliament to be judicially and (c) . . .” c See Sylvester Mayaki v. Lagos City Council Caretaker Committee (1977) 7 S.C. 81 per Idigbe JSC that applying section 73(1) now 74(1) of the Evidence Act all courts of law in Nigeria are bound to take judicial notice of all laws or enactments and any subsidiary legislation. This Court of d Appeal can only take judicial notice of matters which the courts of first instance are empowered by law to take judicial notice of under section 16 Court of Appeal Act (Cap 75) Laws of the Federation of Nigeria, 1990 so stated Bello JSC e in Onibudo v. Akibu (1982) 7 S.C. 60 that:– “In my view, the Court of Appeal is only entitled to take judicial notice on Islamic Law in cases where the courts of first instance are empowered by law to take judicial notice of such law. This f must inevitably be so because of the provisions of section 16 of the Federal Court of Appeal Act, 1976” (Peenok v. Hotel Presi- dential (1982) 12 S.C. 1; Adetipe v. Amodu (1969) N.M.L.R. 62). Applying the above to the facts of this appeal that as the g lower court is empowered to take judicial notice of the Bills of Exchange Act I take judicial notice of the said Act. The following sections deserve the attention of this Court:– “Section 2(1) Bill means of Exchange (5)(1) A bill may be h drawn to, or to the order of the drawer or it may be drawn payable to, or to the order of the drawee. (2) Where in a bill the drawer and the drawee are the same person, or where the drawee is a fictitious person or a person not having capacity to contract, i the holder may treat the instrument at his option either as a bill of exchange or as a promissory note.” Giving the above interpretation I hold that the words are not j ambiguous, thereby it is the natural, ordinary, grammatical [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 418 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. meaning that shall apply (see Garuba Abioye and 4 others v. a Saadu Yakubu and 5 others (1991) 5 N.W.L.R. (Part 190) 130 per Bello CJN). Applying the said sections supra to exhibit E, I hold that it is covered by the Bills of Exchange b Act being a bill as defined within the said Act. In this judgment section 57 of Cap 35, the Bills of Ex- change Act lays down the procedure for award, and meas- c urement of damages against parties to a dishonoured bill and with respect need not to have been pleaded. The learned trial Judge made a non finding about the applicability in the instant case. She was evasive and not categorical and spe- d cific as to its applicability, all that she said at pages 94–95 was to the following effect:– “I do not agree with the respected learned Counsel’s view that the plaintiff’s entitlement is only [the] value of the Bill and interest thereon from the date [the] Bill was dishonoured. e If that is the case, then the duty of care of special skills or indeed the fiduciary relationship in relations does not carry any weight and a person who had suffered a breach of that duty has no protection. In fact in this case, in order to be entitled to his claim of f N500,000 and not just N7,000 with interest thereon (with respect I cannot comprehend the logic in this paragraph). He had skilfully called PW1, PW2 and PW4 who have all come to court corroborating the evidence given by the plaintiff to the effect g that he is a trader. Therefore plaintiff’s claim in this matter also prevaricates on damages suffered as a businessman. Lawrence, J. in Gibbons v. Westminster Bank Ltd (1939) 2 K.B. 882 observed thus.” h A judgment emanating from the High Court, a superior court of record, should reflect sound reasoning and use of appropriate words. Collins English Dictionary at page 1160 defines “prevari- i cate” as to speak or act falsely or evasively with intent to deceive (from latin praevaricari) to crookedly, from prae beyond -varicare to straddle the legs, compare (Latin varus bent) prevarication n, prevaricator n”. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 419 a With respect, I am unable to comprehend the synthesis of the words “prevaricates on damages suffered as a business man” used by the learned trial Judge that I make no further b comments but Judges in writing judgments which is a record for posterity should make their thoughts and reasoning comprehensive and meaningful especially to an ordinary layman. The issue now for further consideration is the quantum or c measure of damages as ubijus ibi remedium the Supreme Court in Hycinth Nwachukwu Nzeribe v. Dave Engineering Co Ltd (1994) 8 N.W.L.R. (Part 361) 124 at 147 held that:– “The fact that damages are difficult to assess does not disentitle a d plaintiff from compensation for loss resulting from a defendants breach of contract. Similarly the fact that the amount of such loss cannot be precisely ascertained does not deprive a plaintiff of all remedy.” e In measuring damages in this type of action based on decided authorities involving a dishonoured draft, between a bank and its customer as to the status of the customer as a trader, or a businessman and a non-trader or non- f businessman, engaged the attention of eminent Judges, jurists and textwriters as to the award or quantum of such damages. For a trader or businessman the damages to be awarded is at large or substantial. For a non-trader or non- g businessman the damages is nominal except he pleads special damages ordinarily. In a case of slander it is well settled that the slander of a person by way of his trade or business, profession or calling is actionable without proof of special h damages leading to an award of substantial damages without proof of actual damage. The locus classicus on this burning issue was classically, graphically considered by Idigbe JSC in his usual character- i istic erudition in the illuminating judgment of Mrs Hirat Aderinsola Balogun v. The National Bank of Nigeria Limited (1978) 3 S.C. 155 to 182. The appellant/plaintiff at the request of her client, Mrs j Sandey, recovered on her behalf the sum of N20 from a [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 420 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. debtor and paid the amount into her (the appellant’s) busi- a ness and client’s account with the respondent (who were bankers to the appellant). Later Mrs Sandey presented a cheque of N20 drawn in her favour on the appellant’s busi- b ness or clients’ account with the respondent who having endorsed the cheque with the words “Refer to Drawer” R/D, returned the same to Mrs Sandey who was not paid the N20. Annoyed, Mrs Sandey returned the cheque to the appellant c expressing her surprise that a cheque “for a mere N20 from a lawyer of her type” had had “to bounce”. Embarrassed and annoyed the appellant paid the N20 to Mrs Sandey from her own resources. At the time of the dishonour of the cheque d the appellant had more than enough money with the respondents to meet the cheque. In an action against the respondents for wrongful dishonour of the cheque, the High Court Lagos State held that the appellant “not being a trader” was entitled only to nominal damages because she neither e pleaded nor proved actual damage (special damage). In doing so the said court followed the decision in Gibbons v. Westminister Bank (1939) 2 K.B. 882 and awarded the sum of N10 (£5) to the appellant. f “Held:– On appeal from the decision of the High Court that a solicitor in practice although not a trader is in business. The wrongful dishonour of a cheque drawn on the solicitor’s g client’s account (which in fact is a business account) per se was not only capable of but is deemed to cause damage to his credit and business reputation and consequently applying the principle of law confirmed in the case of Rolin v. h Steward (1854) 14 C.B. 595 the Solicitor is in such circumstances entitled to substantial damages although he neither pleaded nor proved actual damage. Accordingly, the appellant was awarded substantial damages in the sum of N1,000.” i The above rule also applied to a professional man as decided by Ibidapo-Obe J in Adeleke v. National Bank of Nigeria Ltd (1978) 1 N.L.R. 157. The plaintiff, an army officer, issued a cheque which the defendant bank on receipt erroneously j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 421 a presented for payment to one of its own branches. In consequence, the cheque was returned unpaid, although the plaintiff had ample funds in his own bank account. A senior b officer was given notice of dishonour. He issued a writ for libel and claimed damages for libel, he was awarded substantial damages, the plea of the respondent for nominal damages was rejected as the plaintiff therein was an army c officer in the Nigeria Army with the rank of a major. The appellant attacked the finding of the learned trial Judge that the respondent skillfully established through PW1, PW2 and PW4 that he was a trader or businessman. A d cool, calm view and consideration of the pleading and the fact supports appellant’s contention that the respondent did not establish that he was a trader or businessman. The finding that the respondent was a trader or businessman was not e borne out by the evidence. Mere averment in pleadings is not proof of evidence, the pleaded material fact must be supported with credible and satisfactory evidence. The evidence of PW1 and exhibits A and B only established the f respondent to be an employee. With respect, an employee is not a trader in the context of our consideration. PW4 made an offer of appointment as a beer sub- distributor to respondent which was later withdrawn. At no g time did the respondent carried on a beer distributorship business. In any case, no iota of evidence was led by the respondent where or in which place any type of trade or business he carried on his trade or business. One significant h missing evidence is when he left and ceased to be an employee of National Oil and Chemical Marketing Nigeria Ltd. The finding of fact by the learned trial Judge that the respondent was a trader or businessman was perverse giving i this Court authority and jurisdiction to interfere with the finding. The attack of the appellant on this issue is well founded, thereby leading this Court to uphold the contention that the j respondent, not being a trader, businessman or professional [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA 422 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. man, is not entitled to enlarged or substantial damages of a N150,000 but to nominal damages which shall be assessed anon. Having held that the Bills of Exchange Act supra was ap- b plicable, section 57 leads us to the award of nominal damages. As for the quantum based on the basic principle of restitutio in integrum the amount to be awarded in Naira c makes it incumbent to take the fluctuation and decline of Naira daily into consideration. The dwindling purchasing power of the Naira is erratic compared with foreign currencies and has little purchasing power with the daily declining d nature of the Naira. Applying section 16 of the Court of Appeal Act enables and empowers this Court to make an order or judgment the lower court could have made. Based upon the said section 16 of the Court of Appeal Act e (Cap 75) Laws of the Federation of Nigeria, 1990 having held that the award of the sum of N150,000 was based on a wrong principle of law and that it was inordinately too high as the respondent was not a trader, businessman nor a pro- f fessional man to compensate respondent, he is only entitled to nominal damages (see Benue Printing and Publishing Corporation v. Alhaji Umaru Gwagwada (1989) 4 N.W.L.R. (Part 116) 439 at 456). g After a careful consideration of the law and circumstances of this case with the declining nature of the Naira coupled with the high rate of inflation the sum of N25,000 (Twenty- five Thousand Naira) is considered as reasonable and ade- h quate damages for the respondent in this appeal (see James v. Mid Motors (1978) 11 S.C. 31). This court allows the appeal of the appellant on the issue of award, measure and assessment of damages by setting i aside the award of N150,000 by the lower court and substituting the sum of N25,000 (Twenty-five Thousand Naira) as adequate compensatory damages for the respondent in this case. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Onalaja JCA First Bank of Nigeria Plc v. Nze K.C. Ibennah 423 a As costs follow the event since the appeal succeeded partly each party shall bear its own costs in this Court. The respondent is awarded N300 as costs against the ap- b pellant in the lower court, the order of N500 awarded by the lower court is hereby set aside and in its place the sum of N300 is awarded as costs in favour of the respondent against the appellant. c EDOZIE JCA: I was privileged to have read in draft the lead judgment just delivered by my learned brother, Onalaja JCA, in which he dealt adequately with the various issues contested in this appeal. d The main issue raised in the appeal relates to the award of N150,000 exemplary damages made by the trial Judge in favour of the respondent against the appellant bank. It is very well settled that an appellate court will alter an award e of damages by a trial court only if the award is shown to be either manifestly too low or was an award made on a wrong principle (see Elf (Nig.) Ltd v. Sillo (1994) 6 N.W.L.R. (Part 350) 258 at 274; Ijebu Ode Local Government v. Adedeji f Balogun and Co Ltd (1991) 1 N.W.L.R. (Part 166) 136). It is only where the appellate court is convinced that an award of damages is entirely on erroneous estimate that it will interfere (Onaga and others v. Micho and Co (1961) 2 g S.C.N.L.R. 101; (1961) 1 All N.L.R. 324 at 328). From the judgment of the learned trial Judge in the case in hand, the principle applied in making such a substantial award of N150,000 is based on a claim of exemplary damages. But h the respondent from his pleadings never pleaded or made such a claim for exemplary damages. It has been held that awarding exemplary or punitive damages does not strictly lie within the realm of civil actions. Its i proper place is in the criminal field (Ladejobi v. Shodipo (1989) 1 N.W.L.R. (Part 99) 596 at 609). In the case of Rookes v. Barnard (1964) A.C. 1129, the English House of Lords limited the categories in which exemplary damages j could be awarded to (1) in cases of oppressive, arbitrary and [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Edozie JCA 424 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. unconstitutional action by servants of the Government; (2) a where the defendant’s conduct had been calculated by him to make a profit for himself which might well exceed the compensation payable to the plaintiff; and (3) where ex- b pressly authorised by statute. Though the decision was approved by the House of Lords in Cassel and Co Ltd v. Broome and another (1972) A.C. 1027, the decision is only of persuasive authority (vide Eliochin Nig. Ltd v. Victor c Mbadiwe (1986) 1 N.W.L.R. (Part 14) 47). Since the respondent never pleaded and relied on exemplary damages, the award made thereon by the learned trial Judge was based on an erroneous principle and therefore d liable to be disturbed. For the foregoing reasons and the fuller reasons stated in the lead judgment, the appeal partially succeeds in respect to the award of damages which is reduced to N25,000. I abide e by other consequential orders made in the lead judgment. ROWLAND JCA: I have had the advantage of reading in advance the judgment of my learned brother, Onalaja JCA, just delivered. For the reasons ably given therein which I f hereby adopt as mine. I too will allow this appeal on the issue of award, measure and assessment of damages as contained in the lead judgment. I endorse the order for costs. Appeal allowed in part. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 425 a Financial Merchant Bank Limited v. Nigerian Deposit Insurance Corporation b COURT OF APPEAL, LAGOS DIVISION KALGO, AYOOLA, PATS-ACHOLONU JJCA Date of Judgment: 13 JUNE 1995 Suit No.: CA/L/247/94 c Banking – Winding-up petition – Liquidator – Whether can present petition for winding-up – Sections 410, 425 of the Companies and Allied Matters Act (Cap 59) Laws of the Federation of Nigeria, 1990, section 38 of the Banks and d Other Financial Institutions Decree No. 25 of 1991 Company law – Winding-up petition – Who can present – Whether provisional liquidator appointed under section 38 of the Banks and Other Financial Institutions Decree No. 25 e of 1991 can present Locus standi – How it arises – How determined

Facts f This appeal is on a very narrow compass. The only issue involved is whether a provisional liquidator appointed under section 38 of the Bank and Other Financial Institutions De- cree No. 25 of 1991 (hereinafter referred to as BOFID), can g present a petition to wind up a failing bank. On 4th March, 1994 the respondent filed a petition in the Federal High Court, Lagos, praying the court for the following reliefs:– h “(i) that Financial Merchant Bank Limited may be wound up by the court under the provisions of the Companies and Allied Matters Decree, 1990, as amended by section 38(4) of BOFID. i (ii) such other order or orders may be made in the premises as shall be just.” This winding-up petition was filed in the said court following the revocation of the banking licence of the appellant j company by the Governor of the Central Bank of Nigeria [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

426 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. pursuant to his powers under section 12 of the BOFID, and a the subsequent appointment of the respondent as the provisional liquidator under a deed of appointment signed by the said Governor. b On 8th March, 1994, the respondent filed an application praying the trial court for an order to advertise the petition for winding-up in accordance with the provisions of Rule 19 of the Companies Winding-Up Rules, 1983. The application c which was heard ex parte and granted was for advertisement of the petition in a Federal Gazette and one national daily newspaper and one other newspaper circulating in Lagos d State. Consequent upon the order for advertisement, the petition was then advertised in the Guardian newspaper of Saturday, 19th April, 1994. The appellant saw it and became aware of it and on 26th April, 1994, filed a motion on notice e praying the court for an order:– “Staying further proceedings and striking out the petition herein on the ground that this Honourable Court has no jurisdiction to entertain same as it is not brought by the proper party in compliance with section 410 of the Companies and Allied Matters Decree, f 1990 and sections 37 and 38 of the Banks and Other Financial In- stitutions Decree, 1991.” The motion was supported by three-paragraph affidavit sworn to by the chairman of the respondent bank, Otunba g Williams Olufemi Ajayi. The application was heard by the learned trial Judge, Eigbedion J, on 1st June, 1994 and in a considered ruling on 28th June, 1994 he dismissed the respondent’s application in its entirety. This appeal is against h that order of dismissal. Held – 1. A person will have legal capacity to sue in a matter in i which it has been clearly shown to the court that his rights or obligations have been or are about to be or are in imminent danger of being violated or invaded or adversely affected by the act complained of. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 427 a 2. In ascertaining whether the plaintiff in an action has locus standi, the pleadings, i.e. the statement of claim, must disclose a cause of action vested in the plaintiff. b The averment in the pleadings will disclose the rights and obligations or interests of the plaintiff which have been violated. 3. An application to the court for the winding-up of a com- c pany shall be by petition presented subject to section 410 of CAMA by:– (a) the company:– d (b) a creditor, including a contingent, or prospective creditor of the company; (c) the official receiver; (d) a contributory; e (e) a trustee in bankruptcy to or a personal representative of a creditor or contributory; (f) the Commission under section 323 of the Decree; f (g) a receiver if authorised by the instrument under which he was appointed; or (h) by all or any of those parties together or separately. g 4. Under section 38 of BOFID quoted above, the bank whose licence is revoked and the Governor of the Cen- tral Bank of Nigeria who revokes the licence are both empowered to file a petition for the winding-up of the h affected bank. This by necessary implication has enlarged the provisions of section 410 of CAMA as regards the persons or bodies who can present a petition for the winding-up of a company which includes a bank. i 5. By the provisions of section 38(1) and (2) of BOFID the Governor of the Central Bank and the appellant in this case, can properly file or present the petition in court for the winding-up of the appellant bank; provided the con- j ditions stated therein are satisfied. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

428 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

6. By the provisions of section 38(3) of BOFID the said a Governor may appoint the respondent or any person as official receiver or provisional liquidator and such appointment shall be deemed to have been made under the b provisions of CAMA and the respondent or any person so appointed shall have all the powers of a provisional liquidator appointed by the Federal High Court under the CAMA. c 7. The powers of a liquidator under section 425 CAMA are very extensive with regard to the control and management of the company being wound up but this control is restricted under subsection (3) of section 425 by the d powers of court and is subject to challenge by any creditor or contributory of the company concerned. The powers and duties of a liquidator under this section appears to be akin to those of an executor/administrator of the es- e tate of a deceased person; so that, whilst the administrator comes in to manage and control the assets of a deceased after his death, the liquidator comes in after a petition to wind up the company is presented to the court. f 8. Section 425(2)(h) CAMA cannot under any stretch of the imagination be taken to mean an open or blank cheque for the liquidator to do anything in relation to the g company including the filing of a petition to wind it up. 9. If the respondent were to be entitled to file a petition, it can only do so in the name of the bank and not in its own name as provisional liquidator. It would not be right h therefore to say that because the powers of directors ceased after the appointment of the respondent as provisional liquidator, the bank cannot act for itself for the purpose of winding-up of itself, and so the liquidator had to take its place. It cannot be so and if it is intended that i the provisional liquidator shall have the power to present a petition to wind up the bank, the law would have said so clearly. It did not say so and such power cannot be implied or presumed. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 429 a 10. There is no clear provisions in the CAMA or the BOFID in which the provisional liquidator appointed under CAMA or under BOFID (as in the instant appeal) is em- b powered by law to present a petition for the winding-up of company or bank. Such a power or right cannot be implied or presumed under the said law. Appeal allowed. c Cases referred to in the judgment Nigerian Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part 122) 377 d Adesanya v. President of the Federal Republic of Nigeria (1981) 5 S.C. 112 Busari v. Oseni (1992) 4 N.W.L.R. (Part 237) 557 e Emelogu v. State (1988) 2 N.W.L.R. (Part 78) 524 Gambioba v. Esezi II (1961) 2 S.C.N.L.R. 237 Melifonwu v. Egbuji (1982) 9 S.C. 145 f Momoh v. Olotu (1970) 1 All N.L.R. 117 Odeneye v. Efunuga (1990) 7 N.W.L.R. (Part 164) 618 Oloriode v. Oyebi (1984) 1 S.C.N.L.R. 390 g Olowosago v. Adebanjo (1988) 4 N.W.L.R. (Part 88) 275 Omoloye v. A-G Oyo State (1987) 4 N.W.L.R. (Part 64) 267 Orogan v. Soremekun (1986) 5 N.W.L.R. (Part 44) 688 h Pepple v. Green (1990) 4 N.W.L.R. (Part 142) 108 Thomas v. Olufosoye (1986) 1 N.W.L.R. (Part 18) 669

Nigerian statutes referred to in the judgment i Banks and Other Financial Institutions Decree No. 25, 1991, sections 12, 38(1)–(5) Companies and Allied Matters Act (Cap 59) Laws of the Federation of Nigeria, 1990, sections 410(1)(a) and (b), j 415(2), 422(1)–(3) and (9) and 425 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

430 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Counsel a For the appellant: Ayanlaja (with him Belgore) For the respondent: Olawoyin (with him Omebam) b Judgment KALGO JCA: (Delivering the lead judgment) This appeal is on a very narrow compass. The only issue involved is c whether a provisional liquidator appointed under section 38 of the Banks and Other Financial Institutions Decree No. 25 of 1991 (hereinafter referred to as BOFID), can present a petition to wind up a failing bank. d On 4th March, 1994 the respondent filed a petition in the Federal High Court, Lagos, praying the court for the following reliefs:– “(i) that Financial Merchant Bank Limited may be wound up by e the court under the provisions of the Companies and Allied Matters Decree, 1990, as amended by section 38(4) of BOFID. (ii) such other order or orders may be made in the premises as shall be just.” f This winding-up petition was filed in the said court following the revocation of the banking licence of the appellant company by the Governor of the Central Bank of Nigeria pursuant to his powers under section 12 of the BOFID, and g the subsequent appointment of the respondent as the provisional liquidator under a deed of appointment signed by the said Governor (see pages 8 and 9–13 of the record of appeal). h On 8th March, 1994, the respondent filed an application praying the trial court for an order to advertise the petition for winding-up in accordance with the provisions of Rule 19 of the Companies Winding-Up Rules, 1983. The application i which was heard ex parte and granted was for an advertisement of the petition in a Federal Gazette and one national daily newspaper and one other newspaper circulating in Lagos State. Consequent upon the order for advertisement, j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 431 a the petition was then advertised in the Guardian newspaper of Saturday, 19th April, 1994. The appellant saw it and became aware of it and on 26th April, 1994, filed a motion b on notice praying the court for an order:– “Staying further proceedings and striking out the petition herein on the ground that this Honourable Court has no jurisdiction to entertain same as it is not brought by the proper party in compliance c with section 410 of the Companies and Allied Matters Decree, 1990 and sections 37 and 38 of the Banks and Other Financial In- stitutions Decree, 1991.” The motion was supported by three-paragraph affidavit sworn to by the chairman of the respondent bank, Otunba d Williams Olufemi Ajayi. The application was heard by the learned trial Judge, Eigbedion J, on 1st June, 1994 and in a considered ruling on 28th June, 1994 he dismissed the respondent’s application in its entirety. This appeal is against e that order of dismissal. In this Court, both parties filed their briefs of argument. After going through the briefs of Counsel in this matter, it f appears to me that the parties are ad idem that the following issues arise for determination in this appeal:– 1. Whether the respondent as provisional liquidator of the appellant has locus standi to present a petition for g winding-up of the appellant. 2. Whether, in deciding the issue of locus standi, the learned trial Judge was entitled to look at the totality of the evidence before him or to confine himself to h the averments contained in the petition only. At the hearing of the appeal, the learned Counsel for the appellant adopted and relied upon his brief of argument. Learned Counsel in highlighting certain issues in the brief i submitted that it is not the intention of the law makers that the respondent shall be a petitioner in the winding-up of a company pursuant to section 38(3) of the BOFID. He pointed out that the purpose of that section is to make the j respondent the custodian only of the properties of the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 432 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. company concerned. On the provisions of section 425 of the a Companies and Allied Matters Act, 1990 (hereinafter referred to as CAMA) learned Counsel submitted that those provisions apply to winding-up by the court which exercises b the powers conferred upon it therein before the actual winding-up order is made. He further submitted that the Governor of the Central Bank of Nigeria has the power under the law to present a petition to wind up the appellant c company even after appointing the respondent as provisional liquidator pursuant to section 38(3) of BOFID. The learned Counsel however conceded that, even if the respondent had power to file a winding-up petition in the circumstances, it d could only file the petition in the name of the appellant. He finally submitted that the case of I.K. Martins Nigeria Ltd v. University Press Ltd (1992) 1 N.W.L.R. (Part 217) 322, referred to by the learned Counsel for the respondent in his brief, is not applicable to the circumstances of this appeal. e The learned Counsel for the respondent in reply adopted his brief, and then pointed out that the main issue in this appeal is the scope of section 38(3) of BOFID. Learned f Counsel then submitted that section 38(3) creates a nexus between CAMA and the BOFID in that, while section 422(1) of CAMA makes it clear that a liquidator may be appointed by the court for the purpose of conducting the g proceedings in a winding-up petition, section 38(3) of BOFID was meant to accelerate the winding-up proceedings in the public interest. Learned Counsel referred the court to the deed of appointment of the provisional liquidator in this h case and submitted that by virtue of section 422(9) of CAMA the appointment of the respondent as liquidator under section 38(3) BOFID, the powers of the directors of the appellant company ceased, and the respondent as liquidator stepped into their shoes and could exercise their pow- i ers including the right to file a petition for the winding-up of the appellant company. He then referred to the provisions of section 422(1), (2) and (7) of CAMA and submitted that the intention of section 38(3) of BOFID was to remove the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 433 a Central Bank from dealing with the failing bank once its banking licence was revoked. In a short reply, the learned Counsel for the appellant sub- b mitted that, where the appointment of the liquidator was improper, the directors were entitled to challenge such appointment. It is not in dispute that the two issues for determination in c this appeal are interwoven, i.e. one involves the other. The learned Counsel for the parties, in their respective briefs, attempted to deal with them separately. I shall also attempt to do so here, and I will take issue 2 first. The term “locus d standi” simply means standing to sue, i.e the right to institute legal action in a court of law. It is a threshold question which goes to the root of the whole of an action, and is a condition precedent to a determination of an action on the e merits (Thomas v. Olufosoye (1986) 1 N.W.L.R. (Part 18) 669; Pepple v. Green (1990) 4 N.W.L.R. (Part 142) 108 at 117). How then does it arise or how is it conferred on a party? In f Odeneye v. Efunuga (1990) 7 N.W.L.R. (Part 164) 618, Belgore JSC dealt with the issue at 639 of the report thus:– “A person will have legal capacity to sue in a matter in which it has been clearly shown to the Court that his rights or obligations g have been or are about to be or are in imminent danger of being violated or invaded or adversely affected by the act complained of – Omoloye v. A-G Oyo State (1987) 4 N.W.L.R. (Part 64) 267 at 209; Adesanya v. President of the Federal Republic of Nigeria h (1981) 5 S.C. 112; 149–150 (1981) 2 N.C.L.R. 358. The right to sue or locus standi can be conferred by the Constitution, Orogan v. Soremekun (1986) 5 N.W.L.R. (Part 44) 688 or a statute or by some customary law like a member of the family who can even without the consent of the other members thereof sue to enforce i his right to protect the family rights or property. Olowosago v. Adebanjo (1988) 4 N.W.L.R. (Part 88) 275; Melifonwu v. Egbuji (1982) 9 S.C. 145. Locus standi can exist in voluntary arrangement of mode of controlling relationship in a voluntary organisation whereby certain principles a group is averse to can be challenged j Thomas v. Olufosoye (1986) 1 N.W.L.R. (Part 18) 669. Whether in [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 434 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a chieftaincy matter Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part a 122) 377 or under the Constitution or a mere statute Emelogu v. State (1988) 2 N.W.L.R. (Part 98) 524; section 6(6)(b) of 1979 Constitution a party must show clearly that he has [a] right to protect and that his coming to court is to seek remedy so that the right b will not be violated” (italics mine). In the above quotation, what is relevant to this appeal is that locus standi can be conferred by a statute, in this case the c Companies and Allied Matters Act, 1990 (CAMA) or the Bank and Other Financial Institutions Decree, 1991 (BOFID), but cannot be presumed or implied. The next point is, in a case like this one where locus standi d of a party is challenged, what does a court look at or consider to determine the issue of locus standi. In the instant appeal, the learned Counsel for the respondent submitted that the whole case must be looked at and the learned Coun- e sel for the appellant submitted that only the averments in the winding-up petition should be looked at. In this respect, I refer to the case of Adefulu v. Oyesile (1989) 5 N.W.L.R. (Part 122) 377 at 410 where the Supreme Court per Obaseki f JSC held:– “In ascertaining whether the plaintiffs in an action have locus standi, the pleadings, i.e. the statement of claim must disclose a cause of action vested in the plaintiffs. Thomas v. Olufosoye g (1986) 1 N.W.L.R. (Part 18) 669 at 685 to 688 Para. B. The averment in the pleadings will disclose the rights and obligations or interests of the plaintiff which have been violated. Momoh v. Olotu (1970) 1 All N.L.R. 117; Oloriode v. Oyebi (1984) 1 S.C.N.L.R. 390 at 401, 406 and 407” (italics mine). h This decision was also followed in Odeneye v. Efunuga (supra) at 630–631. It appears to me therefore that in order to determine the locus standi of a plaintiff in an action, the court would have to consider the state of his pleadings, i i.e. the statement of claim in the action. The action before the trial court was a winding-up petition. It did not involve the filing of a statement of claim but, since the petition is the whole basis upon which the action was filed, it must j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 435 a necessarily disclose the cause of action vested in the petitioner – in this case the respondent. This answers issue 2. The main contention of the appellant in this appeal is that b the respondent has no locus standi to file the petition to wind up the appellant as it did. The appellant was a company to which the provision of the CAMA applies. Therefore, in order to determine this important issue, it is essential to c examine and properly consider all statutory provisions governing the filing or presentation to court of a petition for the winding-up of a company in Nigeria. Section 410 of the CAMA, which deals with the provisions d as to application for the winding-up of a company states in subsection (1) thus:– “An application to the Court for the winding-up of a company shall be by Petition presented subject to this section by:– e (a) the company:– (b) a creditor, including a contingent, or prospective creditor of the company; (c) the official receiver; f (d) a contributory; (e) a trustee in bankruptcy to or a personal representative of a creditor or contributory; (f) the commission under section 323 of the Decree; g (g) a receiver if authorised by the instrument under which he was appointed; or (h) by all or any of those parties together or separately.” From the above provisions, it is very clear that all the seven h persons or bodies listed in (a)–(g) can present a petition to wind up a company either individually or jointly with another or others in the list. The provisions of section 410 of CAMA have been ex- i tended by recent enactments in the BOFID particularly section 38 thereof which provides:– “38(1) Where the Governor makes an order revoking the licence of a bank and requiring the business of that bank to be wound up, the bank shall, within 14 days of the j date of the order, apply to the Federal High Court for an [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 436 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

order winding up the affairs of that bank and the Federal a High Court shall hear the application in priority to all other matters. (2) If the bank fails to apply to the Federal High Court b within the period specified in subsection (1) of this section, the Governor may apply to the Federal High Court for the winding up of the bank. (3) If the Governor is satisfied that it is in the public interest to do so, he may, without waiting for the period men- c tioned in subsection (1) of this section to elapse, appoint the Nigeria Deposit Insurance Corporation or any other person as the official receiver or as a provisional liquidator and the Corporation or such other person shall have the power conferred by or under the Companies d and Allied Matters Decree, 1990 and shall be deemed to have been appointed a provisional liquidator by the Federal High Court for the purpose of that Decree. (4) This section shall have effect and section 408 of the e Companies and Allied Matters Decree, 1990 shall be construed as if the revocation of the licence of a bank under this Decree had been included as a ground for winding up by the Federal High Court under that section. f (5) The liquidator of a licenced bank shall forward to the bank copies of any returns, which he is required to make under the Companies and Allied Matters Decree, 1990, and reference to liquidator in this subsection shall include a reference to the Nigerian Deposit Insurance g Corporation or any other person so appointed” (Italics mine). Under section 38 of BOFID quoted above, the bank whose licence is revoked and the Governor of the Central Bank of h Nigeria who revokes the licence are both empowered to file a petition for the winding-up of the affected bank. This by necessary implication has enlarged the provisions of section 410 of CAMA as regards the persons or bodies who can i present a petition for a winding-up of a company which includes a bank. The sum total of the submission of the learned Counsel for the appellant in his brief and orally in court is that the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 437 a respondent did not qualify and is not one of the persons or bodies empowered to file a winding-up petition either under section 410 of CAMA or section 38 of the BOFID. There- b fore, learned Counsel submitted, the respondent lacked the right or locus standi to file the petition to wind up the appellant company and the petition should be dismissed. The learned Counsel for the respondent on the other hand c submitted that by the combined effect of the provisions of CAMA read with those of BOFID concerning the winding- up of a company in Nigeria, the respondent is by virtue of those provisions empowered to present the petition for the d winding-up of the appellant. Learned Counsel relied particularly on the provisions of sections 410, 422 and 425 of CAMA and section 38 of BOFID. I will now examine these provisions. e I have earlier in this judgment reproduced section 410(1) of CAMA and section 38 of BOFID and said that the latter supplemented the former. It appears to me very clearly that by the provisions of section 38(1) and (2), the Governor of f the Central Bank and the appellant in this case can properly file or present the petition in court for the winding-up of the appellant bank – provided the conditions stated therein are satisfied. Neither of them presented a petition in this case. g Also by the provisions of section 38(3) of BOFID the said Governor may appoint the respondent or any person as official receiver or provisional liquidator and such appointment shall be deemed to have been made under the provisions of h CAMA and the respondent or any person so appointed shall have all the powers of a provisional liquidator appointed by the Federal High Court under the CAMA. The next point to consider therefore is what the powers of a provisional liqui- i dator appointed by the Federal High Court under the provisions of CAMA are. I have earlier found that in the determination of locus standi of a party it is the statement of claim which must be j considered, and in this case the petition for winding-up. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 438 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Paragraphs 8 and 9 of the petition, on page 2 of the record of a appeal read thus:– “8. The Governor of the Central Bank of Nigeria, in the exercise of his powers in accordance with the provisions of b section 38(3) of BOFID has appointed Nigeria Deposit In- surance Corporation as Provisional Liquidator following the revocation of the banking licence of the company. The Petitioner shall present the Deed of Appointment dated 21st day of January, 1994 at the hearing of this petition. c 9. The Petitioner, having been appointed Provisional Liquida- tor by the Governor of the Central Bank of Nigeria, in accordance with the provisions of section 38(3) of BOFID is deemed to have been so appointed by the Federal High d Court for the purpose of the Companies and Allied Matters Decree, 1990” (italics mine) It is not in dispute between the parties that the respondent was appointed provisional liquidator by the Central Bank e Governor pursuant to section 38(3) of the BOFID. There- fore, paragraph 9 of the petition must be taken as the true position in law. As I mentioned earlier, the only point in issue now is to ascertain the powers or rights of a f provisional liquidator appointed by the Federal High Court for the purpose of CAMA. Sections 422 of CAMA deals with the appointment by the court of a liquidator and his “terms of appointment”, so to g say, are also set out therein. Subsection (1) of that section empowers the court to appoint a liquidator or liquidators “for the purpose of conducting the proceedings in winding up a company and performing such duties in reference h thereto”. The learned Counsel for the respondent submitted that, since the respondent as provisional liquidator appointed by the court has the power to conduct proceedings in winding up the company, and since by section 415(2) such winding-up commences at the time of the presentation of the i petition, the respondent must necessarily have the power to present a winding-up petition. With due respect to the learned Counsel, I disagree with him. The appointment of a liquidator “for the purpose of conducting proceedings in j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 439 a winding-up of a company or performing such duties in reference thereto” in section 422(1) of CAMA does not and cannot be interpreted to mean that the liquidator so ap- b pointed has the power to file a winding-up petition. It appears to me particularly after reading section 422(2) that such appointments are normally made by the court after the presentation of a petition for winding-up. And by section c 422(3) it is apparently clear that such appointment can be made before the making of a winding-up order and even after making the winding-up order. All this goes to show that a liquidator may be appointed after the filing of a petition and even after the making of a winding-up order, under d the CAMA. Section 422(2) under which a provisional liquidator is appointed provides:– e “At anytime after the presentation of petition and before the making of a winding up order, the appointment shall be provisional and the Court making the appointment may limit and restrict the powers of the liquidator by the order appointing him” (italics mine). f The respondent is deemed to be appointed as provisional liquidator under this subsection by virtue of the provisions of section 38(3) of BOFID. This subsection clearly says that a provisional liquidator is appointed after the presentation of g a petition and before the making of a winding-up order. This clearly means that the respondent could not have filed the petition only to be appointed a provisional liquidator thereafter. It cannot be the correct legal position. This alone will h show that the respondent, as provisional liquidator, has no power or right to file a winding-up petition as it did in this case. Section 425 of CAMA, in my respectful view, only deals i with the powers and duties of a liquidator in a winding-up by the court and no more. I entirely agree with the learned Counsel for the respondent that the powers of a liquidator under the section are very extensive with regard to the con- j trol and management of the company being wound up but [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 440 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. this control is restricted under subsection (3) of section 425 a by the powers of court and is subject to challenge by any creditor or contributory of the company concerned. The powers and duties of a liquidator under this section appears b to me to be akin to those of an executor/administrator of the estate of a deceased person; so that whilst the administrator comes in to manage and control the assets of a deceased after his death, the liquidator comes in after a petition to c wind up the company is presented to the court. It is instructive to note that subsection (2)(h) of section 425 provides:– “do all such other things as may be necessary for winding up the affairs of the company and distributing its assets.” d This provision cannot under any stretch of the imagination be taken to mean an open or blank cheque for the liquidator to do anything in relation to the company, including the filing of a petition to wind it up. e The learned trial Judge in his ruling appealed against on page 26 of the record held that:– “. . . the powers of the directors cease on appointment of the liquidator. The bank becomes powerless to act for itself and hence the f liquidator must subrogate it. Since by section 410 of the Compa- nies and Allied Matters Act the company can bring a petition to wind up itself, the liquidator who has supplanted the directors can present a petition to wind up the company” (italics mine). g It is very clear to me that with the appointment of the respondent as provisional liquidator of the appellant company, all the powers of the director are determined and the provisions of section 422(9) of CAMA are applicable to the situa- h tion. This therefore means that as soon as the respondent was appointed a provisional liquidator of the appellant by the Governor of the Central Bank under section 38(3) of BOFID, the powers of the directors of the appellant company ceased until the Federal High Court orders the continu- i ance thereof. There was no such order made in this case. However, there is nothing in the provisions of BOFID to show that the powers of the directors are automatically transferred to the provisional liquidator. In my view, this is j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 441 a where the learned trial Judge fell into the trap and treated the respondent as having “supplanted the directors” and so acted as the bank itself in filing the petition under section 410 of b CAMA. This is a wrong assumption which is not backed up by any provision of the relevant law. What is more, without the act of the directors, in the circumstances of this case, the bank can be wound up on the application of any or more of the persons or bodies listed under paragraphs (b)–(g) of c section 410 of CAMA and under section 38(2) of BOFID by the Central Bank Governor. In any case, even if the respondent were to be entitled to file a petition, it can only do so in the name of the bank and not in its own name as provisional d liquidator. It would not be right therefore to say that because the powers of directors ceased after the appointment of the respondent as provisional liquidator, the bank cannot act for itself for the purpose of winding up of itself, and so the e liquidator had to take its place. It cannot be so and if it is intended that the provisional liquidator shall have the power to present a petition to wind up the bank, the law would have said so clearly. It did not say so and such power cannot in f my view be implied or presumed, as the learned trial Judge did in his ruling now on appeal. On page 26 of the record the learned trial Judge considered the form of the petition filed by the respondent and held that g by virtue of Rule 182 of the Companies Winding-up Rules made under section 635 of CAMA, he was unable “to see any injustice in the commencement and prosecution of the action so far”. Commenting on the form of the petition, the h learned trial Judge said:– “It shows that the Petitioner brings the action as a substitute to the company by virtue of its appointment as a Provisional Liquidator to the company, the company’s powers having been eroded or taken away by the appointment. Even if there has been some errors i in the wording of the petition, the substance shows that the Peti- tioner brings the action for and on behalf of the company as its provisional liquidator.” I must say that this comment on the form of the petition filed j by the respondent was unnecessary and uncalled for. The [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 442 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. issue as to the form of the petition was not the bone of con- a tention before him. What was contested before him was the issue of jurisdiction. Be that as it may, even if he was right in examining the form of the petition, what it required here b was that the petition had to show on its face that the respondent as petitioner had locus standi to file the petition. But the petition only provided in paragraphs 8 and 9 (earlier reproduced in this judgment) that the respondent was ap- c pointed provisional liquidator by the Governor of the Cen- tral Bank under section 38(3) of BOFID and that the appointment was deemed to have been made by the Federal High Court under CAMA. This did not show that on the face d of the petition, the respondent had locus standi to file a petition for the winding-up of the bank. And the finding of the learned trial Judge, that the respondent brings the petition “as a substitute” to the company” or “for and on behalf e of the company” has not improved the position of the respondent any further. I also agree with the submission of the learned Counsel for the appellant in his brief that the issue of locus standi which goes to the question of jurisdiction cannot be a matter of form; it is a matter of substance which in f this case must be disclosed in the petition (see Thomas v. Olufosoye (supra); Senator Adesanya v. The President of the Federal Republic of Nigeria (1981) 2 N.C.L.R. 358; (1981) 5 S.C. 112; (1981) 1 All N.L.R. 32; Gambioba and 6 others g v. Esezi II and others (1961) 1 All N.L.R. 584). The learned Counsel for the respondent referred to the marginal notes to section 38 of BOFID and submitted in his h brief that the powers in section 38(1) and (2) were subsumed in section 38(3) with all the attendant consequences. I entirely disagree with him. The marginal note to any section or provision of the law gives an indication or information of what one may find mentioned in the particular section or i provision. It does not necessarily mean that the marginal notes will in all cases cover what the section or provision is all about. It only gives an idea of what the section or provision is dealing with. Therefore, when the marginal notes to j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA Financial Merchant Bank Ltd v. Nigerian Deposit Insurance Corp. 443 a section 38 BOFID read, “application to the Federal High Court for winding up” and such application can be made by virtue of section 38(1) and (2), that is enough and not neces- b sary that the marginal notes must apply to all the parts of the section. In any case, it is trite that marginal notes do not form part of a statute. I hold that this position applies here. In sum, I find that there is no clear provisions in the c CAMA or the BOFID in which the provisional liquidator appointed under CAMA or under BOFID (as in the instant appeal) is empowered by law to present a petition for the winding-up of company or bank. Such a power or right d cannot in my respectful view be implied or presumed under the said law. The case of Busari v. Oseni (1992) 4 N.W.L.R. (Part 237) 557 at 586 cited by learned respondent’s Counsel at page 12 of his brief does not apply. e I have no doubt in my mind that the special provisions of BOFID are unique in the history of company laws in this country. They are made with good intentions to deal with failing banks or companies which are rampant these days in f Nigeria. It is my view that the intention of the law is to protect the interests of the shareholders and depositors in the failing banks and companies by appointing a liquidator to stop the dissipation of assets of the bank and enable the liquidator to handle them and administer them in accordance g with the law. But if it is the intention of BOFID to empower a liquidator to present a petition to wind up a bank, it would have made such provisions. It cannot, in my view, be presumed or implied that, since the directors’ powers ceased to h exist after the appointment of the provisional liquidator under section 38(3) of BOFID, the liquidator takes over the bank and can wind it up. This view cannot in my opinion be supported from the provisions of either CAMA or BOFID. i For the reasons stated above. I find that this appeal succeeds and it is allowed. I set aside the order of the learned trial Judge made in his ruling on 28th June, 1994. Having found that the respondent has no locus standi to present the j petition in the trial court, the trial court had no jurisdiction to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Kalgo JCA 444 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. entertain the matter and I hereby strike out the petition. I a award N2,000 costs in favour of the appellant against the respondent. PATS-ACHOLONU JCA: I have read in draft the judgment of b Kalgo JCA and I agree with him. I will, however, add a few words. It would seem to me that on the appointment of a provisional liquidator by the Central Bank, the powers formerly exercisable by the erstwhile board become automati- c cally vested or transferred to their provisional liquidator. This is the only meaning that in the circumstances of the case can be inferred as the intention of the legislature. Hav- ing said that, care must be taken in appreciating the nuances d of the matter. For, though the board of the bank has ceased to exist, the company is still in existence and the provisional liquidator does not replace the company for the purpose of initiating winding-up proceedings. The persons who may e bring a winding-up proceeding of a company are amply stated in section 410 of CAMA. If the intention of the provision is to include the provisional liquidator then the act should have said so. This may well account for why profuse f provision as to the persons or bodies that might bring winding-up proceedings was made. I am of the view that, notwithstanding the powers or functions of the provisional liquidator, the other bodies men- g tioned in section 410 aforesaid stand either separately or in unison as the only competent bodies to bring winding-up proceedings. I too dismiss the appeal with costs assessed at N2,000. h AYOOLA JCA: I have had the privilege of reading in advance the judgment just delivered by my learned brother, Kalgo JCA. I agree with his conclusion that the appeal should be allowed and with the reasoning by which he ar- i rived at that conclusion. I have nothing to add. I too would allow the appeal with costs against the respondent as ordered by Kalgo JCA. Appeal allowed. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 445 a United Bank for Africa Limited v. Michael O. Abimbolu and Co. b COURT OF APPEAL, LAGOS DIVISION MUHAMMAD, PATS-ACHOLONU, UWAIFO JJCA

Date of Judgment: 6 JULY 1995 Suit No.: CA/L/229/92 c Banking – Loans, advances and interest – Recovery of – Limitation of time – When does time start to run Limitation of action – Banking – Loans, advances and interest thereon – Recovery of – When does time begin to run d Facts The plaintiff/appellant bank at the lower court brought this e action claiming the sum of N14,553.66 being the balance of overdraft facilities and interest on the said sum. The defence pleaded the statute of limitation claiming in effect that the action was statute barred. f This defence was upheld by the court even though the defendants was not present to advance in support of this pleading and dismissed the case. Dissatisfied with this judgment the bank went on appeal to the Court of Appeal arguing that g the action was not statute barred as the loan facility was a continuing one. Section 8(1)(a) of the Limitation Law (Cap 70) Laws of Lagos State, 1973 refers:– h “8(1) The following actions 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. i (b) . . . (c) . . . (d) . . . j (e) . . . [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

446 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Section 8(6) that:– a “No arrears of interest in respect of any debt shall be recovered after the expiration of six years from the date on which the interest became due.” b Held – 1. In this case the relationship between the appellants and the respondent is that of banker and customer or creditor c and debtor. Such a relationship is based on a simple contract. 2. Going by section 8(1)(a) of the Limitation Law (Cap 70) Laws of Lagos State read along with section 8(b), inter- d est due on an overdraft or bank loan cannot be recovered after six years on which it became due. The principal sum a fortiori will not be recovered after six years of the cause of action. e 3. A customer cannot sue his bank for money deposited with it until a demand is made, but such a demand does not seem necessary in law when a bank seeks to recover its loan unless there is an agreement to that effect, al- f though in practice such demand is usually made. 4. For the purpose of the statute of limitation, time begins to run from the date of an advance even when the advance is guaranteed, but as guarantees usually contain a g clause demanding payments, the limitation period will not begin to run against a guarantor or surely until the demand is made. h 5. However, the demand clause in guarantees will not affect the person guaranteed who could rely on the statute of limitation from the time the advance or the last of the advances was made. i 6. As the interest was from time to time added to the principal, it became itself part of the principal and the limitation period apply to both. Appeal dismissed. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 447 a Cases referred to in the judgment Nigerian b A-G v. John Holt and Co (1911–1914) 2 N.L.R. 1 Eboige v. NNPC (1994) 5 N.W.L.R. (Part 347); (1994) 18A L.R.C.N. 54 Finnih v. Imade (1992) 1 N.W.L.R. (Part 219) 511 c National Bank v. P.B. Olatunde and Co Ltd (1994) 3 N.W.L.R. (Part 334) 512; (1994) 16 L.C.R.N. 66 Yusuf v. Co-operative Bank Ltd (1994) 7 N.W.L.R. (Part d 359) 676 Foreign Bradford Old Bank Ltd v. Sutcliffe (1918) 2 K.B. 833 e Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110 Parr’s Banking Co Ltd v. Yates (1898) 2 Q.B 460 at 464– 465 Walton v. Mascall 13 M. and W. 458 f Nigerian statute referred to in the judgment Limitation Law (Cap 70) Laws of Lagos State 1973, section 8(1)(a), 8(6) g Books referred to in the judgment Paget’s Law of Banking (8ed) page 82 h Chitty on Contracts (33ed) Volume 1, paragraph 1627 Counsel For the appellant: Iwuji i For the respondent: Adeyi-Odunbaku

Judgment MUHAMMAD JCA: (Delivering the lead judgment) United j Bank for Africa Limited as plaintiff at the High Court of [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 448 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Lagos State claimed from the defendant, Michael Abimbolu a (trading as Michael Abimbolu and Co), the sum of N14,533.66 being the balance of overdraft facilities granted to him by the plaintiff as at 27th July 1974, at 13% per annum b from the date of the writ of summons until 1984 and interest on the said sum at the rate of payment/judgment. After pleadings were settled, the suit was set down for hearing on 20th April, 1989. On that date, it was only the plaintiff who led c oral evidence in support of its case. Both the defendant and his Counsel were not in court. So no evidence was adduced on behalf of the defence. The learned trial Judge in his considered judgment dismissed the claim of the plaintiff. d Dissatisfied with the judgment, the plaintiff as appellant herein, appealed to this Court. In its notice of appeal, the appellant set out two grounds of appeal. Briefs of argument e were later filed and exchanged. In its brief of argument, the appellant formulated two issues for determination by this Court. The issues are as follows:– “1. Whether, on the facts, and in law, the learned trial Judge f was right in dismissing the plaintiff/appellant’s claims, and awarding judgment to the defendant/respondent who neither participated nor gave evidence at the trial, particularly when the learned trial Judge saw the duty on a party who filed a defence to appear and defend it and yet saw the necessity g not to overlook a filed document (that is to say, the defendant/respondent’s statement of defence) when such document was neither tendered in open court nor its veracity tested by cross-examination. h 2. Whether on the facts and in law, the learned trial Judge was right in dismissing the plaintiff/appellant’s claims, and awarding judgment to the absent defendant/respondent on the basis of a mere alternative assertion, without any stated particulars in his filed statement of defence that the debt i was statute barred when in his absence from the trial, there was no evidence in court to establish this and when the nature of the relationship giving rise to the plaintiff/ appellant’s claims against the defendant/respondent could not be delimited by time, being a continuing one.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA United Bank for Africa Limited v. Michael O. Abimbolu and Co. 449 a The respondent on his side formulated the following issues:– “1. Is the trial Judge entitled at all to consider the defendant’s statement of defence in the light of the evidenced adduced. b In support therefore by the plaintiff himself at the trial even though the defendant himself did not participate in the trial? 2. If the answer to the issue 2.1 is in the positive, whether there was any evidence adduced by the only witness PW1 c which supports the defendant’s defences set up in the statement of defence or put conversely could it be said in the light of the evidence adduced at the trial in the court below, that the decision of the trial Judge was based ‘on mere assertion’ contained in the defendant’s statement of de- d fence? 3. Whether the plea of limitations was sufficiently pleaded. 4. Assuming that the statute of limitation was not pleaded with due particulars whether there was before the trial Court suf- e ficient evidence of particulars needed to sustain the plea. 5. Assuming, without conceding, that the learned trial Judge was wrong to have dismissed the plaintiff’s/appellant’s claim on the ground that the claim is statute barred, whether f there are grounds appearing in the judgment on the basis of which the judgment of the learned trial Judge can be affirmed by this Honourable Court.” The appeal came before this Court for hearing on 20th April, g 1995. C.S.I. Iwuji, Esquire, appeared on behalf of the appellant. J.K. Adeyi-Odunbaku, Esquire, appeared for the respondent. Each Counsel for the respective parties adopted and relied on his brief of argument. Arguing the appeal, h learned Counsel for the appellant submitted that the respondent was granted the loan facility in 1974 and it was a continuing facility. He cited exhibit G in support thereof. He made reference to Chitty on Contracts (33ed) Volume 1. He i further submitted that the application of the limitation of law was excluded by the agreement entered by the plaintiff and the guarantor as contained in exhibit G. He cited a number of cases including Boshali v. Allied Commercial Exporters j Limited (1961) 2 S.C.N.L.R. 322; (1961) All N.L.R. 917, [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 450 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. in support of his submissions. Learned Counsel for the re- a spondent, who earlier on filed a notice of intention to rely upon preliminary objection at the hearing of this appeal that the notice of appeal dated 17th July, 1989 was incompetent b in law and ought to be struck out, withdrew his notice of preliminary objection. This court accordingly struck out the notice of preliminary objection. Learned Counsel relied on another notice of intention to contend that the judgment of c the trial court should be affirmed on grounds other than those relied on by the trial court. He brought this notice under Order 3 Rule 14(2) of the Court of Appeal Rules, 1981. He premised his argument on this notice on the d ground that the evidence adduced by the plaintiff/appellant at the trial was at variance with the plaintiff’s/appellant’s claim per writ of summons and statement of claims. In his reply to this, the learned Counsel for the plaintiff/appellant e contended that the variance between the averments in the plaintiff’s statement of claim and the evidence in support was part of the basis for the trial Judge’s decision. There was therefore no difference between the trial Judge’s posi- f tion and the other ground now being sought to be relied upon by this Court to affirm the decision. Learned Counsel for the respondent further argued that the learned trial Judge came to his decision as a result of the g plaintiff’s statement of claim. The loan, he contended, was statute-barred and this fact was pleaded in section 6 of his statement of defence. The Lagos State Limitation Law of 1966, Cap 70, section 8(a)–(d) was applicable in the situa- h tion. He cited the case of N.N.S.L. v. Emenike (1987) 4 N.W.L.R. (Part 63) 77, to support his submissions. In an attempt to answer the issues raised above, I shall try, as far as is convenient, to cover the issues formulated by the i appellant in a juxtaposed position with the ones formulated by the respondent. The appellant’s issue no. 1 questions the trial Judge’s right in dismissing the plaintiff’s/appellant’s claim in the lower court when the trial Judge should have j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 451 a had no alternative but to enter judgment in favour of the plaintiff/appellant, as it was the plaintiff alone that led oral evidence to establish its claim, without the defen- b dant/respondent calling any evidence. I think the general proposition of law is that it is always the duty of the party who desires a court of law to give judgment in his favour as to any of his legal rights or liabilities which are dependent c on the existence of facts which he asserts to prove that those facts exist. The burden of proof thus lies on him (section 135 of the Evidence Act (Cap 112) Laws of the Federation of Nigeria, 1990). d The plaintiff/appellant in paragraph 4 of its statement of claim made an assertion of the existence of some facts as follows:– e “In the normal course of banker and customer relationship the defendant applied for and was granted by the plaintiff overdraft facilities in the sum of N3,000,000 (Three Thousand Naira); N5,000 (Five Thousand Naira) respectively, amounting to a total of N18,000 (Eighteen Thousand Naira), with interest at a rate of 13% f per annum.” From the averment in paragraph 4 of the statement of defence, the defendant denied ever applying for nor was he granted overdraft facilities in the sum of N5,000 and g N10,000 with any interest at all. I think the parties have properly joined issues in this respect. Where issues are joined, evidence has to be led. And according to the finding of the learned trial Judge, the plaintiff was unable to produce h any evidence to prove paragraph 4 of its statement of claim. The averment in paragraph 4 of the statement of claim therefore remained as an allegation only. Olatawura JCA, in National Bank v. P.B. Olatunde and Co Ltd (1994) 3 i N.W.L.R. (Part 334) 512 at 528; (1994) 16 L.C.R.N. 66 at 82 stated inter alia:– “It is not sufficient to make allegations in pleading as was done by the plaintiff in this case. Credible evidence must be led in proof of j it.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 452 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Section 135 of the Evidence Act (Cap 112) Laws of the a Federation of Nigeria, 1990 provides:– “(1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which b he asserts must prove that those facts exist.” It follows naturally therefore that where a plaintiff has failed to establish a right he is claiming, the trial court cannot gratuitously grant him such right as the court is not a chari- c table organisation; its duties in civil cases are to render unto everyone according to his proven claim (see Etim Ekpen- yong and 3 others v. Inyang Effiong Nyong and 6 others (1975) 2 S.C. 71 at 80–81. The dismissal of that statement as d averred in paragraph 4 of the statement of claim by the trial court was, in my view, rightly done. In this respect therefore, issue no. 1 formulated by the appellant has to fail and I so hold. e The main argument of appellant’s Counsel on issue no. 2 formulated by him is that the overdraft granted to the respondent by the appellant was not statute-barred as no spe- f cific provision of the statute of limitation was specially pleaded. Secondly, lapse of time, according to learned Counsel for the appellant, merely bars the plaintiff’s remedy but does not extinguish his right. Learned Counsel cited the g case of Attorney-General v. John Holt and Co and others (1911–1914) 2 N.L.R. 1 at 21. He also called in aid the Limitation Act No. 88 of 1966. He further contended that as the N3,000 overdraft facility was guaranteed a relationship h of principal and surety was created between the respondent and the surety wherein the latter made an undertaking to effect payment on demand. He finally submitted that the overdraft facility was a continuing one. i Learned Counsel for the respondent, on the other hand, argued that the Statute of Limitation was sufficiently pleaded in paragraph 6 of the defendant’s/respondent’s statement of defence. He maintained that section 73(1)(a) of the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 453 a Evidence Act required all courts of law to take judicial notice of all enactments such as the Limitation Law. It is clear from the decision of the court below that the trial b Judge made a finding that the defendant/respondent had a good defence to the action instituted by the plaintiff/ appellant especially as contained in the averments in paragraphs 5 and 6 of the statement of defence. Paragraph 6 of c the statement of defence for instance states:– “Further and in the alternative to paragraphs 4 and 6 of the statement of claim, the defendant pleads that the debt is statute-barred.” d Before looking at the merit or otherwise of the defence raised in paragraph 6 of the defendant’s/respondent’s statement of defence, I feel I should not gloss over an issue of paramount importance in the determination of the issue e under reference, i.e the exact overdraft found by the trial Judge to have been granted to the defendant/respondent. The trial Judge made the following finding:– “It is true the overdraft facility was granted on the 20th of June, f 1974 according to exhibit ‘B’. What was granted was N3,000 against N18,000 which was alleged in paragraph 4 of the statement of claim as having been overdrawn.” I am in total agreement with this finding of the lower court g as there was no denial of this amount by the defendant/ respondent. There is rather an implied admission of the said amount by the defendant/respondent. This is quite deduce- able from the averments contained in paragraphs 4 and 5 of h the defendant’s statement of defence which are hereunder reproduced:– “4. With particular reference to paragraph 4 of the statement of claim, the defendant avers that he never applied for nor was i he granted overdraft facilities in the sum of N5,000 and N10,000 with any interest at all. 5. In reference to paragraph 5 of the statement of claim the defendant says the only overdraft he applied for was the sum of N3,000 which had since been repaid before he en- j tered the Lagos State Civil Service in 1976.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 454 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

There is, therefore, no issue between the parties in respect of a the N3,000 overdraft. This requires no further proof (see section 75 of the Evidence Act). What appears to be in dispute is whether this amount was ever repaid to the appel- b lant. The trial court’s finding on this overdraft is that it was never paid back to the plaintiff/appellant as against the claim of the defendant/respondent in paragraph 5 of the statement of defence that he had repaid the overdraft before joining the c Lagos State Civil Service. Now as the burden of proof in civil suits is not static, it shifts, a situation had arisen whereby it was the duty of the defendant/respondent to prove that he actually effected re- d payment of the said overdraft. The learned trial Judge made a note of this also. Surprisingly, however, the learned trial Judge glossed over this issue and proceeded to consider the defendant’s plea of limitation of time. I am of the view that e the trial Judge was wrong as he ought not to have given weight to an unsubstantiated averment in the defendant’s statement of defence. Since there was no oral or documentary evidence to prove repayment of the said overdraft as f alleged by the defendant, the averment in that respect goes to no issue. It is trite law that it is insufficient to make an allegation in a pleading. Credible evidence must be led in proof of it (see National Bank v. P.B. Olatunde and Co Ltd (1994) 3 N.W.L.R. (Part 334) 512; (1994) 16 L.R.C.N. 66 at g 82. Since there was a clear admission on the overdraft of N3,000 the repayment of which was in no way established, I think the plaintiff/appellant has a genuine cause of action ordinarily. The dictum of the learned trial Judge bears this h out where he stated:– “This however does not mean that the plaintiffs do not have a right of action or that they cannot recover what they have proved.” This no doubt entitled the plaintiff/appellant to a cause of i action. But whether the plaintiff/appellant has a right of action is what the trial court determined in the negative because of the defence of statute of limitation raised by the defendant. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 455 a A distinction must be drawn, however, between a cause of action and a right of action. A cause of action constitutes a set of facts or facts which gives a person a right to claim a b judicial redress where he is wronged whereas a right of action, on the other hand, entitles him to maintain an action on the wrong alleged with a view to getting a judicial redress (see Yusuf v. Co-operative Bank Ltd (1994) 7 N.W.L.R. c (Part 359) 676 at 697A–B per Bello CJN quoting Oputa JSC in Egbe v. Adefarasin (No. 2) (1987) 1 N.W.L.R. (Part 47) 1. Thus, even though the plaintiff/appellant may have both a cause of action and a right of action, such right can be lost where it is not claimed timeously. d Now let me turn to the defence of statute of limitation raised in paragraph 6 of the statement of defence. The learned trial Judge made a finding that there were “good e defences to the action” having regard to the evidence before him. The only evidence before the trial court was that of the plaintiff’s representative, one Mr Simeon Babaniyi Sina, through whom exhibits B and F were admitted in evidence by the trial court. And from these exhibits, the trial court f was satisfied that the overdraft facility was granted on 20th June, 1974, and that the first demand for liquidation of the overdraft was made on 13th July, 1984. g From the facts in the record of proceedings made available before this Court, the relationship between the appellant and the respondent is that of banker and customer or creditor and debtor. Such a relationship is based on a simple contract. Section 8(1)(a) of the Limitation Law (Cap 70) Laws of h Lagos State, 1973 reads:– “8(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued:– i (a) Actions founded on simple contract. (b) . . . (c) . . . (d) . . . j (e) . . .” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 456 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

This should be read along with section 8(6) that: “No arrears a of interest in respect of any debt shall be recovered after the expiration of six years from the date on which the interest became due.” In order to appreciate how the limitation pe- b riod affects advances made to a customer by a banker, interest due on an overdraft or bank loan by virtue of section 8(6) cannot be recovered after six years on which it became due. The principal sum, a fortiori, will not be recovered after six c fears of the cause of action. The question is, when does the statute run in respect of an advance or a loan made to the customer? The authorities are agreed that a customer cannot sue his bank for money de- d posited with it until a demand is made (see Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110; Yusuf v. Co- operative Bank Ltd (1994) 7 N.W.L.R. (Part 359) 676). Some reasons are given for this which I need not go into e here. But such a demand does not seem necessary in law when a bank seeks to recover its loan unless there is an agreement to that effect, although in practice such demand is usually made. In Walton v. Mascall 13 M. and W. 458, f Parke B said:– “It is clear that a request for the payment of a debt is quite immaterial, unless the parties to the contract have stipulated that it shall be made; if they have not, the law requires no notice or request; but the debtor is bound to find out the creditor and pay him the debt g when due.” This observation was cited with approval by Atkin LJ in Joachimson v. Swiss Bank Corporation (supra) at page 128. h For the purpose of the statute of limitation, there is authority that time begins to run from the date of an advance even when the advance is guaranteed (see Paget’s Law of Banking (8ed) page 82. In Parr’s Banking Co Ltd v. Yates (1889) 2 i Q.B. 460 at 464–465, A.L. Smith LJ said:– “The guarantee, which was given in February, 1887, was to be a continuing guarantee of the money owing to the plaintiffs by a customer upon his current account with them. Subsequent to the giving of the guarantee the account was operated upon by further j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 457 a drawings by the party guaranteed, and further advances were made to him from time to time down to the end of 1890. After that period no further advances were made to him, but interest on the amount standing to his debit and commission were from time to b time paid in sums against the amount of his liability to the bank. So things went on till June, 1897, when the amount owing by him to the plaintiff was £1979.1.6d. The plaintiffs on September 3rd following brought this action upon the guarantee to recover the c amount remaining due from the guaranteed party upon the account, and the defendant in answer to the action sets up the Statute of Limitations. I am of opinion that as regards the money advanced the plaintiffs’ actions is not maintainable. I need not read the guarantee again. In the result I think that, upon the true con- d struction of it, no advances having been made for a period of more than six years before the date of the writ in the action, the plaintiffs’ right of action in respect of the advance is barred by the Stat- ute of Limitation.” e All the Lord Justices agreed that, as the interest was from time to time added to the principal, it became itself part of the principal and the limitation period applied to both. This principle was, however, slightly amended in Bradford f Old Bank Ltd v. Sutcliffe (1918) 2 K.B. 833 as regards the guarantor. This is to the effect that, as guarantees usually contain a clause demanding payment, the limitation period will not begin to run against the guarantor or surety until g after demand is made. But that will not affect the person guaranteed who could rely on the statute of limitation from the time the advance or the advances were made. In the present case the N3,000 was granted on 20th June, 1974. h Action was brought to recover it after 10 years. It may well be that the guarantor would have been liable if sued. It has already been seen above that the trial court declared that the plaintiff/appellant had no right of action as action i was statute- barred. Learned Counsel to the appellant argued extensively in his brief that lapse of time merely bars the plaintiff’s remedy and does not extinguish his right. He further argued that any such limitation provision must be j specially pleaded. Learned Counsel cited in support [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 458 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. paragraph 1627 of Volume 1, Chitty on Contracts (33ed) a and the case of Attorney-General v. John Holt and Co and others (1911–1914) 2 N.L.R. 1 at 21 as per Osborne CJ. I had a perusal at the dictum of Lord Justice Osborne as in b the referred case above. My understanding of that dictum with due respect to the view held by Counsel to the appellant is that that was purely dealing with an English statute of general application as borne out by the dictum itself:– c “This, he contended, means statutes which were of general application not in England, but in the Colonies . . . Moreover it has been held in this Court and on the Gold Coast, where an analogous provision is (sic) in operation that the Statutes of Limitation, d which are essentially statutes, founded on grounds of public policy and not mere statutes regulating procedure, do apply, and as a matter of practice they are often pleaded” (italics supplied). Even though the respondent conceded that the statute of limitation was not pleaded with due particularity one may e still ask whether that can render the general defence raised in paragraph 6 of the statement of defence as incurably defective such that the learned trial Judge ought not to have adverted to it. I think the answer is in the negative. This is f because it is well settled that every pleading must state facts and not law. A party is not expected to plead conclusions of law or mixed fact and law. Conclusions of law can, however, be drawn from material facts pleaded. The material g fact pleaded in this case is that “the debt” is statute-barred. In a simple debt contract, I think this fact so pleaded is solid enough to attract the attention of the trial Judge. I think, too, it is unnecessary for the defendant to set out in his pleading h contents of a public statute. It is held by the Supreme Court that:– “The question of the law applicable may be cited to the court by learned Counsel or may come from the industry or research of the i Judge.” See Finnih v. Imade (1992) 1 N.W.L.R. (Part 219) 511 at 537 per Karibi-Whyte JSC. Thus, as long as the issues on which the judgment is based are findings of facts arising j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA United Bank for Africa Ltd v. Michael O. Abimbolu and Co. 459 a from the pleadings and evidence before the court the fact that the court has in the determination of the issues applied a principle of law not cited by learned Counsel will not affect b the decision. This has always been accepted law (see Finnih v. Imade (supra). “It is strange” observed Karibi-Whyte JSC in the above case, “to say that the Judge cannot apply principles not referred to by Counsel”. c Now having identified in the process of determining the suit before him that the statute of limitation applicable was “the Limitation Law Cap 70”, the trial Judge went ahead to determine the suit under section 8(1) and which barred cer- d tain actions including the action before him after a period of six years. I entirely agree with this finding of the trial Judge that the action before him was statute barred. The appellant therefore had no right of action. It has been said times with- e out number that where an action is statute-barred, a plaintiff who might have had a cause of action loses the right to enforce the cause of action by judicial process because the period of time laid down by the Limitation Law for institut- f ing such an action has elapsed. An action commenced after the expiration of the period within which an action must be brought as stipulated in a statute of limitation is not maintainable. In other words, when the statute of limitation in g question prescribed a period within which an action must be brought, legal proceedings cannot be properly or validly instituted after the expiration of the prescribed period (see Eboige v. NNPC (1994) 5 N.W.L.R. (Part 347); (1994) 18A h L.R.C.N. 54 at 64). Having considered the issues so far, I am content to say that the absence of a defendant or his representative at a trial cannot be prejudicial to the position being presented by the i defendant prior to pronouncement of judgments where the plaintiff had failed to establish a case against the defendant. Statutes of limitations form part of laws or enactments having the force of law in this country. Sections 73 and 74(1) of j the Evidence Act (Cap 112) Laws of the Federation of [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Muhammad JCA 460 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Nigeria, 1990, have empowered all courts of law in this a country to take judicial notice of such enactments/laws and they require no proof. It was therefore right for the trial Judge to rely on the Limitation Law. b I feel my discussions above has covered the respondent’s notice of intention to contend that judgment should be affirmed on grounds other than those relied on by the trial c Court and its corresponding reply by the appellant. I consider it fruitless to repeat what has already been said. In view of the foregoing I find it difficult to disagree with the judgment of the learned trial Judge. I accordingly affirm d the said judgment and dismiss this appeal. I award N2,000 costs to the respondent. UWAIFO JCA: I read in advance the judgment of my learned brother, Muhammad JCA, just delivered and for the e reasons he has given I agree that the appeal lacks merit. In the present case the loan of N3,000 to the respondent was made in June, 1974. The obligation by him to repay the f loan as a borrower commenced from that very day. The cause of action of the appellant to recover the loan arose from that very day. The cause of action of the appellant to recover the loan arose also from the very day in the absence g of any agreement that a demand be made in order for a cause of action to be established if the parties did not stipulate by contract (see Parr’s Banking Co Ltd v. Yates (1898) 2 Q.B. 460 at 464; Joachimson v. Swiss Banking Corporation h (1921) 2 K.B. 110 at 128). The limitation period therefore began to run from June, 1974. This action was not commenced until July, 1984; that is over 10 years. The limitation period for such a contract is six years by virtue of section i 8(1)(a) of the Limitation Law (Cap 70) Laws of Lagos State, 1973. The action was therefore statute-barred. I too dismiss the appeal with N2,000 costs to the respondent. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

United Bank for Africa Limited v. Michael O. Abimbolu and Co. 461 a PATS-ACHOLONU JCA: I have read in draft the judgment of Muhammad JCA and I agree with his conclusion. The appellant appeared not to have made a good impression by his b inability to prove his case. The appeal therefore fails and is hereby dismissed with costs which I assess at N2,000. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

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a Progress Bank of Nigeria Limited v. Ugonna (Nig.) Limited b COURT OF APPEAL, PORT-HARCOURT DIVISION ROWLAND, EDOZIE, ONALAJA JJCA Date of Judgment: 13 JULY 1995 Suit No.: CA/PH/160/90

Banking – Cheque – Dishonour of when account is in funds c – Breach of contract Banking – Cheque – Proceeds of paid into account – When can be available to customer d Negligence – Definition of

Facts In Suit No. A/59/86 at the Aba High Court, the plaintiff’s e claim against the defendant was for the sum of N500,000.00 damages for breach of contract and negligence. Pleadings were ordered, filed and exchanged. With the leave of the court below the plaintiff filed an amended statement of f claim and a further amended statement of claim. The defendant also filed an amended statement of defence with the leave of the lower court. At the hearing of the matter before Mbachu J one witness each testified for the plaintiff and for the defendant. At the conclusion of the case the learned trial g Judge found for the plaintiff and awarded it the sum of N100,000.00 as general damages with N800.00 costs. Ag- grieved and dissatisfied with the judgment of the trial court the defendant, hereinafter called the appellant, appealed to h the Court of Appeal. The respondent’s case was that it was a customer of the appellant and maintained a current account with the appellant at the appellant’s branch at 198 Faulks Road, Aba. The i respondent stated that the appellant owed it a statutory duty to keep its account and receive cheques and moneys paid into the said account and credit moneys and advise the respondent accurately and promptly accordingly and also to j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 463 a honour cheques issued by the respondent and effect payments. The respondent contended that on 21st January, 1986, it issued a cheque for the sum of N120 to the Aba b Sports Club. The respondent claimed that it issued the said cheque in the belief that its account with the appellant was in credit. It was the case of the respondent that on 22nd Janu- ary, 1986 the said Aba Sports Club to whom the said cheque c was issued to duly presented it for payment but the appellant refused to honour the cheque and negligently and wrongfully marked on the said cheque R/D which means “Refer to Drawer” and then returned the same as so marked to the Aba d Sports Club. The respondent therefore claimed the sum of N250,000 as general damages for breach of contract and the same amount aforesaid as general damages for negligence. The total sum claimed by the respondent from the appellant e was N500,000. The appellant’s case was that the respondent’s cheque was dishonoured because the respondent did not have enough credit to its account. The appellant denied liability and con- f tended that the outstanding credit balance in the respondent’s account fell short of the amount drawn by the respondent. It was the contention of the appellant that the respondent paid into its account two instruments, namely, an g up-country cheque for the sum of N10,500 and a dividend warrant of N77.35 and that these instruments had not been cleared and credited to the respondent before the respondent issued the said cheque for N120 to the said Aba Sports Club h and which said cheque was presented and dishonoured as a result of insufficient fund in the respondent’s account. The learned trial Judge gave judgment in favour of the respondent. He held that the respondent proved its case on a i preponderance of evidence. Held – 1. The proceeds of a cheque paid into an account in a bank j are not available until reasonable time is allowed for the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

464 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

necessary bookkeeping operations to be carried out and a necessary time is also allowed to clear the cheque. 2. The refusal by a banker to pay a customer’s cheque when the banker holds in hand an amount equivalent to b that endorsed on the cheque belonging to the customer amounts to a breach of contract for which the banker will be liable in damages. 3. Negligence in law means the omission to do something c which a reasonable man guided upon the consideration which ordinarily regulates the conduct of human affairs would do or doing something which a prudent and reasonable man would not do. d 4. What amounts to negligence depends on the facts of each particular case as the categories of negligence are never closed. e Appeal allowed.

Cases referred to in the judgment Nigerian f Akinola v. Oluwo (1962) 1 S.C.N.L.R. 352 Allied Bank of Nigeria Ltd v. Akubueze (1995) 4 N.W.L.R. (Part 390) 493 g Anyanwu v. Mbara (1992) 5 N.W.L.R. (Part 242) 386 Bala v. Bankole (1986) 3 N.W.L.R. (Part 27) 141 Balogun v. Amubikahun (1985) 3 N.W.L.R. (Part 11) 27 Balogun v. National Bank of Nigeria Ltd (1978) 11 N.S.C.C. h 133 Balogun v. Oshunkoya (1992) 3 N.W.L.R. (Part 232) 827 Bankole v. Pelu (1991) 8 N.W.L.R. (Part 211) 523 i BP (West Africa) Ltd v. Akinola Allen (1962) 2 S.C.N.L.R. 388 Chrisray Ltd v. Elson and Neil Ltd (1990) 3 N.W.L.R. (Part 140) 630 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 465 a Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372 Eholor v. Osayande (1992) 6 N.W.L.R. (Part 249) 524 Elf (Nig.) Ltd v. Sillo (1994) 6 N.W.L.R. (Part 350) 258 b First Bank of Nigeria Plc v. Ibennah (1996) 5 N.W.L.R. (Part 451) 725 Gankon v. Ugochukwu Chem. Ind. (1993) 6 N.W.L.R. (Part c 297) 55 Ihewuezi v. Ekeanya (1989) 1 N.W.L.R. (Part 96) 239 Ijebu-Ode Local Government v. Adedeji Balogun and Co Ltd (1991) 1 N.W.L.R. (Part 166) 136 d Innih v. Ferodo A and Co Ltd (1990) 5 N.W.L.R. (Part 152) 604 at 614 L.C.C. v. Unachukwu (1978) 3 S.C. 199 e Nsirim v. Nsirim (1990) 3 N.W.L.R. (Part 138) 285 Nwogu v. Njoku (1990) 3 N.W.L.R. (Part 140) 570 Okezie v. Queen (1963) 1 S.C.N.L.R. 24 f Omoregie v. Idagiemwanye (1985) 2 N.W.L.R. (Part 5) 4 Onaga v. Micho and Co (1961) 2 S.C.N.L.R. 101 Salami v. Savannah Bank of Nigeria Ltd (1990) 2 N.W.L.R. g (Part 130) 106 Union Bank of Nigeria v. Nwoye (1990) 2 N.W.L.R. (Part 130) 69 Uzuegbu v. Progress Bank (Nig.) Ltd (1988) 4 N.W.L.R. h (Part 87) 236

Foreign Blyth v. Birmingham Waterworks Co (1856) II Exch. 781 at i 784 Fordon v. Harcourt v. Risington (1932) All E.R. 81 at 83. Hadley v. Baxendale (1854) 9 Exch. 341 at 354 j Wilson v. United Counties Bank Ltd (1920) A.C. 102 at 133 [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION)

466 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Nigerian statute referred to in the judgment a Evidence Act (Cap 112) Laws of the Federation of Nigeria, 1990, sections 135, 136 and 137 b Nigerian Rules of Court referred to in the judgment Court of Appeal Rules, 1981, Order 3 Rule 2(4)

Counsel c For the appellant: Njemanze For the respondent: Udogu d Judgment ROWLAND JCA: (Delivering the lead judgment) In Suit No. A/59/86 at the Aba High Court, the plaintiff’s claim against the defendant was for the sum of N500,000.00 (Five Hun- e dred Thousand Naira) damages for breach of contract and negligence. Pleadings were ordered, filed and exchanged. With the leave of the court below the plaintiff filed an amended statement of claim and a further amended state- f ment of claim. The defendant also filed an amended statement of defence with the leave of the lower court. At the hearing of the matter before Mbachu J one witness each testified for the plaintiff and for the defendant. At the conclusion of the case the learned trial Judge found for the g plaintiff and awarded it the sum of N100,000.00 as general damages with N800.00 costs. Aggrieved and dissatisfied with the judgment of the trial court the defendant, hereinafter called the appellant, has appealed to this Court. The h plaintiff shall also hereinafter be referred to as the respondent. With the leave of this Court, the appellant filed three amended grounds of appeal. They read thus:– i “GROUND 1:– The Decision of the learned trial Judge is altogether unwarranted, unreasonable and cannot be supported having regard to the weight of evidence. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 467 a GROUND 2: ERROR IN LAW The learned trial Judge erred in Law when he awarded the sum of N100,000.00 (One Hundred Thousand Naira) to the plaintiff/respondent as general damages for Negligence. b PARTICULARS OF ERROR (a) The plaintiff/respondent did not prove any act of Negli- gence against the defendant/appellant. (b) The defendant/appellant in its amended statement of c defence and in its oral testimony in Court substantially denied the allegation of negligence made against it by the plaintiff/ respondent. GROUND 3: ERROR IN LAW The sum of N100,000.00 (One Hundred Thousand Naira) d which the Learned trial Judge awarded to the plaintiff/ respondent as general damages for negligence is ridiculously high. PARTICULARS OF ERROR e (a) The learned Trial Judge did not apply any principle of assessment in arriving at the figure of N100,000.00 (One Hundred Thousand Naira) awarded to the plaintiff/respondent. (b) The Cheque of the plaintiff/respondent which was dis- f honoured was for the sum of N120.00 (One Hundred and Twenty Naira) and there was no evidence that the plaintiff/respondent lost any money or business transaction or interest above the said sum of N120.00 or to the interest above the said sum of N120.00 or to the magnitude of g N100,000.00 (One Hundred Thousand Naira).” Briefs of argument were filed and exchanged by the parties. As can be gleaned from the further amended statement of claim, the respondent’s case is that it was a customer of the h appellant and maintained a current account with the appellant at the appellant’s branch at 198 Faulks Road, Aba. The respondent stated that the appellant owed it a statutory duty to keep its account and receive cheques and moneys paid i into the said account and credit moneys and advise the respondent accurately and promptly accordingly and also to honour cheques issued by the respondent and effect payments. The respondent contended that on 21st January, 1986, j it issued a cheque for the sum of N120.00 (One Hundred [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 468 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. and Twenty Naira) to the Aba Sports Club. The respondent a claimed that it issued the said cheque in the belief that its account with the appellant was in credit. It was the case of the respondent that on 22nd January, 1986 the said Aba b Sports Club to whom the said cheque was issued to duly presented it for payment but the appellant refused to honour the cheque and negligently and wrongfully marked on the said cheque R/D which means “Refer to Drawer” and then c returned the same as so marked to the Aba Sports Club. The respondent therefore claimed the sum of N250,000.00 (Two hundred and fifty thousand Naira) as general damages for breach of contract and the same amount aforesaid as general d damages for negligence. The total sum claimed by the respondent from the appellant was N500,000.00. As portrayed in its amended statement of defence, the appellant’s case is that the respondent’s cheque was dishon- e oured because the respondent did not have enough credit to its account. The appellant denied liability and contended that the amount drawn by the respondent fell short of the outstanding credit balance in the respondent’s account. It is the f contention of the appellant that the respondent paid into its account two instruments, namely, an up-country cheque for the sum of N10,500.00 and a dividend warrant of N77.35 and that these instruments had not been cleared and credited to the respondent before the respondent issued the said g cheque for N120.00 to the said Aba Sports Club and which said cheque was presented and dishonoured as a result of insufficient funds in the respondent’s account. h As I have said above, the learned trial Judge gave judgment in favour of the respondent. He held that the respondent proved its case on a preponderance of evidence. Based on the amended grounds of appeal, learned Counsel for the i appellant B.A. Njamanze, Esq., in the appellant’s brief identified the following three issues for determination:– “(1) Whether upon the pleadings and evidence led the Learned Trial Judge was right in holding that the respondent proved its case on the preponderance of evidence. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 469 a (2) Whether the learned trial Judge was right in awarding to the respondent the sum of N100,000.00 as general damages for negligence in an action based on the wrongful dishonour of a cheque of N120.00. b (3) Whether the learned trial Judge applied the correct principle of assessment of damages in arriving at the figure of N100,000.00 awarded to the respondent.” In the respondent’s brief of argument, Chief Donald Ibezim c Udogu, learned Counsel for the respondent, formulated only two issues for determination, viz:– “(1) Whether from the circumstances of the case, the learned trial Judge was right in entering judgment in favour of the d respondent. (2) Whether the award of N100,000.00 General Damages for negligence is excessive in the circumstances.” In my view, the issues formulated by the appellant are not e dissimilar to the combination of the two issues formulated by the respondent. In this judgment, I shall accordingly deal with the issues as set out by the appellant. I should like to consider first the attack on ground 1 of the amended grounds f of appeal of the appellant by the respondent. Incidentally, that ground of appeal is the foundation of issue no. 1 in the appellant’s brief. Ground l of the amended grounds of appeal reads:– g “The decision of the learned trial Judge is altogether unwarranted, unreasonable and cannot be supported having regard to the weight of evidence.” It was submitted for the respondent that the above quoted h fround 1 of the grounds of appeal is incompetent and should be struck out as it offends the provisions of Order 3 Rule 2(4) of the Court of Appeal Rules, 1981. Order 3 Rule 2(4) of the Court of Appeal Rules, 1981 provides as follows:– i “No ground which is vague or general in terms or which discloses no reasonable ground of appeal shall be permitted, save the general ground that the judgment is against the weight of the evidence, and any ground of appeal or any part thereof which is not permitted under this rule may be struck out by the court of its own j motion or on application by the respondent.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 470 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

It is pertinent to mention at this juncture that Order 3 of the a Rules of this Court deals with civil appeals and is therefore relevant and germane to the present appeal. It is doubtless clear from the wording of the appellant’s ground 1 of the b amended grounds of appeal that the said ground of appeal offends the provisions of Order 3 Rule 2(4) of the Court of Appeal Rules, 1981. In Chrisray Ltd v. Elson and Neil Ltd (1990) 3 N.W.L.R. (Part 140) 630 at 640 Kolawole JCA c dealing with such ground of appeal contained in ground 3 of that appeal had this to say:– “First with regard to ground 3 of the grounds of appeal, I think it is elementary that the proper general ground in civil cases is that the d judgment is against the weight of evidence. It is unfortunate that learned Counsel who framed the grounds of appeal is not aware of Order 3 Rule 2(4) of the Court of Appeal Rules, 1981 which deals with what is usually called the omnibus ground and a string of decided cases which laid it down that ground 3 of the grounds of e appeal is appropriate only in criminal cases.” The case in hand is a civil appeal and since ground 1 of the grounds of appeal is incompetent as it offends the provisions of Order 3 Rule 2(4) of the Court of Appeal Rules, 1981 it f should be struck out and it is therefore struck out by me (see also Innih v. Ferado A and Co Ltd (1990) 5 N.W.L.R. (Part 152) 604 at 614–615; Nsirim v. Nsirim (1990) 3 N.W.L.R. (Part 138) 285 at 296; BP (West Africa) Ltd v. Akinola Allen g (1962) 1 All N.L.R. (Part 4) 645 at 647 and 649; Okezie v. Queen (1963) 1 All N.L.R. 1 at 3; Ihewuezi v. Ekeanya (1989) 1 N.W.L.R. (Part 96) 239). As I have said above, issue no. 1 in the appellant’s brief is tied to ground 1 of the h grounds of appeal; therefore, it goes without saying that if ground 1 of the grounds of appeal is struck out issue no. 1 in the appellant’s brief must also be struck out as one cannot put something on nothing. The foundation of issue no. 1 in i the appellant’s brief is ground 1 of the grounds of appeal. If the foundation of a house crumbles, the whole edifice will crumble like a pack of cards. As the foundation of issue no. 1 in the appellant’s brief has crumbled that issue has no j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 471 a ground of appeal to support it and must therefore be struck out and it is hereby struck out by me. What is now left in the appellant’s brief for determination b are issues nos. 2 and 3. Issue no. 2 is whether or not the learned trial Judge was right in awarding to the respondent the sum of N100,000.00 c as general damages for negligence in an action based on the wrongful dishonour of a cheque of N120.00. It was submitted for the appellant that the respondent in its further amended statement of claim and also in evidence stated that the respondent on 6th January, 1986 and 21st January, 1986 d respectively paid into its account cheque no. AC/405448 for N10,500.00 and a a dividend warrant for N77.35. It was contended under cross-examination that the respondent’s witness admitted that the respondent did not find out from e the appellant whether its cheque for N10,500.00 had been cleared before the respondent drew the cheque for N120.00. Reference was made to page 30 of the record of proceedings. It is the contention of the appellant that in its amended state- f ment of defence and in evidence given denied that the appellant acted negligently towards the respondent. The appellant contended that it relied on the accepted rules and practice of bankers. The said rule and practice of bankers, it was submit- g ted, is to the effect that the bank does not give value to an up- country instrument until after 21 working days excluding Saturdays and Sundays and public holidays. Reference was made to page 31 of the record of proceedings. h For the respondent it was submitted that a clear case of negligence was established against the appellant by the respondent. It was contended that the respondent had enough money, that is to say N49.98 plus N77.35 being N127.33 in i its account to pay for exhibit D, the dishonoured cheque, or at worst, the respondent had some uncleared effects and, therefore, the appellant should have directed the payee of the cheque, exhibit D to represent the same. Learned Counsel j for the respondent argued that marking exhibit D “R/D” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 472 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. which means “refer to drawer” amounted to negligence on a the part of the appellant. It is the contention of the respondent that what the learned trial Judge had to decide and indeed decided was whether on the pleadings and reliefs b sought the appellant was liable for breach of contract or for negligence or both. It was submitted that the trial court found the appellant liable for negligence. In his judgment at page 49 lines 30–33 and page 50 lines c 1–2 of the record, the learned trial Judge said:– “Defendant’s evidence of banking practice whereby it has 21 days to clear the cheque was not challenged or contradicted by evidence of the plaintiff, that fact is established – Lewis and Peat v. d Akhimien (1976) 7 S.C. 157; Overseas Construction Company Nig. Ltd v. Creek Enterprises (Nig.) Ltd (1985) 5 N.W.L.R. (Part 13) 407.” It should be noted that the respondent paid into its account e the said cheque of N10,500 on 6th January, 1986 and the dividend warrant for N77.35 on 21st January, 1986. It seems to me that the said period of 21 working days had not expired when the respondent issued the said cheque (exhibit D) f for N120, on 21st January, 1986. I am of the view that the learned trial Judge was therefore in error when he held at page 54 lines 8–11 of the record thus:– “Alternatively it could have contacted the paying bank, New Nige- rian Bank Ltd. Benin by telex message to facilitate payment or g rejection of its (NNB) cheque in the interest of its customer.” I have no doubt in my mind from the record that there was no evidence before the learned trial Judge that an upcountry h cheque could be cleared by telex message. The above- quoted statement of the learned trial Judge is to my mind conjectural. That being so, it seems to me that the court below was in error when it held that the appellant was negligent when it refused to honour the said cheque. It should be i noted that the proceeds of a cheque paid into an account in a bank are not available until reasonable time is allowed for the necessary bookkeeping operations to be carried out and necessary time is also allowed to clear the cheque as held in j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 473 a the case of Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye (1990) 2 N.W.L.R. (Part 130) 69. From the pleadings, the main issue before the learned trial b Judge was the dishonouring of the cheque for the sum of N120,00 and what called for determination was whether the appellant was right or wrong in dishonouring the said cheque, exhibit D. The law is that the refusal by a banker to c pay a customer’s cheque when the banker holds in hand an amount equivalent to that endorsed on the cheque belonging to the customer amounts to a breach of contract for which the banker will be liable in damages (see Balogun v. Na- d tional Bank of Nigeria Ltd (1978) Volume 11 N.S.C.C. 133; (1978) 3 S.C. 155. It is my firm view therefore that the learned trial Judge was in grave error when, after holding that the respondent’s claim for breach of contract could not be upheld, still went ahead to hold that the appellant should e pay N100,000.00 as general damages for negligence to the respondent as there was no positive evidence to support the finding of negligence against the appellant. f I now move to the consideration of issue no. 3 in appellant’s brief. The issue is whether or not the learned trial Judge applied the correct principle of assessment of damages in arriving at the figure of N100,000 awarded to the respondent. It was submitted that the learned trial Judge g found as a fact that there was no privity of contract between PW1 and the appellant. It was contended that PW1’s membership of the Aba Sports Club was of a social nature and had nothing to do with the business of the respondent’s h company. It was therefore submitted that the learned trial Judge was wrong when he took the membership of and the election of PW1 into the Aba Sports Club into account in his assessment of damages. It is the contention of the appellant i that the sum of N100,000.00 which the trial court awarded as damages for negligence was ridiculously high and out of proportion. Issue no. 3 in appellant’s brief is issue no. 2 in the respon- j dent’s brief. It was submitted for the respondent that as it is [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 474 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. in trade or business, it was entitled to substantial damages. a Reference was made to the cases of Wilson v. United Coun- ties Bank Ltd (1920) A.C. 102 at 133; Balogun v. National Bank of Nigeria Ltd (supra); Salami v. Savannah Bank Ltd b (1990) 2 N.W.L.R. (Part 130) 106 at 126. It was contended that from the pleadings and the totality of evidence adduced at the trial, it is clear that the learned trial Judge did not act on any wrong principle of law in his as- c sessment of damages and the amount awarded could not be said to be ridiculously high as to warrant this Court to interfere with the award. It was the contention of the respondent that in an action for wrongful dishonour of a cheque of a d customer in trade, the damages awarded against a banker was said to be at large.

It is pertinent at this juncture to refer to paragraphs 1 and 3 e of the further amended statement of claim of the respondent at page 20 of the record. Paragraphs 1 and 3 read:– “1. The plaintiff is a Limited Liability Company incorporated under the Laws of the Federal Republic of Nigeria for trade f and is in trade with its registered office at Number 7 Obohia Road, Aba. 3. At all times material, the plaintiff kept an account with the defendant at their said branch which, as the defendant well knew, the plaintiff operated for the purposes of and in con- g nection with its said trade or business.” The appellant did not in its amended statement of defence deny the above averments and they should therefore be taken as admitted. However, that is not, and should not be, h the end of the matter in respect of the averments in paragraphs 1 and 3 of the respondent’s further amended statement of claim. I am of the firm view that PW1, from the evidence adduced before the trial court, failed to link posi- i tively the business or trade of the respondent with his membership of the Aba Sports Club. That being so, I have no doubt in my mind that the learned trial Judge was in grave error when he took the membership of and the election of j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 475 a PW1 into Aba Sports Club into account in his assessment of damages. I hasten to say that by virtue of the provisions of sections b 135, 136 and 137 of the Evidence Act (Cap 112) Laws of the Federation of Nigeria, 1990 the respondent’s case should have been proved on the preponderance of evidence or on the balance of probabilities. It should succeed on the c strength of its own case and not on the weakness of appellant’s case (see Eholor v. Osayande (1992) 6 N.W.L.R. (Part 249) 524; Balogun v. Oshunkoya (1992) 3 N.W.L.R. (Part 232) 827; Uzuegbu v. Progress Bank (Nig.) Ltd (1988) 4 N.W.L.R. (Part 87) 236 at 239). d The exception to the above rule more especially where a defendant has not set up a counter-claim and there are facts in the defendant’s pleadings which support the claims of the e plaintiff, the latter can use the facts in the defendant’s case to support or establish its own case (see Akinola v. Oluwo (1962) 1 S.C.N.L.R. 352; (1962) 1 All N.L.R. 244; Efetiro- roje v. Okpalefe 11 (1991) 5 N.W.L.R. (Part 193) 517; Bankole v. Pelu (1991) 8 N.W.L.R. (Part 211) 523; Gankon f v. Ugochukwu Chem. Ind. (1993) 6 N.W.L.R. (Part 297) 55). From the record of the case in hand, I am unable to see any weakness in the appellant’s case at the court below that should support the case of the respondent. It should also be g stated at this point in time that the respondent was unable to prove emphatically or convincingly at the court below that at the time its cheque, exhibit D, was dishonoured by the appellant its account with the appellant was buoyant enough to h accommodate the said cheque. Part of the judgment of the lower court at page 48 lines 16–29 reads:– “The contention is that the defendant has no obligation to honour i the plaintiff’s cheque when it hasn’t sufficient fund in its account equal to the value of the cheque in the absence of overdraft facility granted by the defendant, to further buttress his argument learned Counsel quoted the PW1’s answer under cross-examination that he did not find out whether the funds paid into his account by cheque j and by Bank Draft had been credited to his account before drawing [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 476 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

exhibit D. As regards pleading of particulars of negligence the a submission of learned Counsel for the defendant cannot stand in view of paragraph 16 of the amended statement of claim which sets out the particulars of negligence which were, perhaps through an oversight, not refuted.” b It seems to me that the learned trial Judge failed to appreciate the fact that there had to be sufficient funds in the account of the respondent with the appellant to accommodate c exhibit D before the issue of negligence of the appellant could be relevant. As I have said above, the respondent had the onus to prove that at the time it issued exhibit D, the dishonoured cheque, through PW1 it had sufficient funds in its account with the appellant to sustain exhibit D before the d negligence of the appellant could be considered or become relevant. The respondent from the totality of the evidence placed before the trial court failed to discharge the onus placed on it in respect of the state of its account with the e appellant. It should be noted that “negligence in law means the omission to do something which a reasonable man guided upon the consideration which ordinarily regulate the conduct of f human affairs would do or doing something which a prudent and reasonable man would not do” per Alderson Baron in Blyth v. Birmingham Waterworks Co (1856) II Exch. 781 at 784. What amounts to negligence depends on the facts of g each particular case as the categories of negligence are never closed (Fordon v. Harcourt v. Risington (1932) All E.R. 81 at 83). h There can be no gainsay that the relationship between the parties to this appeal is contractual. Basing it on the rule in Hadley v. Baxendale (1854) 9 Exch. 341 at 354, the respondent if entitled to damages at all is only entitled to nominal damages and not substantial as awarded by the court below. i But it should be mentioned that at page 49 lines 1–3 of the record of proceedings, the learned trial Judge held:– “As submitted by learned Counsel for the defendant there is no privity of contract between PW1 and the defendant bank.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 477 a If as properly held by the learned trial Judge, there is no privity of contract between PW1 and the appellant, it stands to reason therefore that the award of damages of N100,000 b by the lower court in favour of the respondent should not have been tied to or predicated on the membership of PW1 of the Aba Sports Club which by the very fact of its name is of a social nature and was not shown to have anything to do c with the business of the respondent company. But be that as it may, I would like to refer to page 49 lines 13–17 where the learned trial Judge held as follows:– “The plaintiff would benefit from the election of PW1 as the d kitchen Secretary of the Aba Sports Club. When PW1 unanimous election to that post – vide exhibit ‘F’ was cancelled following the defendant’s dishonour of exhibit ‘D’ the plaintiff suffered loss of credibility and business.” e It seems to me that the respondent did not show sufficient nexus by way of evidence between its business and the election of PW1 as the kitchen secretary of the Aba Sports Club. I therefore hold that the above-quoted findings of the learned trial Judge is not supported by the evidence of the case and f therefore perverse. Again at page 55 lines 1–5 of the record the learned trial Judge said:– “Defendant treated the plaintiff with reckless levity causing it loss of business and credit. There is no yardstick for measuring the g damages but this should not relieve the defendant from paying damages – see Vanghan Williams in Chaplin v. Hicks (1911 ) 2 K.B. 786.” It seems to me that the above finding of the learned trial h Judge was made in error in that he did not consider the fact that he was now dealing with the issue of the award of damages as it relates to negligence. It should be noted that the principle applicable in the measure of damages in an action i for negligence is that the plaintiff is only entitled to such sum as will put him in the position he would have been, if the act constituting the negligence had not occurred (see L.C.C. v. Unachukwu (1978) 3 S.C. 199. It should be noted j also that the issue of wrongful dishonour of cheque relates to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 478 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. contract and in such a situation what applies is the rule in a Hadley v. Baxendale (supra), which it would appear the learned trial Judge did not advert his mind to. It should be mentioned again that the learned trial Judge had found as a b fact that there was no privity of contract between PW1 and the appellant. PW1 from the evidence adduced is the managing director of the respondent company and he was the person to whom the said cheque (exhibit D) was issued for his c membership of the Aba Sports Club. As I have said earlier in this judgment the issue of negligence of the appellant would only come into play after the respondent must have adduced sufficient evidence that at the d time exhibit D, a cheque for N120, was dishonoured by the appellant the respondent had sufficient funds in its account with the appellant to accommodate the said cheque. This is not a matter that should be conjectured by the learned trial e Judge on the altar of legal technicality as he did in this case. The burden is on the respondent to prove categorically that at the time exhibit D was dishonoured it had sufficient funds in its account with the appellant. This the respondent failed f to do. In paragraph 10 of the further amended statement of claim, the respondent pleaded thus:– “The plaintiff on 21/1/86 believing that its account with the defen- g dants was in credit balance, drew a cheque upon the defendants as its bankers for the sum of N120 (One Hundred and Twenty Naira) only payable to Aba Sports Club.” The above averment is not supported by any credible evi- h dence as manifest by the record. It should be noted that the effect of a failure to lead evidence in support of an averment in a pleading is that such averment is deemed to have been abandoned (see Balogun v. Amubikahan (1985) 3 N.W.L.R. (Part 11) 27; Bala v. Bankole (1986) 3 N.W.L.R. (Part 27) i 141; Nwogu v. Njoku (1990) 3 N.W.L.R. (Part 140) 570). I would like to repeat what I had said hereinbefore that the respondent has the onus of establishing before the trial court that at the time it issued exhibit D (the dishonoured cheque), j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 479 a its account with the appellant was buoyant. This should not be a matter that should be assumed as contained in paragraph 10 of the respondent’s pleadings. I would like to refer b to the general principle that a court of appeal should be slow to reverse the findings of fact of a trial court that had the opportunity of seeing and hearing the witnesses at the trial (see Omoregie v. Idugiemwanye (1985) 2 N.W.L.R. (Part 5) c 41 at 42; Anyanwu v. Mbara (1992) 5 N.W.L.R. (Part 242) 386; Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372; (1984) 4 S.C. 84). In the case in hand, the findings of fact on negligence and d the award of damages by the trial court are perverse, thus making it necessary for this Court to interfere. I would also like to mention that the law is very well settled that an appellate court will alter an award of damages by a trial court e only if the award is shown to be either manifestly too high or manifestly too low or was an award made on a wrong principle (see Elf (Nig.) Ltd v. Sillo (1994) 6 N.W.L.R. (Part 350) 258 at 274; Ijebu-Ode Local Government v. Adedeji f Balogun and Co Ltd (1991) 1 N.W.L.R. (Part 166) 136). It is only where the appellate court is convinced that an award of damages is entirely an erroneous estimate that it will interfere (see Onaga and others v. Micho and Co (1961) 1 All g N.L.R. 324 at 328). From the judgment of the court below, it is manifest that the award of N100,000 damages in favour of the respondent was based on a wrong principle. I am also convinced that the said damages awarded by the court below is entirely an erroneous estimate as it was not borne out of h the evidence placed before the court. I am of the firm conviction that before the respondent in the case in hand can seek refuge under the cases of Wilson v. United Counties Bank Ltd (1920) A.C. 102 at 133; Balogun v. National Bank i of Nigeria Ltd (1978) 3 S.C. 155 at 170; Salami v. Savannah Bank of Nigeria Ltd ( 1990) 2 N.W.L.R. (Part 130) 106 at 170; Allied Bank of Nigeria Ltd v. Akubueze (1995) 4 N.W.L.R. (Part 390) 493, it must prove convincingly at the j trial court that at the time its cheque for N120 (exhibit D) [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Rowland JCA 480 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. was dishonoured by the appellant it had sufficient money in a its account to accommodate its dishonoured cheque. As I said above the respondent did not discharge this burden of proof before the court below. b Finally, I must say that it is not the duty of a trial court to bridge the yawning gaps in the case presented by any of the parties. In the present appeal, it is manifest from the record of the proceedings that the court below tended to give c prominence to the case presented to it by the respondent and bridged the yawning gaps therein. In the result, this appeal succeeds and it is allowed by me. I set aside the judgment of Mbachu J in Suit No. A/59/86 and d the award of N100,000 made therein in favour of the respondent together with the costs of N800. The appellant is entitled to costs which I assess at N1,200 against the respondent. e EDOZIE JCA: I had a preview of the lead judgment just delivered by my learned brother, Rowland JCA. I share his views. f The relationship of a banker with its customer is that of an agent and principal as well as that of a debtor and a creditor. The refusal by a bank to pay a customer’s cheque when the banker holds in hand an amount equivalent to that endorsed on the cheque belonging to the customer amounts to a g breach of contract for which the banker is liable in damages (Balogun v. National Bank of Nigeria Ltd (1978) 3 S.C. 155). It is the law that the proceeds of a cheque paid into an account in a bank are not available until reasonable time is h allowed for the necessary bookkeeping operations to be carried out and necessary time is also allowed to clear the cheque (see Union Bank v. Nwoye (1990) 2 N.W.L.R. (Part 130) 69 at 76). i In the case in hand, the period of 21 days for the maturity of up country cheques had not lapsed when on 21st January, 1986 the respondent presented its cheque for N120 to draw on a cheque for N10,500 paid in on 6th January, 1986 and a j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, PORT-HARCOURT DIVISION) Edozie JCA Progress Bank of Nigeria Ltd v. Ugonna (Nig.) Ltd 481 a dividend warrant of N77.35 paid in on 21st January, 1986. The result is that the respondent did not have sufficient funds in his account to the tune of N120 at the material time. b The learned trial Judge was therefore in grave error to have entered judgment in its favour. In view of the foregoing and the more detailed analysis of the case in the lead judgment, I allow the appeal and abide c by the consequential orders made in the lead judgment. ONALAJA JCA: I have been privileged to have a preview in draft of the lead judgment eloquently delivered by my learned brother, Olufemi Rowland JCA, who, true to his d great learning and erudition, dealt adequately and convincingly with all the issues canvassed in this appeal that for obvious reasons I adopt the reasoning and conclusion as my own and that this appeal is meritorious and rightly allowed. e In my concurrence I adverted my mind to the recent judgment of this Court in appeal CA/PH/217/91 between First Bank of Nigeria Plc v. Nze Ibennah (1996) 5 N.W.L.R. (Part 451) 725 wherein this Court dealt exhaustively with the f liability of the bank for a dishonoured cheque and the damages to be awarded be it for breach of contract or in the tort of negligence. I adopt my reasoning on the law in this case which with its application convinced me further that this g appeal is rightly allowed. I allow the appeal and abide with the consequential order of costs granted in the lead judgment. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

482 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a Republic Bank Limited v. Central Bank of Nigeria and another b FEDERAL HIGH COURT, LAGOS DIVISION UKEJE J Date of Judgment: 15 AUGUST 1995 Suit No.: FHC/L/CS/781/95

Banking – Banking licence – Nature of c Facts The defendant/respondent raised a preliminary objection to the plaintiff’s action alleging that the revocation of its li- d cence by the defendants was not done in good faith, hence null and void. The defendant’s objection was that the court had no jurisdiction in respect of the action and that the plaintiff had no e right of action. They based their arguments on the provisions of the Banks and Other Financial Institutions Decree, 1991 which precluded any suit against the Federal Military Gov- ernment or the Central Bank in respect of the exercise of any f power granted under the Decree. The sections of the Decree relevant to the action are hereby reproduced:– “Revocation of Licence 12. The Governor may, with the ap- g proval of the President, by Notice published in the Gazette, revoke any licence granted under this Decree if a bank – h (a) ceases to carry on the type of banking business for which the licence was issued for a con- tinuous period of 6 months; i (b) goes into liquidation or is wound up; (c) fails to fulfil or comply with any condition subject to which the licence was granted; j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

Republic Bank Ltd v. Central Bank of Nigeria and another 483 a (d) has insufficient assets to meet its liabilities; (e) fails to comply with any obli- b gation imposed upon it by the Central Bank.” “Protection against 49(1) Neither the Federal Govern- adverse claims ment nor the Central Bank nor any Officer of the Government c shall be subject to any claim or demand by or liability to any person in respect of anything done or omitted to be done in d good faith in pursuance of or in execution of any power conferred upon that Govern- ment, the bank or such Officer by this Decree.” e Held – 1. Whereas a person’s access to have his civil right adjudicated upon by a court may be restricted or ousted by f statute, the language of such statute must be construed strictly. But once with such an approach it is clear that an ouster restriction of the jurisdiction was intended, and that from the facts, the particular case comes squarely within the four corners of the statute, the court has no al- g ternative but to hold that its jurisdiction has been ousted. 2. A right or licence to engage in the business of banking under the Banking Ordinance is not a civil right within h the meaning and the context of the constitution. Such a licence may be determined by ministerial order without recourse to the courts or other tribunal. 3. The licence to engage in the business of banking is re- i voked effectively, when so revoked by him in accordance with section 14 of the Banking Ordinance. 4. The powers under section 14 of the Banking Ordinance are administrative powers properly vested in the Minis- j ter and it is for the Minister not the courts to exercise [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

484 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

those rights. Section 3(5)(b) and section 14 of the Bank- a ing Ordinance (read together) are in pari materia with section 12 of the Banks and Other Financial Institutions Decree. b 5. In matters involving the exercise of statutory administrative powers, the functions of the courts begin, only if and when it is alleged that the power has not been exercised in accordance with the provisions of the statute creating c them. 6. Per curiam “In this case, it is my considered view that the revocation of the Bank’s Licence is based on factors or circumstances d cognisable under the following provisions of section 12 of BOFID: That the Republic Bank - (a) has insufficient funds to meet its liabilities (12)(d) (b) has failed to comply with obligations of the Central e Bank (the Regulatory Body). And the Head of State has approved the revocation. I am therefore of the firm view that the Governor of the Central Bank has exercised his administrative function of f revoking the Operating Licence of the Republic Bank in terms of sections 5 and 12 of the Banks and Other Financial Institution Decree (1991) in such a way that leaves no room for the review of the exercise of that function by this Court. Having found that the revocation of the Bank’s Banking Li- g cence was duly revoked in terms of sections 5 and 12 of BOFID, then the provisions of section 49 thereof fully applies.” 7. If a man is required in the discharge of a public duty to h make a decision which affects, by its legal consequences, the liberty or property of others and he performs that duty and makes that decision honestly and in good faith, it is a fundamental principle of our law that i he is protected against civil liability in respect of that decision. 8. The concept of bad faith eludes precise definition, but in relation to the exercise of powers, it may be said to j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

Republic Bank Ltd v. Central Bank of Nigeria and another 485 a comprise dishonesty or fraud or malice. A power is exercised fraudulently if its repository intends to achieve an object other than that for which he believes the power b to be conferred. A power is exercised maliciously if its repository is motivated by personal animosity towards those who are directly affected by its exercise. The burden cast upon a person seeking to impugn such decision c is likely to be a heavy one to discharge. 9. In the instant case the revocation of the banking licence of the Republic Bank as published in the Revocation of d Banking Licence (S.I. 6 of 1995) is a proper exercise of those powers which are administrative rather than judicial powers. 10. A declaration will not be granted:– e (i) Where the plaintiff asserts a right not recognised by law; (ii) Where the matter is placed within the exclusive f jurisdiction of another tribunal; (iii) Where administrative remedies for a breach of statutory duty are exclusive of the High Court. g In this class of cases the court will decline to retry an issue already determined by the appointed tribunal, and arrogate to itself a quasi-original or appellate jurisdiction h where none has been normally conferred upon it, and in any event it is futile to make a declaration in an opposite sense to a determination validly made by a tribunal of competent jurisdiction i 11. Upon the authority of the Eguamwense case this is not an appropriate case in which to make the declaratory orders sought. j Objection upheld. [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

486 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Cases referred to in the judgment a Nigerian A-G Anambra State v. Okafor (1992) 2 N.W.L.R. (Part 224) b 396 Eguamwense v. Amaghizemwen (1993) 9 N.W.L.R. (Part 315) 1 Ekwuno v. Ifejika 5 F.S.C. 156 c Hausa v. State (1994) 6 N.W.L.R. (Part 350) 281 Merchant Bank v. Federal Minister of Finance (1961) 1 ALL N.L.R. 598 d Nneji v. Chukwu (1988) 3 N.W.L.R. (Part 81) 184 Nwosu v. Imo State Environmental Sanitation Authority (1990) 2 N.W.L.R. (Part 135) 668 at 702 e Western Steel Works v. Iron and Steel Workers Union (1987) 1 N.W.L.R. (Part 47) 284 at 303

Foreign f Anisminic Ltd v. Foreign Compensation Commission (1969) 2 A.C. 147 Fitzwilliamson Wandworth Estates Co v. Minister of Hous- ing and Local Government (1952) A.C. 362 g O’Riley v. Macnon (1983) 2 A.C. 237 R v. Registrar of Companies Ex parte Central Bank of Eng- land (1986) 1 Q.B. 1114 h

Nigerian statute referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of 1991, sections 12, 49 i

Book referred to in the judgment De Smith Judicial Review of Administrative Action (4ed) pages 291, 335 and 337 j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION)

Republic Bank Ltd v. Central Bank of Nigeria and another 487 a Counsel For the plaintiff/respondent: Ayanlaja (with Adetunji and Belgore) b For the first defendant/respondent: Olatunji For the second defendant/applicant: Ajayi (with Opasanya, Ilori and Sanya) c Ruling UKEJE J: This Ruling relates to a notice of preliminary objection dated and filed on 17th July, 1995 by the second defendant/applicant urging that this suit be struck out, upon d the following grounds:– (i) That this Court is coram non judice (has no jurisdiction) in respect of this action; and e (ii) That the plaintiff has no right of action. The motion is not supported by an affidavit. Also, the plaintiff/respondent and the first defendant/ respondent filed no counter-affidavit. f Learned Senior Advocate for the plaintiff and learned Counsel for both defendants addressed this Court extensively on issues of law. g Addressing the court on Monday, 31st July, 1995, Ajayi, Learned Counsel on behalf of the second defendant/applicant, reiterated the antecedents of the preliminary objection herein, as already stated, supra, and sought to rely on section 49 of the Banks and Other Financial Institutions h Decree, No. 25 of 1991 (hereafter in this Ruling referred to as “BOFID”), which precludes any suit against the Federal Military Government or the Central Bank in respect of the exercise of any power granted under the Decree. He submit- i ted that the words of the Decree were clear and unambiguous in relation to the action before the court; that particulars of claim indicated the parties (Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation) in relation to j their powers under the BOFID, and the reliefs sought [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 488 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. challenged as null and void, the revocation of the plaintiff’s a banking licence, and the appointment of the second defendant, as void. He cited Nwosu v. Imo State Environmental Sanitation Au- b thority (1990) 2 N.W.L.R. (Part 135) 668 at 702 wherein the Supreme Court found that the use of the words “anything done or purported to have been done”, though likely to be unpleasant to courts, are words which oust the jurisdiction of c the court. Learned Counsel further submitted that the word “intended” used in section 49 of BOFID is synonymous with d “purported” per Black’s Law Dictionary. He therefore submitted that section 49 of BOFID ousts the jurisdiction of the court in this action. He referred to:– e 1. Anisminic Ltd v. Foreign Compensation Commission (1969) 2 A.C. 147. 2. R v. Registrar of Companies Ex parte Central Bank f of England (1986) 1 Q.B. 1114, which approved the decision in the Anisminic case. He therefore submitted that under section 49 of BOFID, the administrative decision of the Governor of the Central Bank g is final; for which reason he invited the court to decline jurisdiction herein.

2. That the second relief, per the particulars of claim, re- h lates to declarations challenging the administrative action of the Governor, Central Bank; and he submitted:– (a) Concerning the plaintiff’s right of action, that declarations avail only in regard to declarations of right, i construction of statutes or documents, and, lastly, declarations stating the legal position of things. In this regard, he cited:– (i) Wade on Administrative Law; j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 489 a (ii) Western Steel Works v. Iron and Steel Workers Union (1987) 1 N.W.L.R. (Part 47) 284 at 303; (iii) Eguamwense v. Amaghizemwen (1993) 9 b N.W.L.R. (Part 315) 1, wherein the court refused to make a declaration, which was not usually amendable to a declaratory action. And that a declaration judgment cannot avail where the c plaintiff cannot obtain a relief from the defendant (Ekwuno v. Ifejika (1956) F.S.C. 156, where the Supreme Court approved that action in such a case should be struck out). For in this case, even if the court holds the revocation of the d plaintiff’s licence is illegal, the question would arise as to how the court can compel the Central Bank of Nigeria to restore the plaintiff s enjoyment of the privilege of the banking licence. e He referred to Merchant Bank v. Federal Ministry of Fi- nance (1961) 1 All N.L.R. 598, where the court held that administrative powers are to be exercised by the Minister and not by the court and that the plaintiff’s/applicant’s right f to the banking licence was that of a licensee only. He therefore urged the Court to neither look at the declaration nor to grant it. g He submitted that the administrative powers exercised by the Central Bank has done all of the following things:– (i) The revocation of the licence; h (ii) The determination of the plaintiff’s right to carry on the banking business; (iii) The exercise of judicial and quasi-judicial functions of the finding of facts. i He submitted that an action to challenge the above exercise of administrative action will be struck out, as by the decision in Eguamwense’s case (supra) such cannot be challenged by a declaratory decision and must be struck out since the court j cannot sit to review findings of facts. [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 490 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

He submitted that the courts would decline jurisdiction in a any action challenging the exercise of administrative action (O’Riley v. Macnon (1983) 2 A.C. 237). He therefore urged this Court to strike out the substantive b action either in view of section 49 of the Banks and Other Financial Institutions Decree, 1991 or that due process had not been followed in instituting the action herein and that the plaintiff has no right of action herein. That was his submis- c sion. Olatunji, Learned Counsel on behalf of the first defendant, the Central Bank, fully and completely aligned himself with the submissions of the learned Counsel on behalf of the d second defendant. Ayanlaja, learned Senior Advocate, on behalf of the plaintiff/respondent submitted that the second defendant’s notice of preliminary objection herein is not apt to meet the cir- e cumstances of this case. That the preliminary objection by virtue of Order 27 of the Federal High Court Rules conceives only of legal defence f hence there is no affidavit, and that such an affidavit can only take cognisance of legal, but not factual defences; neither can it take cognisance of any fact outside the endorsement of claim. g That section 49 of BOFID permits the factual defence of “in good faith” making it possible that the action can also be done “in bad faith”. That the onus lies on the defendants to show that they have h acted in good faith, as there is no presumption of “good faith”. That put differently anything done in bad faith must be sanctioned by this Court. Learned S.A.N. therefore submitted that the “bona fides” i of a statutory body, when challenged, must be found in the writ of summons, the document of challenge. That once the second defendant has admitted the facts alleged in the writ of summons, it cannot have recourse to j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 491 a section 49 of BOFID, unless it has filed an affidavit, or other documents. He therefore submitted that the preliminary objection was highly premature. b Learned S.A.N. referred to the writ of summons which posits that the revocation of the plaintiff’s banking licence was capricious, null and void and based on a fact not cognisable by section 12 of BOFID. That statutory power must be c bona fide, otherwise it is mala fide:– 1. Fitzwilliamson Wandworth Estates Co v. Minister of Housing and Local Government (1952) A.C. 362. d He therefore submitted that the defence created by section 49 would only be available to the defendants if they could show that they acted in good faith, and in accordance with the law. That at this stage the defendants only relied on e papers filed by the plaintiff and no paper so far filed by the plaintiff alleges good faith; therefore, that section 49 did not avail. That the second and third objections did not avail, as the f court ruled on 14th July, that the plaintiff was properly before this Court. That the defendant appeared on 14th July, 1995 and so have waived their right to object to any procedural irregularity. g Further, learned S.A.N. submitted that this Court has always been vested with power to exercise supervisory power over statutory bodies to ensure the proper exercise of the powers therein vested. h Learned Senior Advocate conceded that it was not the place of this Court to substitute its own decision for that of the statutory body, neither was the plaintiff asking for that. i That it was, however, the place of the Court to test here whether the power vested had been exercised in accordance with the law; and, thereafter, to issue an appropriate declaration. That while the particulars of claim, inter alia, posited j that the two defendants had acted capriciously, that the [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 492 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. defendants conversely gave reasons which could not be a brought within section 12 of BOFID. Learned S.A.N. therefore submitted that the second defendant’s preliminary objection could not avail him at that b stage, and that the first defendant should show that it acted in good faith. He finally submitted that this action was frivolous and c ought to be struck out, to leave the way clear for the hearing of the substantive action. In reply, Ajayi, learned Counsel submitted that it was elementary that the defendants could not waive their right for d want of jurisdiction. Further, that since the plaintiff had ascribed bad faith to the first defendant’s action, it was for the defendants to show good faith. e He referred to Sodeinde v. Ahmaddiya (1983) 2 S.C.N.L.R. 284 at 315, wherein Obaseki, then JSC, defined “bad faith” as opposite to “good faith”. f He then raised the quaere whether the particulars of claim has alleged bad faith. That the particulars of claim used the words “capricious, null and void” and he submitted that those were legal terms g which completely differ from “bad faith”. He therefore submitted that the words used do not show “bad faith” (Halsbury’s Laws of England (4ed) Volumes 60– 61, which states that bad faith must be specifically pleaded h and proved by the party alleging it. That the onus lies on the party alleging bad faith, in this case, the plaintiffs). Learned Counsel further submitted that under section 147 of the Evidence Act, there was a presumption of good faith i in favour of the public administrator. And that even where a lawful act was done for the wrong reason, that section 49 would avail. Otherwise violence would be done to the intendment of that section. j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 493 a That the intention is immaterial and that the defence offered by section 49 fully availed the defendants. He urged the Court to uphold the objection. b That concluded the submissions of the Learned Senior Ad- vocate and the two Counsel. Now, the following issues arise for determination in this Ruling:– (1) Does this Court have jurisdiction to entertain, hear c and determine the substantive suit herein. (2) Does the plaintiff have a right of action to institute and maintain the substantive suit herein. d (3) Depending on the findings in quaere (1) and (2) supra, what is the proper order to make? 1. Jurisdiction to hear and determine this suit. It is a long settled principle of law that:– e “. . . the issue of jurisdiction is so radical that it forms the foundation of adjudication. If a Court lacks jurisdiction, it also lacks the necessary competence to try the case at all. A defect in competence is fatal, for the proceedings are null and void ab initio. . .” f (Oloba v. Akereja (1988) 3 N.W.L.R. (Part 84) 501 per the Su- preme Court). It is the strong contention of Ajayi, learned Counsel for the second defendant, that this Court has no jurisdiction under section 49 of the Banks and Other Financial Institutions g Decree, 1991. For ease of reference, section 49 provides as follows:– “Protection against 49(1) Neither the Federal Government h adverse claims nor the Central Bank nor any Officer of the Government shall be subject to any claim or demand by or liability to any person in respect of anything i done or omitted to be done in good faith in pursuance of or in execution of any power conferred upon that Government, the bank or such Officer by this j Decree.” [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 494 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The plaintiff’s substantive action seeks a declaration inter a alia that the purported revocation by the Governor of the first defendant of the banking licence published in the Ga- zette Extraordinary of 30th June, 1995 is “capricious, illegal, b null and void”, as same is based on a cause not cognisable under section 12 of the Banks and Other Financial Institu- tions Decree, 1991. It becomes therefore imperative also to examine the ex- c press provisions of section 12 of BOFID, viz:– “Revocation of Licence “12. The Governor may, with the approval of the President, by Notice” published in the Gazette, revoke d any licence granted under this Decree if a bank:– (a) ceases to carry on the type of banking business for which the licence was issued for a con- e tinuous period of 6 months; (b) goes into liquidation or is wound up; (c) fails to fulfil or comply with f any condition subject to which the licence was granted; (d) has insufficient assets to meet its liabilities; g (e) fails to comply with any obligation imposed upon it by the Central Bank.” Now, there is annexed as exhibit A01, to the plaintiff’s h motion on notice dated 12th July, 1995, and paragraph 7 of the affidavit in support, the Revocation of Banking Licence (S.1. 6 of 1995). The Revocation Order states that the licence was revoked because :– i “. . . the grave financial condition of the Republic Bank Limited has culminated in the total erosion of the capital base and the dissipation of the depositors’ funds resulting in the inability of the Bank to meet its obligations to its depositors and creditors; and the various actions taken by the regulatory authorities to halt further j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 495 a deterioration, including calls on the shareholders to recapitalise the Bank have failed . . . AND that the said Republic Bank has therefore failed beyond resuscitation.” b The second defendant’s Counsel posits that it goes without controversy that this suit arose on account of the exercise by the Governor of his powers under section 12 of the BOFID Decree. The issue that arises, therefore, is whether this Court c has jurisdiction to entertain an action against the Governor in respect of the exercise in this action of rights under the BOFID Decree. In this regard, I would wish to examine the decision of the d Supreme Court in Nwosu v. Imo State Environmental Sanita- tion Authority (1990) 2 N.W.L.R. (Part 135) 688, wherein the Supreme Court held inter alia at 717:– e “Whereas a person’s access to have his civil right adjudicated upon by a Court may be restricted or ousted by statute, the language of such a statute must be construed strictly. But once with such an approach it is clear that an ouster or restriction of the jurisdiction was intended, and that from the facts, the particular case f comes squarely within the 4 corners of the statute, the Court has no alternative but to hold that its jurisdiction has been ousted.” In this regard, I would wish to refer to Merchants Bank Ltd v. Finance Minister (1961) All N.L.R. (Part I) 598 wherein g the Supreme Court construed the nature of a banking licence under section 3(1), 3(5)(b)(ii) and of the Banking Ordinance (Cap 19) whether a right or a privilege. h The Supreme Court then held inter alia:– “(1) A right or licence to engage in the Business of Banking under the Banking Ordinance is not “civil right”, within the meaning and the context of the Sixth Schedule to the 1954 Constitution. Such a licence may be determined by Ministe- i rial Order without recourse to the Courts or other tribunal, since section 5 of the Constitution does not apply. (2) The licence, to engage in the business of banking is revoked effectively by the Minister, when so revoked by him in ac- j cordance with section 14 of the Banking Ordinance. [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 496 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(3) Per Unsworth, FJ and Brett, FJ: a ‘The power under section 14 of the Banking Ordinance, are administrative powers properly vested in the Minis- ter.’ b It is for the Minister not the Courts, to exercise those rights.” Section 3(5)(b) and section 14 (read together) of the Bank- ing Ordinance are in pari materia with section 12 of the c Banks and Other Financial Institutions Decree (BOFID). (In this regard, vide page 601 of the Merchants Banks Ltd decision (supra).) The plaintiff contends that the plaintiff’s banking licence d was revoked for reasons not cognisable under section 12 of BOFID. The Revocation Order cites the reason therefore, inter alia, as follows:– e “Whereas the grave financial condition of Republic Bank Limited has culminated in the total erosion of the Capital Base and the dissipation of depositors’ funds, resulting in the inability of the Bank to meet its obligations to its depositors and creditors and the vari- f ous actions taken by the regulatory authorities to halt further deterioration including calls on the shareholders to recapitalise the Bank has failed.” In Merchants Bank Ltd v. Federal Minister of Finance (su- g pra), Unsworth FJ said obiter:– “In matters involving the exercise of statutory administrative power, the functions of the Courts begin, only if when it is alleged that the power has not been exercised in accordance with the pro- h visions of the statute creating them.” That obiter dictum has since been approved by the Supreme Court and the Court of Appeal in a long line of cases, viz:– (a) In Nwosu v. Imo State Environmental Sanitation Author- i ity (1990) 2 N.W.L.R. (Part 135) 688 at 739, Agbaje, then JSC, said:– “. . . the provisions of the Decree can apply to the Act, provided what is done is within the contemplation of the Decree.” j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 497 a In Eguamwense v. Amaghizemwen (1993) 9 N.W.L.R. (Part 315) 38, the Supreme Court, per Othman Mohammed JSC, held:– b “It is settled law that, unless jurisdiction of the High Court to do so is clearly excluded, it has power to interfere with the decision of a statutory tribunal where the tribunal has reached its decision wrongly on a point of law.” c In this case, it is my considered view that the revocation of the bank’s licence is based on factors or circumstances cognisable under the following provisions of section 12 of BOFID: That the Republic Bank:– d (a) has insufficient funds to meet its liabilities 12(d); (b) has failed to comply with obligations by the Central Bank (the regulatory body). And the Head of State has approved the revocation. e I am therefore of the firm view that the Governor of the Central Bank has exercised his administrative function of revoking the operating licence of the Republic Bank in terms of sections 5 and 12 of the Banks and Other Financial Insti- f tutions Decree (1991) in such a way that leaves no room for the review of the exercise of that function by this Court. Having found that the revocation of the bank’s banking licence was duly revoked in terms of sections 5 and 12 of g BOFID, then the provision of section 49 thereof fully applies. Concerning, whether the revocation was done “good faith” in terms of section 49 aforesaid. h The Learned Senior Advocate very strenuously argues that the issue of “good faith” is the main fulcrum of the exercise of that power and drew the Court’s attention to the inclusion i in section 49(1) of BOFID of the following expression:– “Neither the Federal Government nor the bank nor any Officer of that Government or bank shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in GOOD FAITH in pursuance or in execution j of . . . any power conferred upon that Government, the bank or [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 498 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

such Officer by this Decree” (the emphasis and italics of “good a faith” is mine). Now, concerning “bad faith”, the antithesis of good faith). b Learned Senior Advocate, Ayanlaja, submits that the burden is on the respondents to show that they have acted in “good faith”. He further submits that there is no presumption of good faith in favour of the defendant; and notes that there is no evidence of good faith before the Court. Learned c S.A.N. further submitted that once bona fides of a statutory body is challenged, recourse is to be had to the document of challenge, in this case, the writ of summons. d I must refer at this stage to that renowned work, De Smith’s Judicial Review of Administrative Action (4ed) by J.M. Evans at page 337, the learned author writes as follows:– e “It has been said that if a man is required in the discharge of a public duty to make a decision which affects, by its legal consequences, the liberty or property of others and he performs that duty and makes that decision honestly and in good faith, it is a fundamental principle of our law that he is protected against civil liabil- f ity in respect of that decision . . .” At page 335, the learned author further wrote:– “The concept of bad faith eludes precise definition. But in relation to the exercise of powers, it may be said to comprise dishonesty or g fraud and malice. A power is exercised fraudulently if its repository intends to achieve an object other than that for which he believes the power to be conferred . . . A power is exercised maliciously if its repository is motivated by personal animosity h towards those who are directly affected by its exercise.” And at page 291, the author writes:– “. . . The burden cast upon a person seeking to impugn such an act or decision is likely to be a heavy one to discharge.” i The foregoing postulation, generally agrees with the authority in a learned work of D.D. Basu of India, upon which the learned Senior Advocate heavily relied and kindly made an extract available to the Court. j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 499 a I now apply the foregoing to the facts of this case. I have read the plaintiff’s motion on notice and the affidavit in support thereof. b Nowhere is it pleaded categorically that the Governor of the Central Bank acted with “bad faith” (that is, that he acted fraudulently, maliciously or dishonestly). Also there is no evidence to that effect. c In fact, paragraph 12 of the plaintiff’s affidavit in support avers as follows:– “12. I am aware from the exchange of correspondence between d the plaintiff and the 1st defendant that the financial position of the plaintiff has not deteriorated to a situation as to warrant the fatal sanction contained in section 12 of the Banks and Other Financial Institutions Decree, 1991.” e None of the said correspondence adverted to was annexed to the affidavit to afford the Court the materials upon which to determine that the Governor acted in good faith or lack of it. In the circumstance, I am unable to hold that that the Gov- f ernor acted either in bad faith, fraudulently or maliciously. I therefore hold that the Governor of the Central Bank properly exercised his powers within the meaning of sections 5 and 49 of the Banks and Other Financial Institution g Decree 1995, which have ousted unequivocally this Court’s jurisdiction. I therefore find, upon the evidence before me, that the revocation of the banking licence of the Republic Merchant h Bank, as published in the Revocation of Banking Licence (section 1.6 of 1995) is a proper exercise of those powers. (Those powers are administrative, rather than judicial powers.) i And I so find. 2. Right of Action The question of jurisdiction is intricately linked with the j issue of locus standi. [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 500 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The plaintiff must have the right or the locus standi to a maintain the action before the court can assume jurisdiction in the matter (vide Adesanya v. President of the Federal Republic of Nigeria (1981) 1 C.L.R. and RTEAN v. NURTW b (1992) 2 N.W.L.R. (Part 224) 381 at 391). Conversely, the court must have jurisdiction before it can adjudicate the case of the plaintiff (A-G Anambra State v. Okafor (1992) 2 N.W.L.R. (Part 224) 396 (S.C.); RTEAN v. c NURTW (supra)). There is no doubt that the plaintiff herein has the locus to institute these proceedings, whereas the court’s jurisdiction has, as found supra, been ousted by section 49 of BOFID. d In the case of Eguamwense v. Amaghizemwen (1993) 9 N.W.L.R. (Part 315) at 36, Mohammed JSC held inter alia as follows:– e “. . . All the decided authorities referred to in this appeal, disclose a settled locus that unless the jurisdiction of the Court is clearly excluded, the High Court has power to interfere with the decisions of statutory tribunals. It is also settled law that the Applicant can, f by way of declaration, apply to the High Court for such decision to be set aside.” The issue under this head is whether this Court can grant, by way of declaration, the reliefs which the plaintiff seeks in g the substantive suit herein. In this regard, I would wish once again to rely on De Smith’s Judicial Review of Administrative Action (supra)at h pages 501–502 where the learned author, relating to cases in which a declaration will not be granted, classified the following:– “(i) Where the plaintiff asserts a right not recognised by law. i (ii) Where the matter is placed within the exclusive jurisdiction of another tribunal. (iii) Where administrative remedies for a Breach of Statutory duty are exclusive of the High Court.” j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 501 a In this regard, the learned author at pages 501–502 writes:– “. . . In this class of cases, the Court will decline to retry an issue already determined by the appointed tribunal. The Courts will not b arrogate to themselves a quasi original or appellate jurisdiction where none, has been normally conferred upon them. And in any event, it is futile to make a declaration in an opposite sense to a determination validly made by a tribunal of competent jurisdiction.” c Now, in Eguamwense v. Amaghizemwen (supra), the Su- preme Court held inter alia:– “There is no limit to the power of the Court to grant a declaration’ except such limit as it may in its discretion impose itself. . . . The d Court indeed has power to interfere by way of declaration to correct fundamental errors of law committed by the “Prescribed Au- thority.” Mohammed JSC, at 36 and 39–40 held:– e “It is also settled law an aggrieved party can invoke the supervisory jurisdiction of the High Court by way of declaration to apply for such decisions to be set aside.” f His Lordship went on at 39–40:– “I have earlier said in this judgment that the High Court cannot make a parallel and inconsistent decision to that of the prescribed Authority and declare the respondent the person entitled to be conferred with the chieftaincy title. It is in a situation like this that the g High Court must consider the relevance of its Order before awarding a claim by way of a Declaration. Thus, even though I hold that the High Court has jurisdiction to declare the decision of the Oba invalid, it would not be proper for it to grant such a relief since it h would not exercise the ancillary jurisdiction and declare the respondent the right person entitled to be conferred with the Title of Ameghazenmon of Benin. The proper decision which the High Court should have made in this case, was to exercise its discretion and refuse to grant all the reliefs claimed by the respondent.” i From the foregoing therefore, it would not be appropriate for this Court to grant, for the benefit of the plaintiff, the declaratory orders sought since this Court cannot make the ancillary order to compel the second defendant to restore to j the plaintiff the enjoyment of his revoked banking licence. [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 502 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Accordingly, and upon the authority of the Eguamwense a case (supra), this is not an appropriate case in which to make the declaratory orders sought. This is more so as section 49 excludes civil action against the appropriate officers, b whereas section 48 specifically confers criminal jurisdiction on this Court. Therefore, this Court’s orders cannot avail in the circumstances of this case. 3. Procedural lapses c It is the strong contention of Ajayi, learned Counsel on behalf of the second defendant, and Olatunji, learned Counsel for the first defendant (by adoption), that the plaintiff’s suit herein was not commenced by due process or by the proper d procedure. My crisp answer to that is simply based on the decisions of higher courts following a long line of cases. e In the case of Nneji v. Chukwu (1988) 3 N.W.L.R. (Part 81) 184, the Supreme Court, inter alia, held:– “The attitude of the Supreme Court has always been that whenever it is possible to determine a case on its merits, the Court should not f cling to technicalities to refuse a complainant the opportunity of being heard . . .” The court went on:– “The Supreme Court has always been more interested in substance g than in mere form of a matter. Justice can only be done if the substance of the matter is examined. Reliance on technicalities leads to injustice . . .” It is thus clear that the prior responsibility of the Court of Appeal (as well as all other courts) is to hear the merits of h the case on appeal and decide according to those merits. Again, in the case of Hausa v. The State (1994) 6 N.W.L.R. (Part 350) 281, again, the Supreme Court inter i alia held at 306, as follows:– “Courts of law must do substantial justice and not technical justice. Hence, irregularity which derives from a breach of the rules of practice and procedure or an Order of Court made therein ought not to render the proceedings a nullity but a mere irregularity j [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J Republic Bank Ltd v. Central Bank of Nigeria and another 503 a which derives from a breach of the rules of practice and procedure or an Order of Court made thereon ought not to render the proceedings a nullity but a mere irregularity which Courts can order to be regularised.” b In this regard, I should advert to the proceedings before this Court on 14th July, 1995, when the court raised, suo motu, the mode in which this suit was commenced by writ rather than by way of an application for leave. After hearing an c address on the matter by Ayanlaja, S.A.N., I ruled as follows:– “The matter is now before the Court and in view of the urgency of the matter and to give prominence to the substance rather than pro- d cedural and technical issues, I shall accept this matter as properly before this Court and we shall proceed herefrom. In this regard, I shall rely on the provisions of the Federal High Court (Amend- ment) Decree, 1993 (1993 No. 46) . . . which requires this Court to e do in all circumstances, that which will secure the justice of the matter before the Court. And the justice of this matter requires that we proceed expeditiously.” And so we did. f On that occasion, the second defendant was represented by Bamidele Sanya, Esquire, learned Counsel, who did not object to the procedure or the Ruling of the Court supra, but raised the issue of jurisdiction. g Relying on the Supreme Court’s decisions in Nneji v. Chukwu supra and Hausa v. The State (supra) also, I had earlier condoned the issue of the technicality in the mode of commencing the action herein and I am not competent to h reopen the issue. Accordingly, the suit has been deemed to have been properly commenced, and so it is. For ease of reference therefore, the following is the finding i of this Court in this suit:– 1. The Revocation of the licence of Republic Bank Lim- ited to engage in the business of banking involves the exercise of a statutory administrative power, which j the Governor of the Central Bank, with the approval [1994 – 1996] 6 N.B.L.R. (PART I) (FEDERAL HIGH COURT, LAGOS DIVISION) Ukeje J 504 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

of the Head of State, Commander in Chief of the a Armed Forces, may revoke under section 12 of the Banks and Other Financial Institutions Decree. And, in terms of section 49 of the Decree, no cause of ac- b tion shall lie against the defendants in respect of any action flowing from the exercise of those powers. 2. In the absence of any convincing, or any proof at all, pointing to the exercise of that power in bad faith, the c exercise of that power is reserved for the donee of that power that is, the Governor of the Central Bank of Nigeria with due executive approval. It is not a power exercisable by this Court. And having determined that d that power was exercised in accordance with condition cognisable under section 12 of the Decree the jurisdiction of this Court, in this matter has been ousted. And no intervention of this Court can legitimately e avail, 3. Accordingly, the declaratory Orders sought shall not be made. 4. This matter is deemed to have been properly com- f menced and has been determined upon its merits. 5. In the result, the Notice of Preliminary Objection succeeds and the action herein dismissed. That is the finding of this suit. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

United Bank for Africa Ltd v. Citymark West Africa Ltd 505 a United Bank for Africa Limited v. Citymark West Africa Limited b COURT OF APPEAL, LAGOS DIVISION UWAIFO, AYOOLA, MUHAMMAD JJCA Date of Judgment: 15 NOVEMBER 1995 Suit No.: CA/L//194/92 c Banking – Bill of exchange – Promissory note – Definition of – Where dishonoured – Right of action thereon – Effect of dishonour on the instrument – Rights of holder, drawer or indorser on the instrument d Banking – Bill of exchange – Promissory note – Indorsee of promissory note – Extending time for drawer to pay without consent of indorser – Effect on obligations of indorser under the instrument e Facts The respondent brought an action against the appellant for the sum of N346,523.57 together with interest. The respondent got a contract from Imo State Government some time in f 1982 which it duly executed from loan facilities provided by the appellant. The loan was N1,950,000.00 and was granted in June, 1983. The Imo State Government issued a promissory note for g N3,024,000.00 to the respondent which was to mature in August, 1983. The respondent assigned, or in other words indorsed, the promissory note to the appellant as security for the said loan and interest thereon. At maturity the principal h loan and interest were to be deducted by the appellant from the proceeds of the promissory note and the balance paid over to the respondent. When the promissory note was presented on the due date, it was dishonoured. Although the appellant notified the respondent of the dishonour, it unilat- i erally and without the consent of the respondent granted the Imo State Government extension of time within which to pay the money due on the promissory note. Indeed, it was a form of agreement with Imo State Government for j instalmental payment. In the event it took about one year [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

506 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. from the maturity date of the promissory note to pay the a proceeds in full. The appellant then deducted the amount of loan and interest due thereon up to the maturity date of the promissory b note. It went further than that. It in addition, in effect, surcharged the respondent with interest on the loan for the period of one year it itself negotiated with the Imo State Government to honour the promissory note by instalments c and paid over N812,224.05 to the respondent. There was an underpayment of N346,523.57 which the respondent claimed it was entitled to together with interest thereon. The learned trial Judge held that the unilateral extension of d time granted by the appellant to the Imo State Government to meet its obligation under the promissory note discharged the respondent from liability thereunder. e Held – 1. Section 85(1) of the Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990 defines a promissory note as an unconditional promise in writing, made f by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of, a specified person or bearer. g Therefore a promissory note is obviously a contract of a conditional payment of debt. If it is dishonoured when it is presented for payment, in the ordinary way the right to sue upon the original debt revives as if not negotiable in- h strument had been taken. 2. Although the holder of a negotiable instrument is entitled to sue when it is dishonoured, the drawer or indorser who is the surety for the purpose of the instrument has i the equities of a surety. One of such equities is the right to receive notice of the dishonour, which must be given in due time or within a reasonable time. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

United Bank for Africa Ltd v. Citymark West Africa Ltd 507 a Another of such equities is that time for payment of the instrument cannot be extended without the consent of the surety. b 3. A promissory note or bill of exchange cannot be compromised by a holder in due course unilaterally with the maker or drawer to the detriment of the indorser as surety. c If a holder in due course of a bill of exchange extends time on his own beyond the maturity date of the instrument, he has created a contract between himself and the maker or drawer. In that case, the indorser must be re- d lieved of the result of that if it tends to impose any liability on him beyond his normal obligation under the instrument. The indorsee will accordingly not be permitted in equity to assert any right inconsistent with his own e conduct in unilaterally compromising the negotiable instrument. Not only that, he must bear whatever financial liabilities arise from that. In the instant case, the appellant being the creditor to f whom the promissory note was indorsed by the respondent to guarantee the payment of the loan at maturity was not entitled to extend the time for the Imo State Government (the principal debtor on the promissory g note) to realise the proceeds of the promissory note without the consent of the respondent and expect it to bear the consequences arising from such extension. 4. Where an indorsee of a promissory note presents the h instrument on the due date and it is dishonoured, he has two options. He could sue the indorser under the original loan agreement disregarding the promissory note or he may choose to sue on the promissory note for the money i and interest owed. In the instant case, the appellant failed to take either course. Instead it embarked unilaterally and behind the back of the respondent on a contract with the maker of j the promissory note to extend its life for instalmental [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

508 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

payments. This was a clear instance of waiver of right a under the promissory note by the appellant. It must bear the consequences of varying the tenure of the promissory note. b Dismissing the appeal.

Cases referred to in the judgment Nigerian c Ariori v. Elemo (1983) 1 S.C.N.L.R. 1 Awolesi v. N.B.N. Ltd (1962) 1 S.C.N.L.R. 276 d Foreign Duncan Fox and Co v. North and South Wales Bank (1880) 6 App. Cas. 1 Gunn v. Balckow Vanchan and Co (1875) L.R. 10 Ch. App. e 491 In Re Lord Chesham Cavendish v. Dacre (1886) 31 Ch.D. 466 f Lawrence v. Walmsley (1862) 142 E.R. 1356 Liquidators of Everend, Gurney and Co Ltd v. he Liquida- tors of the Oriental Finance Corporation Ltd (1974) 7 L.R. H.L 348 g Polak v. Everett (1876) 1 Q.B.D. 669 Rouguette v. Overmann (1875) L.R. 10 G.B. 525 Yeoman Credit Ltd v. Gregory (1963) 1 All E.R. 245 h Nigerian statute referred to in the judgment Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990, sections 48, 49, 50 and 85(1) i Counsel For the appellant: Ogunkeye (with him Osuji) For the respondent: Oyetibo (with him Ikotun) j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

United Bank for Africa Ltd v. Citymark West Africa Ltd 509 a Judgment UWAIFO JCA: (Delivering the lead judgment) This is an appeal against a judgment of Silva J delivered on 19th May, b 1989 in the High Court, Lagos. The plaintiff/respondent brought an action (as amended) against the defendant/ appellant for the sum of N346,523.57 together with interest. The short facts upon which the action was founded were that c the respondent got a contract from the Imo State Govern- ment sometime in 1982 which it duly executed from loan facilities provided by the appellant. The loan was for N1,950,000.00 and was granted in June, 1983. d The Imo State Government issued a promissory note for N3,024,000.00 to the respondent which was to mature in August, 1993. The respondent assigned, or in other words indorsed, the promissory note to the appellant as security for e the said loan and interest thereon. At maturity the principal loan and interest were to be deducted by the appellant from the proceeds of the promissory note and the balance paid over to the respondent. When the promissory note was pre- f sented on the due date, it was dishonoured. Although the appellant notified the respondent of the dishonour, it unilaterally and without the consent of the respondent granted the Imo State Government extension of time within which to pay the money due on the promissory note. Indeed, it was a g form of agreement with Imo State Government for instalmental payment. In the event it took about one year from the maturity date of the promissory note to pay the proceeds in full. h The appellant then deducted the amount of the loan and interest due thereon up to the maturity date of the promissory note. It went further than that. It, in addition, in effect, surcharged the respondent with interest on the loan for the i period of one year, it itself negotiated with the Imo State Government to honour the promissory note by instalments and paid over N812,224.05 to the respondent. There was an underpayment of N346,523.57 which the respondent j claimed it was entitled to together with interest thereon. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 510 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In a well-considered judgment, the learned trial Judge held a that the unilateral extension of time granted by the appellant to the Imo State Government to meet its obligation under the promissory note discharged the respondent from liability b thereunder. In the appeal against that judgment, the appellant has raised and canvassed eight issues. I consider them unnecessary proliferation. The respondent has reduced the issues in the appeal to two and I think they suffice. I shall c put them thus:– 1. Whether the appellant was entitled in law and or equity to charge interest on the loan granted to the respondent for the period occurring after the maturity d of the said promissory note when it was the appellant that unilaterally and without the prior consent of the respondent extended the time beyond its maturity date. e 2. Whether the respondent is entitled to the balance on the promissory note under normal circumstances together with the interest due on it as from the maturity date. f I must remark, with due respect, that the argument of learned Counsel for the appellant is completely in the ab- stract without any reference or relevance to the consequences of the unilateral action of the appellant in changing g the foundation of the contract engendered by the promissory note. A promissory note is defined in section 85(1) of the Bills of Exchange Act (Cap 35) Laws of the Federation of Nigeria, 1990 (effective from 9th August, 1917) as follows:– h “85(1) A promissory note is an unconditional promise in writing, made by one person to another, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to i the order of, a specified person or bearer.” It is obviously a contract of a conditional payment of debt. If it is dishonoured when it is presented for payment in the ordinary way the right to sue upon the original debt revives j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA United Bank for Africa Ltd v. Citymark West Africa Ltd 511 a as if no negotiable instrument had been taken (see Gunn v. Balckow, Vaughan and Co (1875) L.R. 10 Ch. App. 491). b When a negotiable instrument is dishonoured it does not mean that it no longer exists even though it could be regarded by the holder as if it had never been taken. The holder is entitled to sue the acceptor, the drawer or the in- c dorser, or all of them together on the instrument. The drawer and indorser are entitled to the equities of a surety (see Dun- can Fox and Co v. North and South Wales Bank (1880) 6 App. Case 1 at 19–20; Rouguette v. Overmann (1875) L.R. 10 Q.B. 525 at 537). What this means is that, although the d holder of a negotiable instrument is entitled to sue when it is dishonoured, the drawer or indorser who is the surety for the purpose of the instrument has the equities of a surety. e One of such equities is the right to receive notice of the dishonour (see sections 48–50 of the Bills of Exchange Act). The notice must be given in due time or within a reasonable time. See Yeoman Credit Ltd v. Gregory (1963) 1 All E.R. f 245 which decided that the principal may not add on to his own time for giving notice any time saved by the agent in giving notice to him. Another of such equities is that time for payment of the instrument cannot be extended without g the consent of the surety. I shall quote two passages from the opinion of Lord Cairns L.C. in The Liquidators of Everend, Gurney and Co Ltd v. The Liquidators of the Oriental Fi- nance Corporation Ltd (1974) 7 L.R. H.L 348. He said at h 360–361:–

“My Lords, it appears to me that after the case which was referred to at the Bar, decided by your Lordships’ House, that of Oakley v. i Pasheller 4 C1. and F. 207, it is impossible to contend, if after a right of action accrues to a creditor against two or more persons, he is informed that one of them is a surety only, and after that he gives time to the principal debtor without the consent and knowledge of the surety, that under those circumstances the rule as to the j discharge of the surety does not apply.” [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 512 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Then further down at 361, the Lord Chancellor said:– a “My Lords, it is quite true that the giving of additional security will not of itself discharge a surety, but if the additional security is given upon a contract to give time, in consideration of this giving b of the additional security, then time given under those circumstances, apart from the consent of the surety, is a discharge of the liability of the surety.” I shall cite and quote passages from two other cases before I comment. The first is Lawrence v. Walmsley (1862) 142 c E.R. 1356 at 1360 where Erle CJ said: “The well-known rule of law is that, if the creditor, without the consent of the surety, enters into a contract whereby time is given to the principal debtor, the surety is discharged, because the law d has imposed upon him the duty of using due diligence against the principal, and at all events precludes him from giving time by a binding contract.” The other case is Polak v. Everett (1876) 1 Q.B.D. 669 from e which I quote from the judgment of Blackburn J in extenso at 673–674 as follows:– “It has been established for a very long time, beginning with Rees v. Berrigton 2 Ves. 540 to the present day, without a single case going to the contrary, that on the principles of equity a surety is f discharged when the creditor, without his assent, gives time to the principal debtor, because by so doing he deprives the surety of part of the right he would have had from the mere fact of entering into the suretyship, namely, to use the name of the creditor to sue the principal debtor, and if this right be suspended for a day or an g hour, not injuring the surety to the value of one farthing, and even positively benefiting him, nevertheless, by the principles of equity, it is established that this discharges the surety altogether. The reason given for this, as stated in Samuel v. Howarth 3 Mer. 272, 279 h by Lord Eldon, is, because the creditor, by so giving time to the principal, has put it out of the power of the surety to consider whether he will have recourse to his remedy against the principal or not, and because he in fact cannot have the same remedy against the principal as he would have had under the original contract. i And he adds:– ‘The creditor has no right, it is against the faith of his contract, to give time to the principal, even though manifestly for the benefit of the surety, with out the consent of the surety.’ j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA United Bank for Africa Ltd v. Citymark West Africa Ltd 513 a The principle being, as I understand it, that as it is very undesir- able that there should be any dispute or controversy about whether it is for his benefit or not, there shall be the broad principle, that if the creditor does intentionally violate any rights the surety had b when he entered into the suretyship, even though the damage be nominal only, he shall forfeit the whole remedy.” The decision of the Supreme Court in Awolesi v. National Bank of Nigeria Ltd (1962) 1 S.C.N.L.R. 276; (1962) 1 All c N.L.R. 172 is to the same effect when it held that an agreement of a substantial nature altering a guaranteed contract, made without the knowledge and consent of the surety discharges the surety. d What I have tried to demonstrate from the above-cited cases and the observations made therein in those passages quoted is that the appellant, here being the creditor to whom the promissory note was indorsed by the respondent to guar- e antee the payment of the loan at maturity, was not entitled to extend the time for the Imo State Government (the principal debtor on the promissory note) to realise the proceeds of the promissory note without the consent of the respondent and f expect it to bear the consequences arising from such extension. Equity will interplay to protect the respondent against those consequences. In other words, a promissory note or bill of exchange cannot be compromised by a holder in due g course unilaterally with the maker or drawer to the detriment of the indorser as surety. If a holder in due course of a bill of exchange extends time on his own beyond the maturity date of the instrument, he h has created a contract between himself and the maker or drawer. In that case, the indorser must be relieved of the result of that if it tends to impose any liability on him beyond his normal obligation under the instrument. The in- i dorsee will accordingly not be permitted in equity to assert any right inconsistent with his own conduct in unilaterally compromising the negotiable instrument. Not only that, he must bear whatever financial liabilities arise from that. This j is only fair. This is what learned Counsel for the respondent [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA 514 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. copiously submitted, quite rightly in my view, in the respon- a dent’s brief of argument. Learned Counsel went further to say that when the promissory note was presented and dishonoured, the appellant b could either sue the respondent under the loan agreement discarding the promissory note or sue on the promissory note, making either or both of the maker (i.e. Imo State Government) and the indorser (i.e. the respondent) defen- c dants for the money and interest owed. It would have to elect which course to take based on the doctrine stated by Chitty J in In Re Lord Chesham Cavendish v. Dacre (1886) 31 Ch.D. 466 at 473 that:– d “The principle on which the doctrine of election is based is that a man shall not be allowed to approbate and reprobate; that if he approbates he shall do all in his power to confirm the instrument which he approbates. The consequences of such a principle cannot e be legitimately carried beyond the principle itself; if a man approbates, his obligation is confined to his adopting the instrument as a whole and abandoning every right inconsistent with it.” If the appellant had taken either course, which it must do f timeously, the respondent could immediately have been enabled to protect itself by suing the maker of the promissory note (i.e. Imo State Government) for the value of the contract it did for that Government which was covered by the promissory note. g But the appellant failed to take either course. Rather it embarked unilaterally and behind the back of the respondent on a contract with the maker of the promissory note to extend h its life for instalmental payments. This was a clear instance of a waiver of right under the promissory note by the appellant. In Ariori v. Elemo (1983) 1 S.C.N.L.R. 1 at 13; (1983) 1 S.C. 13 at 48–49 cited by learned Counsel for the respon- i dent, Eso JSC observed:– “The concept of waiver must be one that pre-supposes that the person who is to enjoy a benefit or benefits, but he either neglects to exercise his rights to the benefit, or where he has a choice of two, he decides to take one but not both . . . There is no doubt that, j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Uwaifo JCA United Bank for Africa Ltd v. Citymark West Africa Ltd 515 a a man who is not under any legal disability, should be the best Judge of his own interest. If therefore having full knowledge of the rights, interests, profits or benefits conferred upon or accruing to him by and under the law, but he intentionally decides to give up b all these, or some of them, he cannot be heard to complain afterwards that he has not been permitted the exercise of his rights, or that he has suffered by his not having exercised his rights. He should be held to have waived those rights. He is, to put it in an- c other way, estopped from raising the issue.” The case rests entirely on the equity which the respondent is entitled to in the circumstances. The appellant must bear the consequences of varying the d tenure of the promissory note in question. Having got the proceeds thereof through the means he adopted without the consent of the respondent, it must credit the respondent in full with the balance due as at maturity together with interest e for the period of delay in doing so. I think the learned trial Judge arrived at the right decision. This appeal lacks merit and is dismissed with N3,000 costs. MUHAMMAD JCA: I have had the privilege of reading in f advance the judgment of my learned brother, Uwaifo JCA, just delivered. I agree with his reasoning and the conclusion he reached. When the appellant presented the promissory note on the due date and it was dishonoured, the appellant g had two options. He could sue the respondent under the original loan agreement disregarding the promissory note or he may choose to sue on the promissory note the money and interest owed. The appellant has done neither. Instead the h appellant went behind the respondent’s back and entered into a new agreement varying the tenure of the promissory note. In my opinion the appellant must bear the consequences of this new agreement. I agree the appeal lacks merit and it is i dismissed with N3,000 costs. AYOOLA JCA: I agree. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION)

516 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a Lagricom Company Limited v. Union Bank of Nigeria Limited and Others b COURT OF APPEAL, BENIN DIVISION AKPABIO, AKINTAN, IGE JJCA Date of Judgment: 8 DECEMBER 1995 Suit No.: CA/B/163/92

Banking – Banker’s draft – Meaning of c Banking – Ordinary cheque and bank draft – Difference between – Whether banker may refuse to honour bank draft

Facts d The plaintiff/appellant instituted an action against the respondents seeking inter alia that the first respondent was wrong in debiting and stopping the bank draft for the sum of N2,400,000 (Two Million, Four Hundred Thousand Naira). e The third respondent issued a bank draft drawn on the first respondent bank for the sum of N2,400,000 (Two Million, Four Hundred Thousand Naira) in favour of the appellant. He (third respondent) later wrote to the first respondent and f stopped the draft when according to him, the appellant refused to release the tonnes of cocoa which he paid for. The appellant however contended that the N2,400,000 (Two Mil- lion, Four Hundred Thousand Naira) was for outstanding g indebtedness and not for a fresh consignment of cocoa. The Learned trial Judge dismissed plaintiff’s case whereupon it appealed to the Court of Appeal. h Held – 1. The expression “banker’s draft” means a draft payable on demand by or on behalf of a bank upon itself, whether payable at the head office or some other office i of the bank. 2. While a banker may refuse to honour an ordinary cheque on the ground that the drawer has no money in his account to cover the amount in the cheque, a bank draft on j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION)

Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 517 a the other hand is payable at sight regardless of whether the person on whose behalf the draft was issued had money in his account or not. b In the instant case, the bank draft for the sum of N2,400,000 (Two Million, Four Hundred Thousand Naira) was unlawfully countermanded. Appeal allowed. c Cases referred to in the judgment Nigerian d Akinloye v. Eyiyola (1968) N.M.L.R. 92 Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372 Ezeani v. Ejidike (1964) 1 All N.L.R. 402 e Nwuke v. Okere (1994) 5 N.W.L.R. (Part 343) 159 P.A. Oguigo and Sons Ltd v. C.O.P. (1991) 2 N.W.L.R. (Part 177) 46 U.B.A. Ltd v. Ibhafidon (1994) 1 N.W.L.R. (Part 318) 90 f Woluchem v. Gudi (1981) 5 S.C. 291

Nigerian statute referred to in the judgment Bill of Exchange Act, 1950, sections 27(2), 83(1) g Counsel For the appellant: L.O. Fagbemi (holding Chief Afe Baba- h lola SAN’s brief) For the second respondent: D.V.F. Olateru-Olagbegi (holding Chief F.R.A. Williams SAN’s brief) For the sixth respondent: O.A. Bode, Acting Director of i Litigation and Advisory Services, Ondo State.

Judgment AKPABIO JCA: (Delivering the lead judgment) This is an j appeal against the judgment of Aguda, J, of the High Court [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 518 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. of Ondo State, holden at Akure in suit no. HOD/21/89 deliv- a ered on 17 January 1991 wherein he dismissed in its entirety the plaintiff’s claim against the third and fourth defendants jointly and severally for the sum of N3,205,000 being the b value of cocoa supplied to them by the plaintiff for which they failed to pay. The alternative claim of N2,400,000 against the first defendant and an injunction prohibiting the first, fifth and sixth defendants from paying the said sum of c N2,400,000 to the second defendant as well as general damages of N5,000,000 against the first, third and fourth defendants for breach of their obligations were also dismissed. On the other hand, the third defendant’s counter-claim to the d tune of N600,000 was allowed, less the sum of N5,000 being a loan taken by the third defendant from the plaintiff, with total costs of N1,750 awarded in favour of the first defendant; N3,500 in favour of the second defendant; N3,500 in favour of the third and fourth defendants; N1,750 in favour e of the fifth defendant, and N1,750 in favour of the sixth defendant, making a total of N12,250 all against the plaintiff.

The claim of the plaintiff as finally formulated under para- f graph 44 of his second further amended statement of claim at pages 497–499 of the records reads as follows:– “1. Declaration that the plaintiff is entitled to the value of the promissory note; to wit:– Union Bank of Nigeria Limited g Draft No. 922052 dated 24th February, 1985 made by the first defendant in favour of the plaintiff for the sum of N2,400,000 payable on demand by the first defendant’s Ile- Ife branch and which said note has not been paid despite its presentation. h 2. An Order directed to the first defendant to pay to the plaintiff the sum of N2,400,000 being value of the promissory Note to wit: Union Bank of Nigeria Limited Draft No. 922052 dated 24th February, 1989. i 3. An Order directed to the defendants jointly and severally to pay to the plaintiff an amount of money representing 25% of the sum of N2,400,000 as damages for the unlawful delay and/or stoppage of the payment of the promissory Note; to Wit: Union Bank of Nigeria Ltd Draft No. 922052 dated j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 519 a 24th February, 1989 for the period 30th April, 1990 till the date judgment is delivered in this suit. 4. An Order of injunction restraining the first, fifth and sixth b defendants from paying the said value of the promissory Note: to wit: Union Bank of Nigeria Limited Draft No. 922052 of 24th February, 1989 to the second defendant to any other person other than the plaintiff. 5. An Order directed to the defendants jointly and severally to c pay to the plaintiff a sum of N146,000 per week with effect from the 27th February, 1989 until the end of April, 1989 being damages for unlawful delay and/or stoppage of payment of the said value of the promissory Note to wit: Union Bank of Nigeria Limited Draft No. 922052 of 24th Febru- d ary, 1989. 6. An Order directed to the defendants jointly and severally to pay to the plaintiff an amount of N360,000 representing damages for the period May to October, 1989 for unlawful e delay and/or stoppage of payment of the said value of the promissory Note” To wit: Union Bank of Nigeria Limited Draft No. 922052 of 24th February, 1989. 7. An Order directed to the defendants jointly and severally to pay to the plaintiff a sum of N3,000,000 as damages or loss f of profit arising out of the unlawful delay and/or stoppage of payment of the value of the promissory Note: to wit: Un- ion Bank of Nigeria Limited Draft No. 922052 of 24th Feb- ruary, 1989 for the months of November and December, g 1989. 8. An Order directed to the defendants jointly and severally to pay to the plaintiff a sum of N4,500,000 as damages or loss of profit for the months of February, March and April, 1990 arising out of the unlawful delay and/or stoppage of pay- h ment of the value of the promissory Note to wit: Union Bank of Nigeria Limited Draft No. 922052 of 24th Febru- ary, 1989. 9. An Order directed to the third and fourth defendants to pay i to the plaintiff a sum of N105,000 being money owed to the plaintiff in respect of cocoa purchased and evacuated by the third and fourth defendants, which they have failed or refused to pay in spite of repeated demands. 10. An Order directed to all the defendants to pay to the plaintiff j an amount representing 18% per annum, on all the several [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 520 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

judgment debts, from the date of judgment until the day a debt is finally liquidated. B. Alternative to (1)–(10) Above, the plaintiff Claims against the defendants jointly and severally the following reliefs:– b 11. Declaration that the second, third and fourth defendants are owing the plaintiff the sum of N2,505,000, N2,475,000 value of cocoa supplied by the plaintiff to the third and fourth defendants at Ile-Ife between 21st December, 1989 at their request and N30,000 advanced to them at their request c which the third and fourth defendants have failed or refused to pay in spite of repeated demands. The payment was to be effected by bank draft issued in Ondo by Union Bank, Ondo. 12. Order for payment by the first, second, third and fourth de- d fendants to the plaintiff of the said sum of N2,505,000. 13. Order directed to the defendants jointly and/or severally to pay to the plaintiff the sum of N146,000 per week with effect from 27th February, 1989 until the end of April, 1989, e being special damages for unlawful delay and/or stoppage of the sum of N2,400,000 as per the first defendant’s draft No. A922052 of 24th February, 1989. 14. Order directed to the defendants jointly and/or severally to pay to the plaintiff an amount of N360,000 representing f special damages for the period May – October ending 1989 for unlawful delay and/or stoppage of the sum of N2,400,000 as per first defendant’s draft No. A922052 of 24th February, 1989. g 15. Order directed to the defendants jointly and/or severally to pay to the plaintiff a sum of N3,000,000 as damages or loss of profit arising out of the unlawful delay and or as per first defendant’s draft No. A922052 of 24th February, 1989 for the months of November, and December, 1989. h 16. An Order directed to the defendants jointly and or severally to pay to the plaintiff a sum of N4,500,000 as damages or loss of profit for the months of February, March and April, 1990 arising out of the unlawful delay and/or stoppage of i the sum of N2,400,000 as per first defendant’s Draft No. A922052 of 24th February, 1989. 17. An Order directed to the defendants jointly and severally to pay to the plaintiff an amount of money representing 25% of the sum of N2,400,000 as damages for the unlawful j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 521 a delay and/or stoppage of the sum of N2,400,000 as per first defendant’s Draft No. 922052 of 24th February, 1989 for the period April, 1990 till the date judgment is delivered in this suit. b 18. An Order directed to all the defendants to pay to the plaintiff an amount representing 50% as interest per annum on the judgment from the date of judgment until the day the debt is finally liquidated.” c Although the record of proceedings in this case went as far as 834 pages divided into three volumes, the facts of the case were relatively simple and straightforward. d The case of the plaintiff, as given by its managing director, Mr Kayode Ola (PW2) was that sometime in November, 1988, the third and fourth defendants approached him and requested to be allowed to buy cocoa in bulk from the plaintiff. This was agreed to on payment of the purchase price. e Business then proceeded on “cash and carry” basis until De- cember, 1988 when the third and fourth defendants made representations to the plaintiff that they were not in a position to pay for all the produce requested by them, because f the managing director of Messrs. Phoenix Motors Ltd, from whom they would have collected money to pay for their purchases had travelled abroad. The third and fourth defendants were duly allowed to carry away cocoa on credit. g From thence upwards payment began to be made on irregular basis with the defendants falling into arrears. Then on 21st December, 1988, the third and fourth defendants succeeded in liquidating their indebtedness for all purchases h made up to that date. However, on the 21st December, 1988, after settling their indebtedness, the third and fourth defendants started evacu- ating cocoa with the promise that they would pay for them i later. The total quantity of cocoa which they evacuated from plaintiff between that date and the second of February, 1989 was 77 tons which at the agreed price of N18,000 per ton amounted to N13,950,000. Between 21st December, 1988 j and 21st February, 1989, the total payment made by the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 522 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. third and fourth defendants to the plaintiff in part-payment a of the debt was N11,475,000, leaving a balance of N2,475,000 still owing. However, on 9th December, 1988, the plaintiff had advanced the third and fourth defendants b the sum of N5,000 and on 23rd January, 1989 the plaintiff also advanced them a further sum of N25,000. The total indebtedness of the third and fourth defendants to the plaintiff as at 21st February, 1989, therefore stood at N2,505,000. At c the end of January, 1989, the plaintiff demanded immediate settlement of all outstanding indebtedness from the third and fourth defendants. In response to this demand, the third defendant wrote a letter to the managing director of the plain- d tiff, Mr Kayode Ola (PW2), on 1st February, 1989, promising that he would settle the bills in respect of the produce earlier supplied, but which they failed to do. The said letter was later tendered and admitted as exhibit “LCL. 7” in these proceedings. Later, the third and fourth defendants still e wanted more cocoa on credit, as a result of which the third defendant issued his personal cheque for N3,205,000 to the plaintiff to hold on to it pending the clearance of a draft he had lodged with the first defendant. Then on 4th February, f 1989, the third defendant brought a draft for N2,400,000 to the plaintiff made by the first defendant in favour of the plaintiff as the payee, and payable at the first defendant’s branch at Ile-Ife on its immediate presentation, in part pay- g ment of the total debt of N2,505,000 and immediately thereafter asked to be allowed to evacuate more cocoa on credit. PW2 however insisted that further evacuation will not be allowed until the outstanding balance of N105,000 was paid h in full. The said draft was later paid into plaintiff’s account at the first defendant’s branch at Ile-Ife on the 24th Febru- ary, 1990. Following the plaintiff’s refusal to allow further evacuation of cocoa, the third defendant threatened that he i would stop the draft which he had paid. It appears he actually did this, because on 27th February, 1989, the plaintiff received a letter from the Union Bank, Ile-Ife returning the said draft unpaid. The reason given for not paying the draft j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 523 a was that it was “irregularly drawn and that the endorsement was not clear”. Later on 27th February, 1989, one DSP, Mrs Igbinadolor, b came to Modakeke and arrested PW2 and his father and took them to the Nigeria Police Headquarters, Ibadan, and detained them there. The said DSP, Igbinadolor also recovered from the plaintiff’s Counsel the draft of N2,400,000 issued c by the first defendant in favour of the plaintiff. Upon investigation it was found that there was a complaint by one Mau- rice Zard of the second defendant that the third defendant collected money from him for a supply of cocoa which he d failed to supply to the second defendant. It was also discovered that the second defendant was using the fifth and sixth defendants to recover the draft from the third and fourth defendants who wanted to collect the value of the draft from e first defendant and pass same to the second defendant. In view of all the foregoing the plaintiff instituted this action jointly against the six defendants claiming against them as already set out above. f In their defences each of the defendants filed a statement of defence in which they either denied the allegations made against them or tried to justify same. g Starting from the first defendant (Union Bank of Nigeria Ltd) they filed an 11-paragraph amended statement of defence in which they contended first that the statement of claim did not disclose any cause of action against them, and so the claim against them should be dismissed. In the alter- h native the first defendant admitted that the draft for N2.4 million was collected from plaintiff, but averred that the said draft was released to the police on a court order dated 6th March, 1989 on the promise of the police to use it as an ex- i hibit. The first defendant also averred that it had no alternative but to take steps to see that the Draft for N2.4 million was not honoured upon receiving representations from the third defendant that there was possibility of fraud resulting j in total loss of the amount involved to his customer. A letter [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 524 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. from the third defendant, addressed to the first defendant a dated 24th February, 1989, was to be relied upon in support of the above averment. The second defendant, Kopek Ltd, also filed a 12-paragraph statement of defence in which it b denied being liable to the plaintiff in respect of the claim made against it in this action. He stated further that the third defendant was, at all material times, a customer and close friend of the plaintiff’s managing director (Kayode Ola) and c regularly purchased cocoa from him, from time to time. He then averred that the third defendant had obtained from him in bank drafts money totalling N2m for the purchase of 250 metric tons of cocoa from the plaintiff, but third defendant d still came back to say that the plaintiff did not allow any evacuation of cocoa, notwithstanding that he had been paid the full purchase price. Based on the foregoing facts, the second defendant pleaded that he became reasonably suspi- cious that he (second defendant) may be the victim of a care- e fully planned scheme to deprive him of his money by fraud, and so he reported the whole matter to the police. As for the third defendant who appeared to be the principal f defendant in this case, he filed an amended statement of defence and counter-claim in which the pertinent averments were as follows:– First the third defendant clarified the position between him g and the fourth defendant by saying that he was never in any partnership with fourth defendant. He averred that the fourth defendant only introduced him to the managing director of the plaintiff company as a cocoa trader, and that he and h fourth defendant never jointly purchased cocoa from the plaintiff. All the purchases, made by himself, were strictly between him and the plaintiff and no more. The third defendant then disputed the unit price of cocoa purchased from the plaintiff. According to him the initial price per ton of co- i coa was N12,000 sometime in 1988, which however gradu- ally rose to N16,000 in January, 1989, as the highest price. He denied ever paying N19,000 to the plaintiff as the price of cocoa per ton. Reverting to the main body of the claim the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 525 a third defendant denied ever telling plaintiff that the managing director of Phoenix Motors Ltd, or any other person for that matter travelled abroad. He averred that he neither b asked for credit nor took cocoa on credit from the plaintiff. All purchases of cocoa made by him from the plaintiff were fully paid for. He emphasised that neither alone nor jointly with the fourth defendant or any other person whatsoever c did he evacuate any cocoa from the plaintiff’s company with promise to pay later. All purchases made by him the third defendant from plaintiff were fully paid for, the third defendant however admitted receiving only the sum of N5,000 from the plaintiff on or about 8th December, 1988 as an ad- d vance, and not the sum of N25,000 received on 23rd Janu- ary, 1989 as averred by the plaintiff. Regarding the sum of N2,400,000, which is the main bone of contention in this appeal, the third defendant admitted e paying the said sum to the plaintiff, but said it was for a fresh order for 150 tonnes of cocoa at N16,000 per ton and not as part payment of any debt as he was not indebted to the plaintiff at all on cocoa. He had earlier paid the sum of f N1,600,000 to PW2 by bank draft for 100 tonnes of cocoa which had not yet been delivered. Finally, it was averred by the third defendant that after paying the sum of N2,400,000 to plaintiff through its man- g aging director (PW2), and providing vehicles and labour to evacuate the 250 tonnes of cocoa on 24th February, 1989 the said managing director disappeared with the bank draft under the pretext that he was going to check the genuineness h (he called it “genuity”) of the said bank draft from his bankers and failed to show up. When plaintiff failed to deliver the 250 tonnes of cocoa as agreed, the third defendant reported the situation to his banker and asked them to stop the i bank draft, and this was done. Meanwhile, the plaintiff had by 22nd February, 1989 drawn various cheques on the N1,600,000 earlier paid to him to clear up everything and there was nothing to stop as j at 24th February, 1989. The third defendant then averred [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 526 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. that up till the time of the pleading, the plaintiff had re- a fused/neglected/failed to deliver the 100 tonnes of cocoa for which it had received payment or any quantity of cocoa at all to the third defendant in spite of repeated demands. He b therefore counter-claimed from the plaintiff as follows:– COUNTER-CLAIM “(a) A declaration that the plaintiff is owing the 3rd defendant the sum of N1,600,000 being an amount paid by the 3rd de- c fendant to the plaintiff on the 21st day of February, 1989 at Ile-Ife for 100 tonnes of cocoa which the plaintiff agreed to sell and deliver to the 3rd defendant at Ile-Ife which the plaintiff has failed neglected/refused to deliver to the 3rd defendant and which sum it has also refused to refund to the d 3rd defendant despite repeated demands. (b) An order for the payment by the plaintiff to the 3rd defendant of the said sum of N1,600,000. (c) Interest at the rate of 18% per annum on the said sum of e N1,600,000 from 21/2/89 until judgment is delivered in this case and interest at the rate of 10% per annum from the date of judgment till final liquidation of the said sum of N1,600,000.” f As regards the fourth defendant, he also filed an 18- paragraph statement of defence in which he denied being in any form of business partnership with the third defendant. He averred that he only introduced the third defendant to the plaintiff’s managing director (PW2) as a trader in cocoa. But g he denied that he and the third defendant ever jointly purchased cocoa from plaintiff. He averred further that he was not at all indebted to the plaintiff for any sum of money either alone or jointly with the third defendant. Finally, with h reference to the controversial bank draft for N2,400,000, the fourth defendant averred that the said bank draft was not for part payment of any debt owing to the plaintiff as the fourth defendant was not indebted to them at all. He therefore i urged the court to dismiss plaintiff’s claim against him. The fifth defendant who was later altered from “The Nige- ria Police” to read “Inspector-General of Police” also filed a 27-paragraph statement of defence denying almost all the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 527 a allegations of fact made by the plaintiff against the third and fourth defendants, which really did not concern the fifth and sixth defendants. Perhaps the only relevant averment in the b statement of defence of the fifth defendant was paragraph 22 which reads as follows:– “With further reference to paragraph 37 of the Statement of Claim, the 5th Defendant avers that the 2nd Defendant reported a case of c obtaining N4.2 million under false pretence to the 5th and 6th De- fendants for which they are duty bound to investigate hence their involvement in this case. The said petition is hereby pleaded.” All other averments in their statement of defence were more or less hearsay, and need not be reproduced here. d The same thing may also be said about the sixth defendant who filed a 26-paragraph statement of defence replying to allegations that were not made against him. However, the e sixth defendant also gave some account of police investigation carried out by them since being brought into the matter. The most important averments are that on receiving the complaint from second defendant, the police arrested the plaintiff and took statement from him on 28th February, f 1989. They also took statements from the third defendant. They also froze the account of the plaintiff with the Union Bank Ile-Ife from 1st December, 1988 to 28th February, 1989. It was further revealed that consequent to a court’s or- g der of 6th March, 1989, the third defendant wrote to the Un- ion Bank to re-purchase its earlier draft no. A922052 of 24th February, 1989 which he stopped by his letter of 24th Feb- ruary, 1989. Following the re-purchase of his earlier draft h for N2.4m, the third defendant was also asked to issue another draft for N2.6 million in favour of the second defendant. The third defendant was then said to have issued his personal cheque for N2.6 million to second defendant. i Finally, it was averred at paragraph 22 of the sixth defendant’s statement of defence that:– “The 6th defendant avers that the 3rd and 4th defendants as well as Kayode Ola (Plaintiff) made Statements as to how to recover the j money in dispute amicably consequent upon which Mr Kayode [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 528 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Ola and the 3rd and 4th defendants were released on bail. The de- a fendant was to report back on this to the Police on the 4th April, 1989.” The above were the state of pleadings when this case went to b trial. At the trial itself only the plaintiff and one of his witnesses as well as third and fourth defendants offered oral evidence. The first, second, fifth and sixth defendants rested their cases on that of the plaintiff. After the trial which c lasted several days and involved a large amount of both oral and documentary evidence, the learned trial Judge finally came out with a 65-page judgment in which he first stated at page 685 of the records as follows:– d “The version given by the plaintiff is more convincing than the one given by the 3rd defendant, particularly when one takes into consideration the personal cheques given by the 3rd defendant the purpose for which he has not satisfactorily explained except for the one in the sum of N3,205,000 given on 21/2/89 . . .” e But curiously enough the learned trial Judge at the end of the judgment turned round and dismissed in its entirety the plaintiff’s action against each and every one of the defendants. It did not end there, he went further and granted the f counter-claim of the third defendant to the tune of N600,000 less a N5,000 loan taken by the third defendant from the plaintiff, leaving a balance of N595,000 which was duly awarded with costs, as already set out in the introductory g paragraph of this judgment. The plaintiff being dissatisfied with the said judgment has appealed to this Court on 16 original grounds of appeal, which were later amended with leave of this Court. Briefs of h arguments were later filed and exchanged and issues for determination formulated. For the plaintiff who will hereinafter be referred to as “the appellant” the following five issues were formulated:– i “In the respectful submission of the appellant, the following are contended to be the issues for determination in the matter:– (i) Whether the learned trial Judge made the proper findings of fact in the case based on the materials, the demeanour of the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 529 a witnesses and on the strength, cogency and standard of the evidence before him. (ii) Whether or not the bank draft drawn by the first defendant b in favour of the plaintiff for the sum of N2.4 million principal subject matter of the suit was not an unconditional promise to pay the value to the plaintiff. (iii) Whether the trial Judge was right when he allowed the third defendant’s Counter-Claim and dismissed the plaintiff’s c case against each and every defendant. (iv) Whether the learned trial Judge was right in refusing to assess the quantum of damages and refused to award same against the respondents jointly and severally. d (v) Whether or not a Claim was made against the second defendant in the Writ and the Amended statement of claim.” In response to the above, the following four different issues were formulated on behalf of the first defendant who will e hereinafter be referred to as the “first respondent”:– “(i) Whether on the evidence before the Court, the plaintiff treated the draft, exhibit A, as a promissory note or as a cheque. f (ii) Whether in the light of the answer to Question (i), it was lawful for the first defendant to have countermanded payment on the said draft. (iii) If the answer to Question (ii) is in the negative, whether it g was lawful for the first defendant to have dishonoured the said draft. (iv) Whether the claims of the plaintiff for damages are sustain- able in law.” h On behalf of the second defendant, who will hereinafter be referred to as “second respondent”, the following two issues were formulated:– “The second defendant submits that having regard to the aver- i ments in the statement of claim and the various other pleadings, the evidence before the court, the Grounds of Appeal and the Brief filed in support thereof, the questions for determination in this appeal are as follows:– (i) Whether the averments contained in the statement of claim j and the evidence led in support thereof are capable of [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 530 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

sustaining any of the reliefs claimed in this action against a the second defendant. (ii) Whether the court below was correct in arriving at the conclusion that the action against the second defendant ought to b be dismissed.” However, the third and fourth defendants against whom the bulk of the allegations in this case were made, did not file any Brief even though our records show that they were duly c served with notice and grounds of appeal and other hearing notices in this appeal. The same goes for the fifth defendant who did not also file any brief in this case. These three defendants, will hereinafter be referred to as the “third, fourth d and fifth respondents” as they were duly served with all the appeal papers and hearing notices in this appeal. They will be deemed to have admitted the truth of everything said in the appellant’s brief insofar as such is borne out by the records. However, the sixth defendant, who will hereinafter be e referred to as the “sixth respondent”, duly filed a 5-page Brief in which only one issue for determination affecting the sixth respondent was formulated as follows:– “(i) Whether on the available evidence the 6th Respondent f could be held jointly and severally liable in damages to the Appellant”. I have carefully considered all the issues formulated above as well as the evidence on the records against those who did g not file any Brief, and find that all the controversial questions canvassed in this appeal can be resolved under the omnibus issue formulated by the appellant as his Issue No. 3 as follows:– h “Whether the trial Judge was right when he allowed the third defendant’s counter-claim and dismissed the plaintiff’s case against each and every defendant.” It should be noted that appellant himself argued this issue i first in his Brief, before going to argue the other issues. On the oral hearing of this appeal on 20th September, 1995, Mr L.O. Fagbemi, the learned Counsel who held the brief of Chief Afe Babalola, SAN for the appellant, urged the court j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 531 a to uphold Issue No. 3, and make it a touchstone by which other issues should be approached. I shall therefore do this indirectly, by considering the ap- b pellant’s case against each of the respondents with a view to seeing whether the case against each respondent was properly dismissed or not. By so doing all the issues formulated by the different respondents would have been considered. c I shall however proceed in the reverse order by considering the case against the sixth and fifth respondents first, followed by the case against the fourth and second respondents; and finally the case against the third and first respondents d who are by far the most important parties in this appeal. The case against sixth and fifth respondents. The principal cause of action in this case was the alleged e wrongful stoppage of a bank draft for N2,400,000 which the third and fourth respondents had brought to plaintiff’s shop on 24th February, 1989 to pay for cocoa which they had purchased and taken delivery of before the said date. The said f bank draft No. 922052 dated 24th February, 1989 was issued by the first respondent (Union Bank of Nigeria Ltd) at its Ondo Main Branch, and made payable to the plaintiff at its Ile-Ife branch. The said draft was actually handed over to the g appellant and duly paid into his account. But, following a refusal by the appellant to let the third and fourth respondents evacuate more cocoa on credit, the third respondent threatened to stop the said draft, and actually did so as a result of which the said draft was returned to appellant unpaid. h Some days after the above incident, the police from both the Federal and Oyo State Command (i.e., the fifth and sixth respondents came and arrested the appellant and his father and took them to their Head Office at Ibadan, where they were i detained on a possible charge of obtaining money by false pretences on a complaint lodged by the second respondent, who had in fact provided the funds by which the third and fourth respondents made their various purchases from the j appellant. In the course of their investigation, the police also [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 532 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. arrested the third respondent and also froze their bank ac- a counts. At the end of the investigation all the parties were released on bail. It was soon after their release that the appellant instituted this action. At the trial at the court below, b there was no evidence that either the fifth or sixth respondents ordered the third respondent to stop the payment of the bank draft to appellant. In fact the evidence was that it was on 25th February, 1989 that the second respondent made his c complaint to the police, while the stoppage of the Draft had already taken place on 24th February, 1989. Based on this evidence, Mr Boade, the learned Assistant Director of Liti- gation and Advisory Services, in Oyo State Ministry of Jus- d tice, Ibadan has urged us to dismiss this appeal against the sixth respondent as the available “evidence before the lower court show that the sixth respondent was not responsible in any way for the stoppage of the payment of the bank draft for the sum of N2.4 million which is the basis of the claim e of the appellant. Against this argument, the appellant had no answer besides the fact that the fifth and sixth respondents directed the third f respondent to “re-purchase” the draft, after it had been stopped, and issue a new cheque to pay the proceeds to the second respondent. I am of the view that even if the fifth and sixth respondents had directed the third respondent to “re- g purchase” the draft and pay the proceeds to the second respondent, this cannot be said to be the same thing as “stoppage” of the draft which had already taken place before the fifth and sixth respondents were brought into the scene by h the second respondent. This is not a case of unlawful arrest or wrongful detention or unlawful imprisonment, which is the very worst allegations that could have been made against the fifth and sixth respondents. The learned trial Judge, Aguda, J was therefore justified in dismissing the claim i against the fifth and sixth respondents. The appeal of the appellant against the fifth and sixth respondents will therefore also be dismissed notwithstanding the failure of the fifth respondent to file a brief. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 533 a The case against the fourth respondent. After a careful study of all the evidence adduced by the appellant at the trial court, I find that the only evidence b against the fourth respondent is that he was a former school mate of the appellant, who had introduced the third respondent to the appellant, as a Cocoa Buying Agent, and thereafter was allowed to be buying cocoa from the appellant, ini- c tially on “cash and carry” basis, but later on short term credit basis. It may be that these facts led the appellant to assume that both the third and fourth respondents were business associates or were in partnership in the legal meaning of that d word. But both the third and the fourth respondents in their pleadings have denied being in partnership or in any way trading together. And this has not been controverted or falsi- fied by the appellant. The onus was on the appellant to have e proved his assertion as required by section 134 of our Evi- dence Act – “He who asserts must prove.” He did not, for example, go to the Company Registry or Registrar of Busi- ness Names to obtain a Certificate that the third and fourth respondents were business partners, so as to be “jointly and f severally” liable for the debts to the appellant. Even the pleadings of the appellant did not give any indication as to the basis of the joint liability of the third and fourth respondents. Paragraph 4 of the “second further amended statement g of claim” of the appellant merely stated as follows:– “The third and fourth defendants are cocoa traders whose place of business is at 44, Olusegun Street, Ondo.” It is my view that in the same way that a man and a woman h who live in the same compound are not necessarily husband and wife, so also the fact that two traders use the same place of business would not necessarily make them “partners” without more. There is also the fact that none of the docu- i ments tendered in this case was executed jointly by the third and fourth respondents. The cheques tendered in this case were all signed by the third respondent, alone. In effect therefore, this is a case in which the fourth respondent could j have brought an application at the lower court for his name [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 534 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. to be struck out of the suit as he was wrongly joined, or that a the suit did not disclose a cause of action against him. The learned trial Judge was therefore right in dismissing the claim against the fourth respondent. The appeal against him b will therefore also be dismissed irrespective of the fact that he did not file a brief. The case against second respondent. c The case against the second respondent is also similar to the case against the fifth and sixth respondents in that whatever he did in this case was done after the bank draft had already been stopped by the third respondent on 24th Febru- ary, 1989. The second respondent is alleged to have lodged a d complaint to the police that he suspected that third respondent who was his agent has been duped by the appellant for the sum of N4.2 million which he gave out for the purchase of 250 tonnes of cocoa, which were not delivered in spite of e the fact that the appellant got the money. In my view, the second respondent did the correct thing in those circumstances. It is on record that by the time second respondent invited the police into the case, the third respondent had al- f ready written to his bank (the first respondent) to stop the draft issued to appellant. Stopping a draft is quite different from reporting a suspected fraud to the police. The learned trial Judge was therefore right in dismissing plaintiff’s claim g against the second respondent. The present appeal against the second respondent, will therefore also be dismissed. The case against third respondent. h I now come to the most crucial aspect of this appeal which is the case against the third respondent. The claim of the appellant is one of damages for wrongful stoppage by third respondent of a bank draft for N2,400,000 made payable to him through first respondent’s bank. The third respondent i himself admitted writing to the first respondent to stop the draft. So there is no dispute as to who stopped the draft. The dispute is as to whether third respondent was justified in asking first respondent to stop the draft as he did, and j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 535 a whether the first respondent was also legally justified in stopping the said draft as it did. The reasons given by the third respondent for ordering a stoppage of the draft were as b follows:– All his transactions with the appellant had always been on a cash and carry basis. On 24th February, 1989 when he went to buy and collect 250 tonnes of cocoa from the appel- c lant he was not indebted to the appellant. Rather, the appellant was indebted to him in the sum of N1.6 million which he paid to appellant for 100 tonnes of cocoa, which were not yet delivered because the appellant wanted him to buy the d entire 250 tonnes of cocoa which he had in his store. He therefore went back to his principal, the second respondent to get additional money. Hence, he brought the additional N2.4 million in the Draft on 24th February, 1989, and paid e to the appellant. But instead of ordering the cocoa to be loaded in his trailers for him, the appellant disappeared with the draft saying he was going to his bank to check the “genuity” of the said draft. The appellant could not be seen the whole day, hence he had to quickly instruct his bank to f stop the draft, and they did so. The appellant’s version of the story was however different. It was true that his business relationship with the third re- g spondent started on a “cash and carry” basis. However, on a certain date the third respondent came in company of the fourth respondent to say that the boss of their company who should have signed a draft for them had travelled overseas, and so the appellant should oblige them by selling on credit. h As a former school mate to the fourth respondent, the appellant obliged, and so allowed the third and fourth respondents to load on credit. In due course, the third and fourth respondents actually lived up to their promise in that on the ap- i pointed date, they came and paid what they owed, and then took a new consignment on credit. Thus began a system of loading on credit and paying later. However on 21st Decem- ber, 1988, the third and fourth respondents came and liqui- j dated all their indebtedness up to that date. But on that same [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 536 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. date the third and fourth respondents asked to be allowed to a evacuate cocoa on credit again, and were duly allowed. To cut a long story short, when the indebtedness of the third and fourth respondents rose up to N13,950,000 on 2nd February, b 1989, the appellant became alarmed and warned the third and fourth respondents that they would no longer be allowed to evacuate cocoa on credit unless and until they have liquidated their indebtedness. So between 21st December, 1988 c and 21st February, 1989 the third and fourth respondents made a total payment of N11,475,000, leaving a balance of N2,475,000. But added to this was the sum of N30,000 earlier advanced to the third and fourth respondents in respect d of some other transaction, which thereby brought the total indebtedness of the third and fourth respondents to the appellant to N2,505,000 as at 21st February, 1989. Finally, on 24th February, 1989 the third respondent alone brought the Draft in dispute for the sum of N2,400,000 to appellant in e part payment of the total debt of N2,505,000, leaving a balance of N105,000. But thereafter, the third respondent in his characteristic manner asked to be allowed to evacuate more cocoa on credit. But the appellant refused and further f evacuation will not be allowed until and unless the outstanding balance of N105,000 was cleared. When the appellant refused to allow further evacuation of cocoa on credit, the third respondent threatened that he would stop the draft g which he had paid and actually did so. And that was why the appellant instituted this action at the High Court. The above was the State of the pleadings when the matter h went for trial. At the trial the appellant tendered two letters written by the third respondent to him dated 30th January, 1989 and 1st February, 1989 (exhibits LCL6 and LCL7, respectively) in which third respondent explained that he was making his best efforts to collect “3 outstanding drafts” each i worth N1 million from his bank, and apologised for the delay. In exhibit LCL7, the third respondent again wrote to the appellant explaining that he was bringing him “a draft directly from Ondo first thing tomorrow morning – I mean the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 537 a amount outstanding.” These two letters were obviously tendered to show that contrary to the averments in the pleadings of the third and fourth respondents that they have never b owed the appellant a kobo, and that the draft for N2,400,000 taken to the appellant on 24th February, 1989 was for future purchases and not for payment of any outstanding liabilities was a lie. However, at the end of the trial, the learned trial c Judge appears to have ignored the import of exhibit LCL6 and LCL7 and believed the story of the third and fourth respondents that they were not indebted to the appellant; and that rather the appellant was indebted to them in respect of cocoa that were paid for but not supplied. It is against that d finding that the appellant has appealed to this Court. The gist of the appellant’s appeal to this Court is that the learned trial Judge did not make proper use of having seen and heard the witnesses in the witness box in that he did not make proper e findings of fact on the credibility of witnesses, preponderance of evidence and the balance of probability. Attention was also drawn to page 685 of the records (lines 15–20) where the learned trial Judge said as follows:– f “The version given by the Plaintiff is more convincing than the one given by the 3rd Defendant, particularly when one takes into consideration the personal cheques given by the 3rd Defendant the purpose for which he has not satisfactorily explained, except for g the one in the sum N3,205,000 given on 21st February, 1989.” Yet, the learned trial Judge dismissed the plaintiff’s claim and awarded N600,000 in favour of the third defendant because according to the learned trial Judge he bought the cru- h cial 200 tonnes for a sum of N13,000 on the 2nd of Febru- ary, 1989, when in fact that piece of evidence was at variance with what was pleaded at paragraphs 19 and 20 of the third respondent’s statement of defence. It was therefore i submitted that the third respondent’s evidence in question should have been ignored as it went to no issue. The court was therefore urged to allow this appeal. As already mentioned above, the third respondent did not j file any brief although served with all the hearing notices [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 538 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. and briefs in this case. I have therefore considered all the ar- a guments of the appellant canvassed on this point and find as follows. At first sight it appeared that the question as to which ver- b sion of the story told by either the appellant or third respondent was more convincing, was question of “credibility” which was pre-eminently the province of the trial Judge who had the benefit of seeing and hearing the witnesses, and ob- c serving their demeanours in the witness box as laid down in Ebba v. Ogodo (1984) 1 S.C.N.L.R. 372; (1984) 4 S.C. 84 and other cases. But on a closer look it would be found that this was a matter of drawing inferences from proven facts in d respect of which an Appeal Court is in as good a position as the trial Court. In such a situation an Appeal Court can interfere with the findings of a trial Court and draw the correct inference which the trial court failed to draw. In the instant e case, it was the story of the appellant that the bank draft for N2,400,000 presented to him on 24th February, 1989, was for part-payment for outstanding liabilities, leaving a balance of N505,000. But the third respondent on the other f hand contended that the money was for the purchase of a new consignment of 150 tonnes of cocoa. It is my view that before making up his mind as to which version to accept, the learned trial Judge should have taken all the surrounding cir- g cumstances into consideration, prominent among which was the existence of the two letters exhibits LCL6 and LCL7 which clearly show that as late as 1st February, 1989 the third respondent had some “outstanding” liabilities to clear h with the appellant for which some money were seriously being looked for in a bank. The averment at paragraph 16 of the third respondent’s “amended statement of defence and counter-claim” could not therefore be true. The said paragraph reads as follows:– i “With reference to paragraph 27 of the plaintiff’s statement of claim, the said sum of N2,400,000 was an amount paid by the third defendant to the plaintiff for fresh order for 150 tonnes of cocoa at N16,000 per ton and not as part payment of any debt as the third j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 539 a defendant was not indebted to the plaintiff at all on cocoa.” (Italics by me). One may then ask if the third respondent “was not indebted b to the appellant at all on cocoa” what was the “outstanding” being referred to in exhibits LCL6 and LCL7? It is my view that the existence of exhibits LCL6 and LCL7 clearly showed that the third respondent was telling a lie in para- c graph 16 of his statement of defence, and so he should not have been believed. There was also the averment in paragraph 32 of the same “amended statement of defence and counter-claim” which d reads as follows:– “32. The third defendant states that after paying the plaintiff the further sum of N2,400,000 through its managing director and providing vehicles and labour to evacuate the 250 ton- e nes of cocoa on 24/2/89, the said managing director disappeared with the bank draft under the pretext that he was going to check the “genuity” of the said bank draft from his bankers and failed to show up.” f In connection with this averment one must remember that it was common ground that the third and fourth respondents have been buying cocoa worth several millions of Naira from the appellant as far back as November, 1988 without g any complaint that any of the drafts presented in payment had ever bounced or been dishonoured; why then should the appellant suddenly “disappear with the bank draft under the pretext that he was going to check the “genuity” (or genu- h ineness) of the said bank draft . . .”? It is my view that such a step would have been necessary if the third respondent was buying cocoa from the appellant for the first time, and not after he had been buying for over three months. i In view of the two patent absurdities highlighted above, it is my view that the learned trial Judge should have been on his guard and rejected the story of third respondent. The appeal against the third respondent must therefore succeed as j judgment was clearly against the weight of evidence. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 540 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The case against the first respondent a It was the case of the appellant against the first respondent that the Draft for N2.4 million was wrongly countermanded or dishonoured by the first respondent, as the said draft was b an “unconditional promise” to pay the value to the plaintiff. It was not an ordinary cheque that could be stopped by the drawer at any time before payment. The case of U.B.A. Ltd v. Ibhafidon (1994) 1 N.W.L.R. (Part 318) 90 at 123 decided c by this Court, was heavily relied upon for this submission. In reply to the above, Mr Olateru Olagbegi holding Chief Rotimi Williams’ Brief for the first respondent adopted his written Brief in which the main arguments were as follows:– d (1) The draft for N2.4 million, tendered as exhibit ‘A’ in this action was on the evidence treated as a Bill of Exchange and not as a Promissory Note in that the plaintiff had entered it in his bank teller and lodged it as a cheque in the e Union Bank of Nigeria Ltd Ile-Ife. Section 5(2) of our Bills of Exchange Act, as well as the English case of In re-British Trade Corporation (1932) Ch.D 1 were cited and relied upon as authorities for this proposition. f (2) That valuable consideration should have moved from the plaintiff who is claiming on the instrument to the first defendant who is the drawer of the instrument. Two English cases of Hasan v. Wilson (1977) 1 LLR 431 at 442: and Oliver v. Davis (1949) 2 KB 727 at 735–736 were cited in g support. On the basis of the foregoing it was submitted that the first respondent bank was right in dishonouring the draft for N2,400,000 on the instruction of third respondent. The court h was therefore urged to affirm the decision of the court below and dismiss this appeal. I have carefully considered all the arguments canvassed above, and also studied our Bills of Exchange Act, particu- i larly section 5(2) thereof, and cannot find any thing in it that says that:– “Where in a bill the drawer and the drawee are the same person, the drawer can countermand the bill at any time before payment.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 541 a All that, that section says is that:– “The holder may treat the instrument at his option either as a Bill of Exchange or a Promissory Note.” b In the instant case, it appears to me to be an irrelevant consideration how the holder treats his Bill or Draft whether he collects it by cash across the counter or he pays it into his current account in the bank. What matters is how the Drawer c should treat the draft, vis-à-vis the holder or beneficiary. Can he dishonour it at will or is he bound to pay cash on presentation. This same question came up before us in the case of U.B.A. Ltd v. Ibhafidon (supra) in this Court (Coram, Akpa- d bio, Ejiwunmi and Ogebe, JJCA). In answering the question we first referred to Paget’s Law of Banking (8ed) page 445 in which a banker’s draft was defined under the Bills of Ex- change Act (1882), Amendment Act, 1932 as follows:– e “. . . For the purposes of this section, the expression ‘Banker’s draft’ means a draft payable on demand by or on behalf of a bank upon itself, whether payable at the head office or some other office of the bank.” (Italics by me). f We further stated the difference or distinction between a Bank Draft and an ordinary cheque to be as follows:– “It is common knowledge that while a Banker may refuse to honour an ordinary cheque on the ground that the drawer has no money in his account to cover the amount in the cheque, a Bank g Draft on the other hand is payable at sight regardless of whether the person on whose behalf the draft was issued had money in his account or not.” Finally, the Banking Trade Practice on which the above dis- h tinction was founded was stated by one Mr Lawrence Ugbo (PW1) an expert in Banking and Finance to be as follows:– “The U.B.A. Ltd, as the drawer of exhibit ‘1A’ has the primary responsibility to ensure that the draft is paid. Before a bank issues i the bank draft as the drawer the bank must have satisfied itself that the transaction or transactions leading to the issuance are in order. Secondly, once the bank issues the draft it now constitutes a separate contract between the bank and the payee. The bank cannot rely on a mistake of the bank and another third party to repudiate j payment of the draft. The bank is bound to pay the draft exhibit [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA 542 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

‘1A’ notwithstanding forgery found in the draft issued by the cus- a tomer Ehinola.” In view of the foregoing, the trial Court, coram Obi, J held that the U.B.A. Ltd, which issued a bank draft in the sum of b US$33,643 at its Lagos Head office made payable to the respondent (Julius A. Ibhafidon) at its Benin City Branch on the instruction of one Ehinola, could not lawfully turn round to countermand the draft on the excuse that the initial c cheque or draft with which Ehinola had opened his domiciliary account was a forgery. The appellant bank was found liable to pay not only the amount in the draft but also plus post-judgment interest at 10% p.a. payable from date of d judgment until final liquidation. On appeal to us, the appeal was unanimously dismissed. In view of the fact that we have not been informed that, that decision has been overturned by the Supreme Court, we see no reason why our position in the instant case should be altered from that stated above. e In effect therefore, the claim of the appellant against the first respondent must succeed, as the draft for N2,400,000 was unlawfully countermanded by it. The first defendant f will have to pay not only the amount of N2,400,000 shown on the draft, but also interest at the rate of 10% per annum from date of dishonour till final liquidation. However, I must quickly point out that this will not be in addition to the same amount which third respondents will be adjudged to pay for g cost of cocoa supplied to him, as such will tantamount to double compensation. See Ezeani v. Ejidike (1964) 1 All N.L.R. 402; P.A. Oguigo and Sons Ltd v. C.O.P. (1991) 3 N.W.L.R. (Part 177) 46. There was only one cause of action h in this case. There was also the sum of N5,000 advanced to the third respondent which he admitted. That amount will therefore be paid by the third respondent alone, and not jointly or severally with the first respondent. i On the totality of the foregoing this appeal succeeds as against the first and third respondents and is hereby allowed, but fails as regard the second, fourth, fifth and sixth respondents and is hereby dismissed. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akpabio JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 543 a Judgment is therefore hereby entered against the first and third respondents jointly and severally in the sum of N2,400,000, being the amount in bank draft No. A922052 b dated 24th February, 1989, issued by the first respondent in favour of the appellant at the instance of the third respondent, but which was unlawfully stopped and countermanded by first respondent on the instruction of the third respondent. c Interest on the said sum of N2,400,000 at the rate of 10% per annum will be paid by the first and third respondents jointly and severally from date of dishonour, i.e., 27th Feb- ruary, 1989 until final liquidation. In addition, judgment is also hereby entered by consent against the third respondent d alone in favour of the appellant in the sum of N5,000, being cash advance made to the third respondent by appellant on 9th December, 1988. The claim for a similar advance made for N25,000 on 23rd January, 1989, which was denied by e third respondent is hereby non-suited as there was no proper proof. Cost of this appeal is hereby assessed at N5,000 against the f first and third respondents jointly and severally, while the claim against the second, fourth, fifth and sixth respondents is hereby dismissed with cost of N1,000 in favour of each of the second, and sixth respondents who filed Briefs in this g appeal and retained Counsel, while no costs are awarded to the fourth and fifth respondents who filed no brief in this case.

AKINTAN JCA: I had the privilege of reading the draft of h the leading judgment prepared by my learned brother, Ak- pabio, JCA. He has carefully and painstakingly set out the facts, of the case and discussed all the issues raised in the appeal. I entirely agree with his reasoning and conclusion i which I hereby adopt as mine. It is settled law that an Appellate Court will not ordinarily disturb the findings of fact made by a trial court who had the singular opportunity of listening to the witnesses and watch- j ing their demeanour. An Appellate Court will, however, not [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Akintan JCA 544 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. hesitate to interfere with findings of fact made by a trial a court where an Appellate Court is satisfied that such findings are clearly wrong or perverse or where the trial court failed to make a proper use of the opportunity of seeing and b hearing the witnesses at the trial or where it has drawn wrong conclusions from established facts before the court or where the findings were arrived at as a result of a wrong approach to the evidence or a violation of some principles of c law or procedure. See Nwuke and others v. Okere and others (1994) 5 N.W.L.R. (Part 343) 159; Ogbunkwelu and others v. Umeanafunkwa and others (1994) 4 N.W.L.R. (Part 341) 676; Akinloye v. Eyiyola (1968) N.M.L.R. 92 and Woluchem d v. Gudi (1981) 5 S.C. 29s1. In the instant case, the learned trial Judge failed to make use of two letters, (admitted as exhibits LCL6 and LCL7) written by the third respondent to the appellant in which he (third respondent) admitted owing the appellant. The court’s failure to consider the contents of e the 2 letters in the course of its judgment has created a serious omission which gives this Court an opportunity to tam- per with the findings of fact made by the court. f Also on the submission on behalf of the first respondent that the bank could not be liable for failure to honour the bank draft issued in favour of the appellant, I believe that the law on the point was adequately considered in the recent de- g cision of this Court in U.B.A. Ltd v. Ibhafidon (1994) 1 N.W.L.R. (Part 318) 90 which I consider binding on this Court. As I already stated earlier above, I entirely agree with the h conclusion and orders made in the leading judgment including those on costs which I hereby adopt.

IGE JCA: I have had the privilege of reading in draft the judgment just delivered by my learned brother Akpabio, i JCA. I am in agreement with his reasonings and conclusions. I only desire to add one or two words of my own. If the learned trial Judge had made a correct and dispassionate appraisal of the sum total of the evidence and the documents j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ige JCA Lagricom Company Ltd v. Union Bank of Nigeria Ltd and Others 545 a before him, he should not have dismissed the plaintiff/appellant’s claims in its entirety. Looking at the plaintiff’s multifarious claims and the evidence adduced by the b parties, it was obvious that the plaintiff/appellant had no case against the second, fourth, fifth and sixth defendants/respondents. The Learned trial Judge was right in dismissing the plaintiff/appellant’s claims against them. From c the sum total of the evidence before the lower court, the bat- tle was really between the plaintiff/appellant and the first and third defendants/respondents. The first respondent refused to pay the plaintiff the draft of N2.4m – Exhibit D3 given to him by the third respondent for the cocoa he pur- d chased from the former. The third defendant/respondent was a regular customer of the plaintiff/appellant in the cocoa trade. The appellant is contending that the first defendant/respondent was wrong to have refused him the payment e of the amount on exhibit D3 i.e. N2.4m. The first defendant/respondent on the other hand tried to play safe that the third defendant rightly countermanded the draft hence they were not obliged to pay it to the plaintiff/appellant. More- f over their reason for non-payment reads thus “draft is irregularly drawn – Endorsement not clear 27th February 1989”. This is where they went wrong – A bank draft is different from a cheque. A bank draft is a Bill of Exchange for which g value has been given and the holder is deemed to be a holder for value as regards the acceptor and all parties to the Bill who became parties prior to such time. Section 27(2) of the Bill of Exchange Act, 1950. h If the draft is regarded as a Promissory Note it will be regarded as an unconditional promise in writing to pay on demand or at a future time the sum of money stated therein – see section 83(1) of the same Bill of Exchange Act. Payment i should be made unconditionally. Whether the plaintiff/appellant made a request to be paid exhibit D3 by the first defendant on the counter or by entry of the draft in his Teller, it does not alter the form and value of the Draft as a j Bill of Exchange. A Draft which in my view is as good as [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, BENIN DIVISION) Ige JCA 546 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. cash is an absolute order to appropriate – a certain sum a (N2.4m as in the instant case) to the payee i.e., the plaintiff/appellant in this case. On the other hand, a banker may refuse to honour an ordi- b nary cheque on the ground of insufficient funds or detection of fraud. For insufficient funds on part of the Drawer, the bank usually marked the cheque “R/D”, meaning Refer to Drawer. If fraud is detected the matter is referred to police c for investigation. The Drawer of a cheque may for his own special reasons countermand his cheque and stop payment. He cannot do this to a bank draft which is payable at sight. The draft once issued by a bank, is no longer under the con- d trol of the third defendant. The new situation is now between the first defendant/respondent and the plaintiff/appellant and first defendant/respondent is duty bound to pay the plaintiff/appellant the amount on the bank draft exhibit D3. I hold e that exhibit D3 was unlawfully countermanded and both first and third respondents are jointly and severally liable on it. I am in total agreement with the findings of my learned brother in this appeal as it affects the case of the plaintiff f against the third respondent hence I too uphold the appeal against the first and third respondents and dismiss the appeal against the second, fourth, fifth and sixth respondents. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

First Bank of Nigeria Ltd v. African Petroleum Ltd 547 a First Bank of Nigeria Limited v. African Petroleum Limited b COURT OF APPEAL, LAGOS DIVISION AYOOLA, MUHAMMAD, UWAIFO JJCA Date of Judgment: 24 JANUARY 1996 Suit No.: CA/L/227/93 c Banking – Banker and customer relationship – Nature of – Money credited to customer’s current cccount – Obligation of bank not to pay out money from customer’s account – Limitations – When customer’s instruction unnecessary d Banking – Cheque – Amount on uncleared cheque credited to customer’s account – Duty of customer to reimburse bank if cheque dishonoured – Right of collecting bank to debit account of customer e Banking – Collecting bank – Duty of

Facts The respondent was a customer of the appellant. It lodged f two bank cheques (Drafts) issued by the United Bank for Africa (“UBA”) Broad Street, Branch each in the sum of N250,000 into its account at the Murtala Mohammed Inter- national Airport Branch of the appellant. g Later the respondent was informed by the appellant’s branch that the said cheques had been countermanded and had been returned unpaid. Upon receiving a statement of account from the appellant, the respondent found that the ap- h pellant had reversed entries crediting it with N500,000 being the total value of the two cheques and had debited its accounts with that sum. The respondent demanded a refund of the sum but the appellant refused to do so. The respondent i thereon commenced the action with which this appeal was concerned claiming from the appellant, then defendant, the said sum as damages for breach of contract or in the alternative as money had and received by the appellant to the re- j spondent’s use. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

548 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The respondent’s case at the High Court was that the two a bankers drafts, sometimes in the proceedings referred to as cheques, which it lodged into its account were given to it by a third party in payment for the sale of aviation fuel to that b third party. On receiving verbal confirmation from a member of staff of the appellant that the drafts or cheque had been cleared the respondent supplied aviation fuel to the purchaser. c The appellant first credited and later debited the respondent’s account with the amount of the said drafts. The appellant admitted that the amount of the drafts were d credited to the respondent’s account but it was averred by its amended statement of defence that the amount was credited as “book value” and not real value whilst the drafts were forwarded to the Banking Clearing System for clearance. It was further averred that on 20th January, 1984, the United e Bank for Africa returned the two drafts unpaid and undertook to indemnify the appellant against all proceedings and damages the appellant may sustain or be put to by reason of the non-payment. f The appellant also stated that it refused to pay based on a directive received on 21st December, 1984 from the Special Investigation Panel ordering the appellant to freeze the re- g spondent’s account in question and another letter dated 24th December, 1984 ordering it to temporarily defreeze the said account in order to pay back to United Bank for Africa the amount of the two drafts amounting to N500,000. h The learned trial Judge entered judgment for the respondent and ordered that it should pay to the respondent as damages for breach of contract “the sum of N500,000 being the drafts deposited in its Murtala Mohammed Airport i Branch in conformity with the Banking Practice”, and apparently in the alternative, as money had and received by the appellant to the respondent’s use. The appellant appealed to the Court of Appeal. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

First Bank of Nigeria Ltd v. African Petroleum Ltd 549 a Held – 1. The contractual relationship between a banker and its customers gives rise to several rights and obligations one b of which is the obligation on the part of the banker not to pay out moneys in the account of the customer except to the customer’s order or by his instructions. 2. The banker does not hold moneys or proceeds of bills c received into the customer’s account as trustee for the customer but borrows the money with an implied term to repay the money or any part thereof at the branch where the account is kept against the written order of the cus- d tomer. 3. Generally the banker can only part with the customer’s money in his hands on the order of the customer. In terms of loan relationship the banker can only validly e repay the loan or such part thereof as demanded by the customer on the customer’s order. This general statement is subject to apparent exceptions as when the banker deducts charges and commissions from time to f time. The authorisation to do so is implied either in usage or as a term of the contract implied in normal practice. 4. Where the amount of an uncleared cheque has been g placed to the credit of the customer’s account, the customer is liable to reimburse the bank should the cheque be dishonoured. 5. Money credited to the current account of a customer h which is not overdrawn represent moneys available for use of the bank as loan to it from the customer to be repaid to the order of the customer when he so demands. When a cheque the amount of which has been credited to i the customer’s account is dishonoured, it means that the bank had in fact not received any money into the customer’s account which can be loaned to it. To retain such money to the credit of the customer will result in j the bank refunding a loan it had in fact not received or in [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

550 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

terms of agency, asking the agent to pay money on be- a half of the principal (the customer) which it had not received. 6. Barring arrangements whereby the bank has granted a b loan to the customer on terms as to repayment, the bank when it had placed to the credit of the customer moneys to which the customer is liable to reimburse the bank, is entitled to debit the account of the customer without in- c structions from the customer. Furthermore, where a bank has paid the customer’s money in discharge of the customer’s debits, the banker is entitled to take credit for it. 7. If a cheque is dishonoured on presentation, the collecting d bank can debit the customer’s account with the amount. Therefore, where the draft had actually been dishonoured as in the instant case, the collecting bank cannot proceed to deem it honoured as between it and the cus- e tomer notwithstanding that as between it and the paying bank there may be an obligation to indemnify the collecting bank if it had altered its position to its detriment by reason of the delay of the paying bank in returning f the cheque or draft unpaid. That the drafts were not returned within four days by one paying bank does not alter the legal position. 8. In collecting cheques for a customer a banker acts basi- g cally as a mere agent or conduit pipe to receive payment of the cheques from the banker on whom they are drawn and to hold the proceeds at the disposal of his customer. Appeal allowed. h

Cases referred to in the judgment Foreign Cases i B. Liggett (Liverpool) Ltd v. Barclays Bank Ltd (1928) 1 K.B. 48 Capital and Counties Bank v. Gordon (1903) A.C. 240 Foley v. Hill (1848) 2 H.L. Case 28 j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION)

First Bank of Nigeria Ltd v. African Petroleum Ltd 551 a Joachimson v. Swiss Bank Corporation (1921) 3 K.B. 110 Westminster Bank Ltd v. Hilton (1926) 43 T.L.R. 124 b Books referred to in the judgment Halsbury’s Laws of England (4ed) Volume 1, paragraph 783 Halsbury’s Laws of England (4ed) Volume 2, paragraph 100 c Counsel For the appellant: Prof. I.E. Sagay (with him C.A. Kolawole (Mrs) and Bamidele Aturu) For the respondent: U.E. Udom (with him C. Monarkwe) d Judgment AYOOLA JCA: (Delivering the lead judgment) On 13th De- cember, 1984 the respondent who was a plaintiff in the court e below and a customer of the appellant lodged two bank cheques (“Drafts”) issued by the United Bank for Africa (“UBA”) Broad Street, Branch each in the sum of N250,000 into its accounts at the Murtala Mohammed International f Airport Branch of the appellant, the First Bank of Nigeria Limited. Later the respondent was informed by the appellant’s branch that the said cheques had been countermanded and had been returned unpaid. Upon receiving a statement of g account from the appellant, the respondent found that the appellant had reversed entries crediting it with N500,000 being the total value of the two cheques and had debited its accounts with that sum. The respondent demanded a refund of that sum but the appellant refused to do so. The respondent h thereon commenced the action with which this appeal is concerned claiming from the appellant, then defendant, the said sum as damages for breach of contract or in the alternative as money had and received by the appellant to the re- i spondents’ use. The respondent’s case at the High Court was that the two bankers’ draft sometimes in the proceedings referred to as cheques, which it lodged into its account were given to it by j a third party in payment for the sale of aviation fuel to that [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 552 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. third party. On receiving verbal confirmation from a mem- a ber of staff of the appellant that the drafts or cheques had been cleared the respondent supplied aviation fuel to the purchaser. b The appellant first credited and latter debited the respondent’s account with the amount of the said drafts. The appellant admitted that the amount of the drafts were credited to the respondent’s account but it was averred by its c amended statement of defence that the amount was credited as “book value” and not real value while the cheque was forwarded to the Banking Clearing System for clearance. It was further averred that on 20th December, 1984, the UBA d returned the two drafts unpaid and undertook to indemnify the appellant against all proceedings and damages the appellant may sustain or be put to by reason of the non-payment. In an amended statement of defence which must have pre- e sented the trial Judge with some difficulties, the appellant sought to justify the debiting of the respondent’s accounts on two unrelated grounds. First, the appellant pleaded a directive which it said it received on 21st December, 1984 from f an agency called the Special Investigation Panel of the Su- preme Military Headquarters ordering the appellant to freeze the respondent’s account in question and another letter of 24th December, 1984 ordering it to “temporarily defreeze” g the said account in order to pay back to UBA the amount of the two drafts amounting to N500,000. The appellant averred that it was under compulsion of that directive that it debited the respondent’s account. The other unrelated ground is as pleaded in paragraph 11 that:– h “. . . in accordance with establishing Banking practise, when the cheques were returned to U.B.A. unpaid, the defendants (appellants) automatically and mandatorily debited the plaintiff’s (respondent’s) account with the value of the unpaid cheques, thus re- i flecting the correct credit status of the plaintiff (respondent).” The appellant’s branch manager, Mr Olaitan (second DW) said that the U.B.A. asked the appellant not to pay the cheques. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA First Bank of Nigeria Ltd v. African Petroleum Ltd 553 a In entering judgment for the respondent, the trial Judge was of the view that “debiting the account of the plaintiff without its instructions amounted to a breach of implied b terms of contract of a bank and its customer”, and that the respondent was entitled to the value of the drafts after four working days, apparently allowed for clearance of the drafts. These appear to be the two main strands of reasoning which c led to the conclusion by the learned Judge that the appellant should pay to the respondent as damages for breach of contract “the sum of N500,000 being the drafts deposited in its Murtala Mohammed Airport Branch in conformity with the Banking Practice”, and apparently in the alternative, as d money had and received by the appellant to the respondent’s use. Holding on to several peripheral statements made by the e learned trial Judge, Counsel on behalf of the appellant, and to some extent Counsel on behalf of the respondent, formulated in their respective Briefs of Arguments several issues which are either more appropriate at the trial stage or are purely academic. Issues for determination formulated in a f brief of argument must be real issues and not mere academic questions. To my mind, the determination of this appeal hinges on two issues, namely, whether having regard to the circumstances of the case, the learned Judge was right in g holding that “Debiting the account of the plaintiff without its instruction, amounts to a breach of implied terms of contract”, and, secondly, whether the Judge was right in giving judgment for the respondent in the alternative for money had h and received by the appellant to the use of the respondent. These two issues which should have been made the focus of the appeal arise from the plethora of grounds of appeal filed. The contractual relationship between a banker and its cus- i tomers give rise to several rights and obligations one of which is the obligation on the part of the banker not to pay out moneys in the account of the customer except to the customer’s order or by its instructions. The banker does j not hold moneys or proceeds of bills received into the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 554 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. customer’s account as trustee for the customer but borrow a the money with an implied term to repay the money or any part thereof at the branch where the account is kept against the written order of the customer. These aspects of the rela- b tionship of banker and customer and a few others with which this case is not directly concerned are discussed in several cases of which the most often cited are Foley v. Hill (1848) 2 H.L. Case 28; Westminster Bank Ltd v. Hilton c (1926) 43 T.L.R. 124, 126 and Joachimson v. Swiss Bank Corporation (1921) 3 KB 110 at 127. In the last of these cases, Atkin, LJ said:– “The terms of that contract involve obligations on both sides and d require careful statement. They appear upon consideration to include the following provisions. The bank undertakes to receive money and to collect bills for its customer’s account. The proceeds so received are not to be held in trust for the customer, but the bank borrows the proceeds and undertakes to repay them. The e promise to repay is to repay at the branch of the bank where the account is kept, and during banking hours. It includes a promise to repay any part of the amount due against the written order of the customer addressed to the bank at the branch . . .” f If the relationship is to be described as that of principal and agent as was done by Lord Atkinson in Westminster Bank Ltd v. Hilton (supra) the banker is put in the position of an agent holding the customer’s money to be paid out on the g order or instruction of the principal – the customer. Attempt to describe the obligations inherent in the banker and customer relationship in terms of existing and well known contractual relationship as that of creditor and debtor, and prin- h cipal and agent may be sometimes confusing. The truth of the matter, in my view, is that the relationship is of a class on its own subject to obligations which cannot be defined exhaustively in a single case but must be defined as occasion arises. In whatever manner the obligation is defined, the law i seems certain that generally the banker can only part with the customer’s moneys in his hands on the order of the customer. In terms of loan relationship the banker can only validly repay the loan or such part therefore as demanded by j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA First Bank of Nigeria Ltd v. African Petroleum Ltd 555 a the customer on the customer’s order. This general statement is subject to apparent exceptions as when the banker deducts charges and commissions from time to time. The authorisa- b tion to do so is implied either in usage or as a term of the contract implied in normal practice. However, the question in this case is whether where the banker has placed the amount of a cheque to the credit of the c customer and the cheque is afterwards dishonoured, it needs an express authorisation before it debits the accounts of the customer with the amount of returned cheque. There cannot be any doubt that where the amount of an uncleared cheque d has been placed to the credit of the customer’s account, the customer is liable to reimburse the bank should the cheque be dishonoured. This proposition which accords with justice and common sense received expression in the speech of e Lord Lindley in Capital and Counter-Bank v. Gordon (1903) A.C. 240 at 248. He said, discussing the position as stated above:– “It is no doubt true that if the cheque had been dishonoured, James f (the customer) would have become liable to reimburse the bank the amount advanced by him when it placed the amount to his credit. This he would have to do where any cheque, crossed or not, was placed to his credit and was afterwards dishonoured. To this extent and in this sense, it may be said that the bank received g payment for Jones, because payment of the cheque discharged him from the liability he would have been under to repay the bank the sum placed to his credit if the cheque had not been paid”. Moneys credited to the current account of a customer which h is not overdrawn represents moneys available for use of the bank as a loan to it from the customer to be repaid to the order of the customer when he so demands. When a cheque the amount of which has been credited to the customer’s ac- i count is dishonoured, it means that the bank had in fact not received any money into the customer’s account which can be loaned to it. To retain such money to the credit of the customer will result in the bank refunding a loan it had in fact j not received or in terms of agency, asking the agent to pay [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 556 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. money on behalf of the principal (the customer) which it had a not received. Whichever way one looks at it the statement made by the learned trial Judge, that debiting the account of the plaintiff b without its instructions amounts to a breach of implied terms of a contract is too sweeping in the circumstances of this case. The implied term referred to by the Judge must be pre- dicted on moneys of the customer being in the hands of the c bank. Barring arrangements whereby the bank has granted a loan to the customer on terms as to repayment, the bank when it had placed to the credit of the customer moneys to which the customer is liable to reimburse the bank, is enti- d tled to debit the account of the customer without instruction from the customer. Furthermore, where a bank has paid the customer’s money in discharge of customer’s debts, the banker is entitled to take credit for it. See B. Lggett (Liver- e pool) Ltd v. Barclays Bank Ltd (1928) 1 K.B. 48. It does not matter if, as in this case, the customer’s debt discharged is that owed to the bank by reason of the customer’s liability to refund to the bank the amount of the uncleared cheque f placed to its account prior to the dishonour of the cheque. On this appeal it has not been seriously contended by Counsel on behalf of the respondent that the law is other than I have stated above. The argument advanced by Coun- g sel for the respondent is that the UBA cannot lawfully countermand payment of its own banker’s drafts after the same had been presented for payment and value received there from and that the appellant should not have acceded to the h countermand order received fourteen days after the bank drafts have been presented for payment. In my view, these arguments would have been more apt had the action been one between the respondent and UBA. The appellant in not the paying bank and the question whether it should or should i not have acceded to a countermand should not arise. What concerned the appellant was whether or not the cheque was in fact dishonoured and not whether the dishonour was wrongful or not. The respondent as payee could enforce its j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA First Bank of Nigeria Ltd v. African Petroleum Ltd 557 a rights against the drawer, the UBA, in case of a wrongful dishonour but the appellant cannot be treated as a guarantor against wrongful dishonour. b Another branch of the respondent’s argument that the drafts should be deemed to have been dishonoured is based on an alleged obligation on the paying bank to return the unpaid cheques within three working days. Reliance was c placed for his argument on a passage from Femi Adekanye’s Practice of Banking Volume 1, page 31 where the author stated as follows:– “Cheques received through clearing must be returned within three d working days as such cheques are deemed to have been paid and can no longer be returned after four working days . . .” As quoted in the respondent’s brief the author had earlier stated that the above comments were to “serve as a guide to e a banker considering the time limits for stopping payment of cheques”. The guidance in the passage quoted above is for paying bank which has the liberty not to recognise the countermand of a cheque after due payment has been made and f for the collecting bank. Where the draft had actually been dishonoured the collecting bank cannot proceed to deem it honoured as between it and the customer notwithstanding that as between it and the paying bank there may be an obli- g gation to indemnify the collecting bank if it had altered its position to its detriment by reason of the delay of the paying bank in returning the cheque or draft unpaid. In my judgment the submission that the appellant should have deemed h the drafts paid is misconceived. That the drafts were not returned within four working days by the paying bank does not alter the legal position as already stated and as put in Halsbury’s Laws of England (4ed) Volume 3 page 80 para- i graph 105 that:– “If a cheque is dishonoured on presentation, the collecting bank can debit the customer’s account with the amount.” It would have sufficed to dispose of this appeal on the j ground that it was within the rights of the appellant in the [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 558 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. circumstances of the case to have debited the respondent’s a account on the dishonour of the drafts paid into the latter’s account. The appellant made faint effort to justify the debit in the alternative, by reason of a directive from the Govern- b ment agency described as Special Investigation Panel (SIP). In my view, reliance on SIP’s directive does not avail the appellant. The directive by the SIP to the appellant contained in the SIP’s letter dated 21st December, 1984 (exhibit c E) is to “freeze the above mentioned account pending the outcome of our investigations or further directives from the panel”. The account mentioned was the respondent’s account in question in this case. By letter of the same date (ex- d hibit F) the appellant was directed by SIP to “temporarily defreeze the said account to enable you release to UBA the banker’s payment and instrument in the transaction involving drafts no. LCM 116284 and LCH 116285”. I do not interpret any of these directives as amounting to a directive e that the respondent’s account be debited with the amounts of the drafts if the appellant had had no prior cause to debit the account. I do not think it is necessary to deliberate in this case on the scope and purpose of the Decree setting up the f SIP (Decree No. 2 of 1984). I am of the view that the reliance on SIP’s directives does not avail the appellant.

In my view the only other issue which needs be considered g is whether the appellant was liable in the alternative for money had and received for the use of the respondent. With- out stating reasons and unrelated, it would appear, to any finding of fact, the Judge awarded N500,000 in the alterna- h tive for money had and received by the defendant to the use of the plaintiff. The law is settled that in “collecting cheques for a customer a banker acts basically as a mere agent or conduit pipe to receive payment of the cheques from the banker on whom they are drawn and to hold the proceeds at i the disposal of his customer”. (See Halsbury’s Laws of Eng- land (4ed) Volume 2 at paragraph 100). The action for money had and received is predicated in this case on the assumption that the appellant having received proceeds of the j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA First Bank of Nigeria Ltd v. African Petroleum Ltd 559 a cheques as collecting banker for the respondent has de- faulted on his duty to refund the amount collected to the respondent. The principle is well stated in Halsbury’s Laws of b England (4ed) Volume 1 at paragraph 783 that:– “When an agent is employed to carry out any transaction which involve payment to him on his principal’s behalf . . . All monies received on the principal’s behalf must be paid over or c accounted for to the principal upon request, unless the agent has for some lawful reason repaid them to the person from whom he received them . . . Failure to pay renders the agent liable to an action for money had and received.” d Where, as in the present case, it has not been shown that the appellant received payment of the cheques from the bank on whom they were drawn, the UBA, there cannot be said to be a failure to pay anything over to the respondent as would e give occasion for an action for money had and received. The rational basis of an action for money had and received is unjust enrichment. Where there has been no enrichment, no question of enrichment arises at all. f It is sufficient to dispose of this appeal for the reasons stated above which clearly show that the trial Judge was in error in entering judgment for the respondent. It is clear from the oral evidence and the letter exhibit H that the g cheques in question were returned unpaid for non-payment on 20th December, 1984. In the circumstances the appellant was entitled to debit the respondent’s account with the amount placed to its credit before the drafts were returned h unpaid. The questions raised in the appellant’s brief of argument whether a court can speculate on evidence or whether by certain remarks made by the Judge in the course of his judgment the Judge prejudiced himself against the ap- i pellant are inconsequential. In the result, for the reasons I have stated, I would allow this appeal. I would set aside the judgment of the High Court of Lagos State delivered on the 4th October, 1990. In substi- j tution therefore, I would dismiss the plaintiff’s/respondent’s [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, LAGOS DIVISION) Ayoola JCA 560 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. claim and enter judgment for the defendant/appellant with a costs in the court below and costs occasioned by this appeal which I assess at N250 and N2,000 respectively. UWAIFO JCA: I read in advance the judgment of my b learned brother, Ayoola, JCA just delivered. He has, in my view, ably resolved the relevant issues which he rightly identified. The learned trial Judge arrived at his decision, first upon a wrong premise that the appellant acted in breach c of implied terms of a contract with the respondent. It has been clearly shown that there was no such breach. Second, that the appellant received money from on behalf of the respondent which it was bound to pay over to the respondent. d Again, the evidence is that no such money was received by the appellant. I therefore fully agree with the judgment of Ayoola, JCA and for reasons he has lucidly given. I too allow the appeal, dismiss the claim and enter judgment for the e appellant. I abide by the costs assessed. MUHAMMAD JCA: I have read in advance the judgment of my learned brother, Ayoola, JCA, just delivered. He has thoroughly dealt with all issues raised in this appeal. I agree f with his reasoning and conclusion. I too would allow the appeal. I abide by all the orders made in judgment including the orders as to costs. Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 561 a Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another b FAILED BANKS TRIBUNAL, BENIN ZONE MOMOH J

Date of Judgment: 7 FEBRUARY 1996 Suit No.: FBT/BZ/3C/96 c Banking – Foreign correspondent account – Necessity for control account – Failure to keep control account – Effect d Banking – Foreign exchange transaction – Need for proper documentation – MD/chief executive of bank also MD/chief executive of other companies – Duties and interests likely to create conflicts – Failure to declare the fact of holding of e dual positions and the likelihood of conflict of interest to banks board – Sections 11(4) and 11(7) Banking Act, 1969 – Offences Banking – Offences – Chairman/chief executive of bank f permitting to be outstanding unsecured advances amounting to over N50,000 to his respective companies – Breach of section 20(2)(a)(ii) Banks and Other Financial Institution Decree No. 25 of 1991 – Section 45(1) Banks and Other g Financial Institution Decree No. 25 of 1991 Banking – Offences – Failure by bank to keep proper books of account in respect of all its transactions – Breach of sec- h tion 16(1) Banking Act, 1969 and punishable under section 16(4)(a) Banking Act, 1969 – Liability of Bank therefore Banking – Offences – Grant of credit facilities by bank to a customer company – MD/chief executive of Bank also i MD/Shareholder in customer company – Section 20(2)(a)(ii) Banks and Other Financial Institution Decree No. 25 of 1991 – Section 46(a) Banks and Other Financial Institution Decree No. 25 of 1991 considered – Breach of requirement j of section 19(3)(a) Banks and Other Financial Institution [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

562 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Decree No. 25 of 1991 as punishable under section 46(a) a Banks and Other Financial Institution Decree No. 25 of 1991 – Presumption of guilt on Managing Director by virtue of section 45(1) Banks and Other Financial Institution De- b cree No. 25 of 1991 – Breach of section 10(2) Banking – Placement – Whether a credit facility – Applica- ble rules thereto c Banking – Stealing – Section 390(7) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 Criminal law and procedure – Forgery – Making of false entry in Banks books of account with intent to defraud – d Breach of section 435(2)(b) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – MD/chief executive forging returns on loans and advances to Central Bank of Nigeria – Section 467 Criminal Code Act Cap 77 Laws of e the Federation of Nigeria, 1990 Criminal law and procedure – Section 390(7) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – Effect f Words and phrases – “Placement” – Meaning of

Facts g The first accused was the managing director of the second accused from December, 1988 when it was granted licence to carry on banking business until 21st January, 1994 when the banking licence of the second accused was revoked and h Nigeria Deposit Insurance Corporation appointed liquidators. The accused persons were tried on a 27 count charge, the first accused was charged with 20 counts whilst the second accused was charged with seven counts. The allegations against the first accused included amongst others, the grant i of unsecured advances of amounts exceeding the statutory limit specified by section 20(2)(a)(ii) Banks and Other Fi- nancial Institutions Decree No. 25, 1991 to three companies Kapital Securities Limited, Butler Nigeria Limited, Kapital j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 563 a Investments Limited, in which the first accused had substantial interest, management of the three aforementioned companies whilst also managing the second accused which had b no holding/subsidiary relationship with the companies in breach of section 19(3)(a) of Banks and Other Financial In- stitution Decree No. 25, 1991, failure to maintain proper books of account as required by the Banking Act, 1969, par- c ticularly the absence of Control Accounts for Foreign Corre- spondent Accounts of the second accused, grant of unauthorised credit facilities to the first accused’s three companies; holding of different positions in the companies along side withholding office in second accused knowing that conflict d of interests might arise with his status as chief executive of second accused – contrary to section 11(4) of the Banking Act, 1969, negotiation and conclusion of foreign exchange transaction amounting to $4,766,324.62 without documenta- e tion, conversion of £392,008 belonging to the second accused to Azie Limited, a trust company of the first accused and his family, making false entries in the director’s minutes book, forgery of loans and advances returns submitted to the f CBN; stealing by placing second accused’s money to the credit of Kapital Securities Limited and making of false entries in the second accused’s book of account. The second accused was charged with permitting unse- g cured advances in excess of N50,000 to be outstanding in favour of companies of the first accused; management by first accused whilst also managing companies not being subsidiaries of the second accused and failure to keep Control h Accounts for Foreign Correspondent Accounts. The first accused’s three companies were substantial customers of the bank. The first accused bought a property located at No. 2 Cooper Road, Ikoyi for the sum of i N60,763,190, including fees and charges, in the name of Kapital Securities but using the funds of the bank. In order to mask the unauthorised lending from regulatory scrutiny, the amount was broken down and three companies of the j first accused were debited with respective sum as if they [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

564 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. were actually granted loans. This was because in view of the a bank’s total reserve at that material time being N29 million, the second accused could not lend more than 5% of that sum to any one person. The purchased property was thus classi- b fied as an investment (lease to KSL) in the bank’s book. The Central Bank of Nigeria upon examining the second accused, however reclassified the amount as a loan in 1991. The main defence of the first accused to these charges of c granting loans without necessary approval and security was that the loans were not credit facilities but a placement which did not require either approval or security. Sections 16(a), (b) and 20(2)(a)(ii) of the Banks and Other d Financial Institutions Decree No. 25 of 1991 read as follows:– Section 16(a), (b) e “Any person, being a director or manager of a bank, who fails to:– (a) take all reasonable steps to secure compliance by the bank with requirements of this decree. (b) . . . f is guilty of an offence liable on conviction to a fine of N5,000 or to imprisonment for 5 years or to both such fine and imprisonment.” Section 20(2)(a)(ii) g “(2) a bank shall not, without the prior approval in writing of the Bank (that is the Central Bank of Nigeria):– (a) permit to be outstanding, unsecured advances, loans or unsecured credit facilities of an aggregate amount in h excess of N50,000. (i) . . . (ii) to any firm, partnership or private company in which it or any one or more of its directors is in- i terested as a director, partner, manager or agent.” Held – 1. During the period relevant to the charges (20-06-91–31- 07-91), the first accused managed the three companies j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 565 a whilst also managing Kapital Merchant Bank in breach of section 19(3)(a) of the Banks and Other Financial In- stitutions Decree as the companies were not subsidiaries b of the bank. 2. The accused cannot hide under the fact that the disbursements made to KSL (to purchase No. 2 Co-oper Road, Ikoyi) is not a loan but a placement not requiring c approval. The sum is unquestionably a credit facility extended to KSL by the first accused in excess of the limit imposed by the board of the bank. 3. The first accused cannot be heard to say that he dis- d closed his interest “as soon as it was practicable” as he disclosed to the board on 25th February, 1991 whereas the loan was given between February – April, 1990. Be- tween the date of the last disbursement and 25th January, e 1991 when the first accused disclosed, the board had met seven consecutive times. Furthermore, the disclosure was not initiated by the first accused, it was prompted by the board members who received a petition from co- f director making serious allegations of mismanagement against the first accused. 4. The disclosure made no reference to the transaction leading to the heavy disbursements to KSL and made no g mention of the sum disbursed. The so called disclosure of interest was ill-motivated, belated and does not amount to the necessary disclosure envisaged by section 11(1) of the Banking Act, 1969. h 5. The prosecution has established that false debit notes dated 27th September, 1990. (Exhibits FB 57A–57C) were raised in line with instruction given by the first accused as reflected in the internal office memo (exhibit i FB 34 of 27th September, 1990). In the memo it was on record that loans were granted to the said three companies wherein they were not. Loans were not granted to the three Companies until recommendation for same was j made by the credit committee and approved by the board [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

566 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

on 8th March, 1991. This does not answer the prosecu- a tion case that in September, 1990 the first accused purported to show that loans to the three companies existed from the huge advances made to KSL whereas no funds b moved. 6. The attempt to reduce KSL’s indebtedness was to deceive generally and in particular, the regulatory authorities like Nigeria Deposit Insurance Corporation and Cen- c tral Bank of Nigeria into believing that the exposure to KSL was within statutory limits and in priority areas like agriculture and not in contravention of the banking laws. That was deceitful. d (Accused convicted and sentenced to a total fine of N35,000 (Thirty Five thousand Naira) and imprisonment for 3 years.)

Nigerian statutes referred to in the judgment e Banking Act, 1969, sections 11(4); 12(2); 19(2) Banks and Other Financial Institutions Decree 1991, sections 16(a), (b); 19(3)(a); 20(2)(a)(ii) f Criminal Code Act Cap 77 Laws of the Federation of Nige- ria, 1990, section 382(2) Exchange Control Act, 1962, section 8(1) g Second Tier Foreign Exchange Market Act, 1988, section 10(2)

Book referred to in the judgment h Black’s Law Dictionary (6ed) page 1149

Counsel i For the complainant: Prof. M.I. Jegede (with him Mr Ibukun Ajomo) For the first accused: Chief G.N. Uwechue (SAN) (with him Chief G.B. Nkemnacho and Mr J.E. Ugowe) j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE)

Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 567 a Judgment MOMOH J: Both accused were tried on a 27 count charge consisting of 21 counts against the first accused and 6 counts b against the second accused.

Charge COUNT 1: That you, Dr Onwochei Odogwu, while being a c director/chief executive of Kapital Merchant Bank Limited (now in liquidation) at Lagos, between 20th June, 1991 and 31st July, 1991 failed to take all reasonable steps to secure compliance by Kapital Merchant Bank Limited (now in liq- d uidation) with the requirement of section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25 of 1991 in that Kapital Merchant Bank Limited (now in liquidation), without the prior approval in writing of the Central e Bank of Nigeria, permitted to be outstanding unsecured advances of an aggregate amount in excess of N50,000 “to wit” N12,140,502.48 (Twelve Million, One Hundred and Forty Thousand, Five Hundred and Two Naira, Forty-Eight f Kobo) as at 31st July, 1991 in favour of Kapital Securities Limited a private company of which you were a Director and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institutions Decree No. 25 of 1991. g COUNT 2: That you, Dr Onwochei Odogwu, while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) at Lagos, between 20th June, 1991 and h 31st July, 1991 failed to take all reasonable steps to secure compliance by Kapital Merchant Bank Limited (now in liquidation) with the requirements of section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25 of 1991 in that Kapital Merchant Bank Limited (now in liqui- i dation), without the prior approval in writing of the Central Bank of Nigeria permitted to be outstanding unsecured advances of an aggregate amount in excess of N50,000 “to wit”: N12,868,374.70 (Twelve Million, Eight Hundred and j Sixty-Eight Thousand, Three Hundred and Seventy-Four [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 568 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Naira, Seventy Kobo) as at July 31st, 1991 in favour of But- a ler Nigeria Limited a private company of which you were a director and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institutions b Decree No. 25 of 1991. COUNT 3: That you, Kapital Merchant Bank Limited (now in liquidation) at Lagos committed an offence punishable under section 20(7) of the Banks and Other Financial Institu- c tions Decree No. 25 of 1991 in that you, the said Kapital Merchant Bank Limited (now in liquidation) as at 31st July, 1991 without the prior approval in writing of the Central Bank of Nigeria, permitted to be outstanding unsecured ad- d vances of an aggregate amount in excess of N50,000 “to wit” N12,140,502.48 (Twelve Million, One Hundred and Forty Thousand, Five Hundred and Two Naira, Firty-Eight Kobo) in favour of Kapital Securities Limited, a private e company in which Dr Onwochei Odogwu, then a director of Kapital Merchant Bank Limited (now in liquidation), was also a director contrary to section (2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25 of 1991. f COUNT 4: That you, Dr Onwochei Odogwu, at Lagos while being a director of Kapital Merchant Bank Limited (now in liquidation), are deemed to be guilty of an offence by virtue of section 45(1) of the Banks and Other Financial g Institutions Decree No. 25 of 1991, punishable under section 20(7) of the Banks and Other Financial Institutions Decree No. 25 of 1991 in that the said Kapital Merchant Bank Lim- ited (now in liquidation) as at 31st July, 1991, without the h prior approval in writing of the Central Bank of Nigeria, permitted to be outstanding unsecured advances of an aggregate amount in excess of N50,000 “to wit” N12,140,502.48 (Twelve Million One Hundred and Forty Thousand, Five Hundred and Two Naira, Forty-Eight Kobo) i in favour of Kapital Securities Limited, a private company in which, you Dr Onwochei Odogwu, were a director contrary to section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25 of 1991. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 569 a COUNT 5: That you, Kapital Merchant Bank Limited (now in liquidation) at Lagos, committed an offence punishable under section 20(7) of the Banks and Other Financial Institu- b tions Decree, 1991, in that you, the said Kapital Merchant Bank Limited (now in liquidation), as at 31st July, 1991 without the prior approval in writing of the Central Bank of Nigeria permitted to be outstanding unsecured advances of c an aggregate amount in excess of N50,000 “to wit”: N12,868,374.70 (Twelve Million, Eight Hundred and Sixty- Eight Thousand, Three Hundred and Seventy Four Naira, Seventy Kobo) in favour of Butler Nigeria Limited, a private company in which Dr Onwochei Odogwu, then a director of d Kapital Merchant Bank Limited (now in liquidation), was also a director contrary to section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree, 1991. e COUNT 6: That you, Dr Onwochei Odogwu, at Lagos while being a director of Kapital Merchant Bank Limited (now in liquidation) are deemed to be guilty of an offence by virtue of section 45(1) of the Banks and Other Financial In- stitutions Decree, 1991 punishable under section 20(7) of the f Banks and Other Financial Institutions Decree, 1991 in that the said Kapital Merchant Bank Limited (now in liquidation), as at 31st July, 1991 without the prior approval in writing of the Central Bank of Nigeria, permitted to be out- g standing unsecured advances of an aggregate amount in excess of N50,000 “to wit” N12,868,374.70 (Twelve Million, Eight Hundred and Sixty-eight Thousand, Three Hundred and Seventy-four Naira, Seventy Kobo) in favour of Butler h Nigeria Limited, a private company in which you, Dr On- wochei Odogwu, were a director contrary to section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree, 1991 i COUNT 7: That you, Dr Onwochei Odogwu, while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) at Lagos between 20th June, 1991 and 31st July, 1991 failed to take all reasonable steps to secure j compliance by Kapital Merchant Bank Limited (now in [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 570 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. liquidation) with the requirements of section 19(3)(a) of the a Banks and Other Financial Institutions Decree, 1991 in that you were engaged in managing Kapital Merchant Bank Lim- ited (now in liquidation) at a time when you were also a di- b rector of Kapital Securities Limited, a company which was not a subsidiary of Kapital Merchant Bank Limited (now in liquidation) and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institu- c tions Decree, 1991. COUNT 8: That you Dr Onwochei Odogwu, while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) at Lagos between 20th June, 1991 and d 31st July, 1991 failed to take all reasonable steps to secure compliance by Kapital Merchant Bank Limited (now in liquidation) with the requirements of section 19(3)(a) of the Banks and Other Financial Institutions Decree, 1991 in that e you were engaged in managing Kapital Merchant Bank Lim- ited (now in liquidation) at a time when you were also a director of Butler Nigeria Limited a company which was not a subsidiary of Kapital Merchant Bank Limited (now in liqui- f dation), and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institutions Decree, 1991. COUNT 9: That you, Dr Onwochei Odogwu, while being a g director/chief executive of Kapital Merchant Bank Limited (now in liquidation) at Lagos, between 20th June, 1991 and 31st July, 1991 failed to take all reasonable steps to secure compliance by Kapital Merchant Bank Limited (now in liq- h uidation) with the requirements of section 19(3)(a) of the Banks and Other Financial Institutions Decree, 1991, in that you were engaged in managing Kapital Merchant Bank Lim- ited (now in liquidation) at a time when you were also a director of Kapital Investment Limited, a company which is i not a subsidiary of Kapital Merchant Bank Limited (now in liquidation) and thereby committed an offence punishable under section 46(a) of the Banks and Other Financial Institu- tions Decree, 1991. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 571 a COUNT 10: That you Kapital Merchant Bank Limited (now in liquidation) at Lagos committed an offence punishable under section 47 of the Banks and Other Financial Institu- b tions Decree, 1991 in that you, the said Kapital Merchant Bank Limited (now in liquidation), were being managed by Dr Onwochei Odogwu between 20th June, 1991 and 31st July, 1991 at a time when he was also a director of Kapital Securities Limited, a company which was not a subsidiary of c Kapital Merchant Bank Limited (now in liquidation) contrary to section 19(3)(a) of the Banks and Other Financial Institutions Decree, 1991. d COUNT 11: That you Dr Onwochei Odogwu, at Lagos while being a director of Kapital Merchant Bank Limited (now in liquidation) are deemed to be guilty of an offence by virtue of section 45(1) of the Banks and Other Financial In- stitutions Decree, 1991 punishable under section 47 of the e Banks and Other Financial Institutions Decree, 1991 in that between 20th June, 1991 and 31st July, 1991 you were engaged in managing Kapital Merchant Bank Limited (now in liquidation) at a time when you were also a director of Kapi- f tal Securities Limited, a company which was not a subsidiary of Kapital Merchant Bank Limited (now in liquidation) contrary to section 19(3)(a) of the Banks and Other Finan- cial Institutions Decree, 1991. g COUNT 12: That you Kapital Merchant Bank Limited (now in liquidation) at Lagos committed an offence punishable under section 47 of the Banks and Other Financial Institu- tions Decree, 1991 in that you the said Kapital Merchant h Bank Limited (now in liquidation), were being managed by Dr Onwochei Odogwu between 20th June, 1991 and July, 1991 at a time when he was also a director of Butler Nigeria Limited, a company which was not a subsidiary of Kapital i Merchant Bank Limited (now in liquidation) contrary to section 19(3)(a) of the Banks and Other Financial Institution Decree, 1991. COUNT 13: That you, Dr Onwochei Odogwu, at Lagos j while being a director of Kapital Merchant Bank Limited [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 572 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(now in liquidation) are deemed to be guilty of an offence by a virtue of section 45(1) of the Banks and Other Financial In- stitutions Decree, 1991 punishable under section 47 of the Banks and Other Financial Institutions Decree, 1991 in that b between June, 1991 and 31st July, 1991 you were engaged in managing Kapital Merchant Bank Limited (now in liquidation) at a time when you were also a director of Butler Ni- geria Limited, a company which was not a subsidiary of c Kapital Merchant Bank Limited (now in liquidation) contrary to section 19(3)(a) of the Banks and Other Financial Institutions Decree, 1991. COUNT 14: That you Kapital Merchant Bank Limited (now d in liquidation) at Lagos committed an offence punishable under section 47 of the Banks and Other Financial Institu- tions Decree, 1991 in that you, the said Kapital Merchant Bank Limited (now in liquidation) were being managed by e Dr Onwochei Odogwu between 20th June, 1991 and 31st July, 1991 at a time when he was also a director of Kapital Investment Limited, a company which was not a subsidiary of Kapital Merchant Bank Limited (now in liquidation) con- f trary to section 19(3)(a) of the Banks and Other Financial Institutions Decree, 1991. COUNT 15: That you Dr Onwochei Odogwu, at Lagos while being a director of Kapital Merchant Bank Limited g (now in liquidation) are deemed to be guilty of an offence by virtue of section 45(1) of the Banks and Other Financial In- stitutions Decree, 1991 in that between 20th June, 1991 and 31st July, 1991 you were engaged in managing Kapital Mer- h chant Bank Limited (now in liquidation) at a time when you were also a director of Kapital Investment Limited, a company which was not a subsidiary of Kapital Merchant Bank Limited (now in liquidation) contrary to section 19(3)(a) of i the Banks and Other Financial Institutions Decree, 1991. COUNT 16: That you, Dr Onwochei Odogwu, while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) at Lagos between 8th January, 1991 and j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 573 a 31st May, 1991 failed to take all reasonable steps to secure compliance by Kapital Merchant Bank Limited (now in liquidation) with the requirements of section 16(1) of the Bank- b ing Act, 1969 in that Kapital Merchant Bank Limited (now in liquidation) failed to keep proper Books of Account in respect of all its transactions “to wit”: it did not possess Con- trol Accounts for its Foreign Correspondent Accounts’ and c thereby committed an offence punishable under section 16(4)(a) of the Banking Act, 1969. COUNT 17: That you, Kapital Merchant Bank Limited (now in liquidation) at Lagos committed an offence punish- d able under section 35 of the Banking Act, 1969 in that you, the said Kapital Merchant Bank (now in liquidation), between January 8th, 1991 and May 31st, failed to keep proper Books of Account in respect of all your transactions “to e wit”: you did not possess Control Accounts for your Foreign Correspondent Accounts and thereby committed an offence contrary to section 16(4)(a) of the Banking Act, 1969. COUNT 18: That you Dr Onwochei Odogwu, at Lagos f while being a director of Kapital Merchant Bank Limited (now in liquidation), are deemed to be guilty of an offence by virtue of section 33(1) of the Banking Act, 1969 punishable under section 35 of the Banking Act, 1969 in that the g said Kapital Merchant Bank Limited (now in liquidation) between 8th January, 1991 and 31st May, 1991 failed to keep proper Books of Account in respect of all its transactions “to wit”: it did not possess Control Accounts for its h Foreign Correspondent Accounts and thereby committed an offence contrary to section 16(4) of the Banking Act, 1969. COUNT 19: That you, Dr Onwochei Odogwu, while being an official of Kapital Merchant Bank Limited (now in liqui- i dation) between the 19th February, 1990 and 2nd April, 1990, granted to Kapital Securities Limited, credit facilities which were not authorised in accordance with the Rules and Regulations of the said Kapital Merchant Bank Limited j (now in liquidation) “to wit”: the credit facilities amounting [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 574 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. in total to N51,000,000 (Fifty-One Million Naira) were in a excess of the limit reserved to you by the board of directors of the bank and you thereby committed an offence punishable under section 12(2) of the Banking Act, 1969. b COUNT 20: That you, Dr Onwochei Odogwu, at Lagos while being a director/chief executive of Kapital Merchant Bank (now in liquidation) between February and April, 1990 contrary to section 11(1) of the Banking Act, 1969, were in- c terested in credit facilities granted to Kapital Securities Lim- ited for the purchase of No. 2 Cooper Road, Ikoyi, Lagos (by virtue of your status as managing director and Share- holder in Kapital Securities Limited) but failed to disclose d your interest as soon as possible to the Board of directors of the said Kapital Merchant Bank Limited (now in liquidation) and thereby committed an offence punishable under section 11(7) of the Banking Act, 1969. e COUNT 21: That you, Dr Onwochei Odogwu, at Lagos while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) between February and April, 1990 contrary to section 11(4) of the Banking Act, f 1969 held the office of managing director of Kapital Securi- ties Limited, the duties and interests of which might have created conflicts with your position as a director/chief executive of Kapital Merchant Bank Limited (now in liquida- g tion) but failed to declare at a meeting of the Board of directors of Kapital Merchant Bank Limited (now in liquidation) the fact of your office as managing director, Kapital Securi- ties Limited and the possibility that it might create a conflict h with your status as chief executive of Kapital Merchant Bank Limited (now in liquidation) and thereby committed an offence punishable under section 11(7) of the Banking Act, 1969. i COUNT 22: That you, Dr Onwochei Odogwu, at Lagos while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation), between February, 1990 and May, 1991 contrary to section 10(2) of the Second Tier j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 575 a Foreign Exchange Market Decree, negotiated foreign exchange to the value of US$4,766,324.62 (Four Million, Seven Hundred and Sixty-six Thousand, Three Hundred and b Twenty-Four Dollars and Sixty-Two Cents) (Naira equivalent of N46,989,941.98) without satisfactory documentary evidence of a valid, due or outstanding obligation in respect of a commercial or service transaction or of a capital trans- c action and thereby committed an offence punishable under section 19(1)(c) of the Second Tier Foreign Exchange Mar- ket Decree. COUNT 23: That you, Dr Onwochei Odogwu, at Lagos d while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) between 4th August, 1989 and 10th April, 1991 stole the sum of £392,008 (Three Hundred and Ninety-Two Thousand and Eight Pounds) (Naira equivalent of N5,995,527.16) belonging to Kapital e Merchant Bank Limited (now in liquidation) in that the said sum was placed to the credit of Azie Limited without the payment of any Naira equivalent and thereby committed the offence of stealing, punishable under section 390(7) of the f Criminal Code Act. COUNT 24: That you, Dr Onwochei Odogwu at Lagos, while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) between the 25th of Feb- g ruary, and 31st of July, 1991 with intent to defraud, made or were privy to making false entry in the directors’ Minutes Book belonging to Kapital Merchant Bank Limited (now in liquidation) your Employer, “to wit”: by purporting to show h that C.E.I. Farms Limited, Benue Cattle Ranch Limited and Butler Nigeria Limited has each been granted Term Loans to the tune of N15,000,000, N15,000,000 and N10,000,000, respectively for the purchase of plant and machinery and i thereby committed an offence punishable under section 435(2)(b) of the Criminal Code Act. COUNT 25: That you, Dr Onwochei Odogwu while being a director/chief executive of Kapital Merchant Bank Limited j (now in liquidation) between March 1990 and May 1991, [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 576 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. forged a Second Schedule Return on Loans and Advances a submitted to the Central Bank of Nigeria by reporting placements with Kapital Securities Limited amounting in total to N40,000,000 as manufacturing, agricultural and real b estate loans to each of C.E.I. Farms Limited, Benue Cattle Ranch Limited and Butler Nigeria Limited in the sum of N15,000,000, N15,000,000 and N10,000,000, respectively and thereby committed an offence punishable under section c 467 of the Criminal Code Act. COUNT 26: That you, Dr Onwochei Odogwu, at Lagos while being a director/chief executive of Kapital Merchant Bank Limited (now in liquidation) between May and June d 1990, stole the sum of N2,806,129.62 (Two Million, Eight Hundred and Six Thousand, One Hundred and Twenty-Nine Naira and Sixty-Two Kobo) belonging to Kapital Merchant Bank Limited (now in liquidation), in that the said sum rep- e resenting profits accruing to Kapital Merchant Bank Limited (now in liquidation) from sale of foreign exchange to Peu- geot Automobile Nigeria Limited was placed to the credit of Kapital Securities Limited and thereby committed the of- f fence of stealing punishable under section 390(7) of the Criminal Act. COUNT 27: That you, Dr Onwochei Odogwu, at Lagos, while being a director/chief executive of Kapital Merchant g Bank Limited (now in liquidation) between July, 1990 and March, 1991 with intent to defraud, made or were privy to making a false entry in the Books of Account belonging to Kapital Merchant Bank Limited (now in liquidation) your h Employer “to wit”: by purporting to show that C.E.I. Farms Limited, Benue Cattle Ranch Limited and Butler Nigeria Limited and each been granted credit to the tune of N15,000,000, N15,000,000 and N10,000,000, respectively i and thereby committed an offence punishable under section 435(2)(b) of the Criminal Code Act. TRIBUNAL: The first accused pleaded not guilty to each of the counts against him. A plea of not guilty was entered j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 577 a under section 468 of the Criminal Procedure Code for the second accused bank which did not appear by any representative. b Case for the prosecution Nine (9) witnesses presented the case for the prosecution and a total of 61 exhibits were tendered. Below is the sum- c mary of the evidence of each witness. PW1 Moses Adaguusu Legal Officer with the Nigeria Deposit In- d surance Corporation (“NDIC”) said:– The first accused is a director and chief executive of the second accused until 21st January, 1994 when the banking licence of the second accused was revoked and the NDIC e appointed the Liquidators. Exhibit FB1 is the Federal Offi- cial Gazette containing the notice of revocation of Licence No. 000032 of 1st December, 1988 granted KMB Ltd. The NDIC thereafter took custody of the entire affairs including f banking records of the second accused. The Gazette notified the public that with effect from the 21st January, 1994 the said licence was cancelled and that the NDIC appointed liquidators to the said bank. The witness tendered the minutes g book of the board of directors of the second accused as exhibit FB 2 and also tendered the Certificates of Incorporation and particulars of directors in respect of the registration of several Companies in which the first accused had interest. Tendered as exhibits FB3–FB12. The companies included h Kapital Securities Ltd, Butler Nig. Ltd Kapital Investments Ltd (hereinafter referred to as “KSL”, “BNL” and “KIL”, respectively) the witness said that the companies which were floated by the first accused were made customers of the sec- i ond accused and had heavy unsecured debit balances against their names in the books of the bank. That no security documents like documents of title deeds, mortgage, certificates of shares etc securing the heavy advances were avail- j able in the bank. The witness admitted in cross-examination [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 578 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. that the first accused subsequently resigned his directorship a of two of the companies. Two letters, exhibit FB13(D) and 14(d), were tendered through him in a bid to discredit his evidence that no security was given for the loans. b PW2 Ibrahim Abubakar Kalim-Madaki an Accountant and Sen- ior Manager in the Receivership and Liquidation Depart- c ment of NDIC. He participated in the actual liquidation process of the second accused (“Bank”). He was among the members of the team that took custody of the banking documents and affairs of the bank. As the officer in charge of the credit and advances investigation of the bank he took d custody of all the available ledger cards, the loans and advances files of customers of the bank and collateral files where available. His evidence centered on the accounts of the three private companies in which the first accused was a e shareholder and a director. The ledger accounts of the three companies as customers of the bank were tendered to show the debit balances as at 31st July, 1991. The witness said that the outstanding sums relate to Counts 3 to 6 of the f charge. Ledgers in relation to the five accounts of Kapital Securities Ltd with KMB were tendered as exhibits FB 15, FB 16, FB 17, FB 18 and FB 19. Three ledger cards in respect of the accounts of Butler Nigeria Limited are exhibits g FB 20, FB21 and FB22. A tabulated list of the sums in the ledgers drawn up by the witness is exhibit 23 paged (a)–(c). As at 31st July, 1991 Kapital Securities had a debit balance of N12,140,502.48 h while Butler Nig. Ltd had a debit balance of N12,868,374.70. As at 20th January, 1994, the aggregate debit balance of KSL was N44,410,076.20, while Butler had total outstanding debit of N26,981,101.89. i The witness said further that the ledgers disclose that various sums were granted as loan or overdraft by the bank to the companies and that no security existed for the repayment of the facilities. The witness did not sight any security j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 579 a document. The two letters exhibits FB13 and FB14D, were tendered through the witness, they relate to demands by the NIDC as liquidators to the two companies for payment of b the outstanding sums. In each, the right to realise the security was alluded to. The letter mentioned that failure to pay would compel the liquidators to “realise the security” for the loan. The witness c said that all letters of demand were prototype, routinely printed and fashioned after the type used by the American Fed. Deposit Insurance Corporation. He was emphatic that no security actually existed for the repayment of the out- d standing sums against the two companies. The date the facilities were granted cover the period 1990 to 1992. PW3 Mrs Dolphine Uka of the bank (“second accused bank”) e was in charge of its treasury and foreign exchange department from September, 1990 to January, 1992. She said the first accused was the chief executive and the chairman and managing director of the bank. f That the first accused was the overall boss and that the various heads of departments reported directly to him and received instructions directly from him. She said the funds of the bank were sourced from individuals, corporate clients g or other banks who are known as the financiers or depositors. If the fund sourced is excessive, the bank may decide, as the practice was, to “place” some of the excess funds with other banks. Such “placements” are investments which at- h tract interest for the benefit of the bank. It is the first accused who ultimately decided which of the banks to receive the placement. The treasury department handled the placement transaction. Under cross-examination and re-examination on i the issue of “placement” the witness said “Board approval is not necessary for the securing or placement of funds. Placement is not tantamount to loan”. On the securing and disbursement of foreign exchange the j witness said she was in-charge of the foreign exchange [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 580 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. transaction only as it relates to the funds derived from the a Central Bank after bidding at auctions. The witness would prepare the list of foreign exchange applicants but after allocation by the Central Bank, the disbursement is solely han- b dled by the first accused. Foreign exchange derived from sources other than the Central Bank and export proceed is known as autonomous fund. The sourcing and disbursements or uses of the autonomous funds (usually in dollars c and pounds sterling) are handled solely by the first accused. PW4 Akin Olasunkanmi was an Assistant Manager in the Cor- porate Banking Department of the bank (“second accused”). d His duties included processing application for loans and returning same through her manager to the head of that department with recommendation as to whether to grant or refuse the application. The application is then passed to the e first accused who took the final decision as to whether to grant the loan or not. The witness said that in the case of the loans granted to Kapital Securities Ltd and Butler Nig. Ltd, the aforesaid f procedure was not followed. Rather the first accused directed that a credit approval memo be issued in the name of each company. The witness who prepared the memos passed same to the first accused who approved the loans for the g companies. PW5 Johnson Idowu Osinowo was a deputy director of the h Banking Supervision Department, Central Bank of Nigeria. He told the Tribunal that his section handles the processing of applications for banking licences and other applications for approval in relation to banking activities. He tendered as exhibit FB 26 the banking licence issued on 1st December, i 1988 to Kapital Merchant Bank under the Banking Act, 1969. He said if a bank wishes to exceed its credit limit above N50,000 or to invest in another company, the approval of the Central Bank is required by the Banking Act, j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 581 a 1969, sections 20 and 21 and/or Banks and Other Financial Institutions Decree No. 25 of 1991 (“BOFID”). He said that after granting the second accused licence to operate vide ex- b hibit FB 26 no application for approval to exceed its credit limit of N50,000 was received. That no approval was granted to the bank to exceed its lending limit or above the said amount limited by law. He tendered exhibit FB 27 writ- c ten by the Central Bank to the liquidators of the bank pointing out that unsecured credit had been granted to the companies named therein exceeding N50,000 without the approval of Central Bank. The listed companies include Kapital Secu- rities Ltd, Butler Nig. Ltd, Kapital Investment Ltd in which d the first accused had an interest as a director. The witness said the accused allowed unsecured advances to be outstanding. e PW6 Pius Ajumobi was the Head of Field Examination of the NDIC. He conducted routine examination of the bank for the period covering 8th May, 1991 to 22nd July, 1991. His Re- f port exhibit FB 28 was dated 27th July, 1991. The contents of the report were explained in evidence by the witness who had been conducting examination of banks for 15 years. Re- garding foreign correspondent account, the witness referred g to page 10 of exhibit 28 to show that there were complaints that the bank did not keep proper records of foreign correspondent accounts. He said it is obligatory and also a requirement of the bank- h ing practice for banks to keep control account for its foreign correspondent accounts. By control account is meant an account kept as a summary of all accounts used for cross- checking the accuracy of all entries in individual accounts as i well as ascertaining the balances and summaries of other accounts under the control. The witness pointed out in his findings at page 10 that 14 listed foreign correspondent accounts had no control accounts kept by the bank. His Report is j based on monthly returns of the bank to the Central Bank, [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 582 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the minutes book of the Board of Directors exhibit FB2, a general ledgers for the control account, subsidiary ledgers of individual ledgers of customers, registers, waste, journals, vouchers etc. b The witness touched upon the property at No. 2, Cooper Road, Ikoyi purchased by the first accused for Kapital Secu- rities Ltd (“KSL”) from the funds of the second accused, the bank. At page 17 of the report, the property is shown to have c cost N60,763,190 including fees/charges. The witness told the Tribunal that the purchase is irregular in that the disbursement did not receive the Board’s approval as shown at pages 16 to 17 of his report exhibit FB 28. He said it was d also contrary to the Board’s resolution regarding the limit of advances that could be lawfully made. He referred to page 2 of his exhibit 28 and also to page 34 of the Minutes Book exhibit FB 2, showing that the Board Credit Committee set up by the board of directors of the bank was empowered to e approve credit facilities of between N5 million and N10 million but it refers others in excess of N10 million to the full board for approval. The witness said: “The purchased property was classified f as an investment in books of the second accused (“bank”) whereas it was not”. Forty million of the amount was shown to be transferred to various names like (1) C.E.I. Farms Ltd, N15,000,000 (2) Benue Ranch Ltd N15,000,000 and (3) g Butler Nig. Ltd N10 million making a total of N40,000,000. That no physical transfer of money actually took place; it was a camouflage to give a semblance of an investment. The three named companies did not apply and were not granted h the said loans – see pages 17–18 of my report”. The first accused is the director of the three mentioned companies to whom he purportedly transferred or advanced the total of N40,000,00. The bank had at the material time, about a total i reserve of N29 million. No bank is allowed to advance more than 50% of its paid up capital and statutory reserve to anyone person. Therefore, the second accused bank had no authority to lend more than its N29 million made up of paid up capital and statutory reserve. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 583 a The witness said that Board Credit Committee of the bank was not involved in approving any bank credit till February, 1991 when the Board approved some loans, retrospectively. b The approved loans did not even include those granted in 1990 to Kapital Securities Ltd, to purchase the Ikoyi property. That the first accused declared his interest in KSL and others for the first time at the Board meeting of 25th Febru- ary, 1991 about a year after the first accused purchased the c property in the name of KSL with the funds of the bank (“second accused”). PW7 d He is Suleiman Abutu Deputy Superintendent of Police of the Federal Investigation and Intelligence Bureau (“FIIB”). He investigated the case against the accused based upon the complaint received that the first accused granted unsecured e loans to companies in which he was interested, granted loans above the amount limited by law and above the amount authorised by the board of directors, removal of certain amount from the Foreign Exchange Account and other alle- f gations. Upon his arrest, his house and premises at Plot 115, Gabaro Close Victoria Island, Lagos was searched. Copies of memoranda and articles of association in respect of several private companies listed as A to R (seventeen in number) supposedly floated by the first accused were recovered. g Only five of the companies are relevant to this case and some are Kapital Merchant Bank Ltd (second accused), Kapital Securities Ltd, and Benue Cattle Ranch Ltd. The files on most of the listed companies were also recovered. h All items recovered are listed and attached to the search- warrant (exhibits ‘FB 30’ of six pages). The Memorandum and Articles of Association of each of the companies relevant to this case were tendered as exhibits. The Tribunal at i the last stage of the proceedings called for the Memorandum and Articles of Association of the Kapital Merchant Bank Ltd and it was tendered as exhibit FB 61. The witness said that on 15th July, 1995 the first accused j was interrogated and he volunteered his statements under [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 584 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. caution which the accused recorded himself on the 15th, a 16th, 19th and 29th July, 1995 also on the 25th October and 16th November, 1995 respectively. The six statements were tendered as exhibits FB31A–FB31F. b The witness said that Kapital Securities Limited, one of the companies in which the first accused had interest was operating six bank accounts and that as at 30th June, 1995 a total amount of N79,267,038.88 representing loans and advances c made to the company (“KSL”) was outstanding. As at 30th June, 1995 Butler Nig. Ltd had a total amount of N12,500,000 on its three accounts with the second accused representing debit balance on loans and over-draft facilities d made to the company. The relevant ledgers were identified as exhibits FB15–FB22. As at 30th June, 1995 the amount outstanding against the third company, Kapital Investment Ltd was N2,550,000. The grand total outstanding against the e three companies came to N94,117,038.88 without interest. Investigation report was tendered as exhibit FB32D. Witness said that his investigation revealed that no Board approval was received or given for the loans and advances made by f the first accused to the said three companies. The first accused did not disclose to the board of directors of the bank his interest in the three companies. He agreed that the minutes of the Board meeting held on 25th February, 1991 g showed that the first accused declared his interests in nine of the companies including Kapital Securities Ltd, Butler Nig. Ltd and Kapital Investment Ltd. PW8 h Mr Afolayan Ayoku-Babatunde, the Senior Bank Exam- iner in the Banking Supervision Dept. of the Central Bank of Nigeria. The witness was detailed by the CBN to investigate certain allegations made against first accused by a director i of the second accused (“Kapital Merchant Bank”). The Re- port of the Investigation is exhibit FB 33 signed 13th May, 1991 by the witness. The prosecution relies on the findings of the witness in support of some of the charges against the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 585 a accused specifically counts 1, 2, 3, 4, 5 and 6. The first accused who was served with the Report exhibit FB 33 replied by this exhibit FB 36. Both documents exhibits 33 and 36 b forming part of the evidence before the Tribunal shall be taken into account in this judgment. The witness investigated specific allegations made against the first accused in connection with matters including:– c (1) The purchase of No. 2, Cooper Road, by KSL with the funds of the bank. (2) Falsification of records in relation to the alleged loans granted to the companies of the first accused. d (3) Foreign Exchange deals involving the sum of 392,008 pounds sterling. The witness found that the amount expended for the pur- e chase of the property at Cooper Road was recorded in the books of the bank as “placement” which the first accused said was not a loan. But the witness explained that the transaction had the semblance of an advance or loan to KSL to purchase the property. The witness said that a total place- f ment of N72,891,941 from the bank to KSL was recorded while KSL is shown to have also placed a total of N21,535,261.56 with the bank “thus resulting in an effective lending of N51.4 million”. The witness did not regard the g bank’s exposure for the purchase of the property as “a placement” but as “an unsecured loan”. PW8: Stated in his report, his findings that the first accused engaged in the practice of imprudent lending of the bank’s h funds and in contravention of the statutory lending limit and that the bank’s exposure to Kapital Securities Ltd (“KSL”) was colossal. That among a number of individual shareholders, Kapital Securities Ltd (“KSL”) is the only corporate i shareholder of the bank. It holds 600,000 shares in trust for three of first accused’s children. The first accused was the managing director of both the bank and KSL. The exposure of the bank to KSL was mainly in respect of property acqui- j sition. KSL is a company owned mainly by the first accused [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 586 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. and members of his family. The company operated five ac- a counts with the bank and had a total debit balance of N44,410,076.20 as at 20th April, 1994. As at 31st July, 1991 (which date is relevant to counts 1, 3 and 4) the outstanding b debits in 3 of the 5 accounts of the company (A/C Nos. 50- 1122, 30-1005 and 39-5001 exhibits FB17–FB19 and FB23A, respectively) amounted to N12,140,502.48 which was not secured. c The witness, PW8, said further that it was unlawful for a Merchant Bank like the second accused to allow unsecured credit beyond 50% of the bank’s shareholders’ fund as it violates the Banks and Other Financial Institutions Decree d No. 25 of 1991 (“BOFID”). That as at June, 1990, the bank’s total deposit was N183 million whereas its exposure to KSL was N105 million. Part of the funds exposed in favour of KSL was used to purchase e the property at No. 2 Cooper Road, Ikoyi Lagos at a total cost of N75 million excluding processing charges. There was no board resolution authorising the advances. The bank expended a total of N51 million in three instalments by f cheque for the purchase of the Ikoyi house for KSL. Apart from the three instalments totalling N51 million, other payments were made for consent, stamping and agency fees which brought the total amount expended by the bank in re- g spect of the property to N72,891,941 as at June, 1990. The witness explained the difference between placement and lending and added that the meeting point between the two is that each involves parting with funds realisable h through payment of the principal sum and agreed interest. He said that if the amount was placed or invested a “deal slip” ought to be prepared showing details of the placement in proof of the placement. That was not done in respect of i the Ikoyi property. He said that the transaction required the board’s approval, and condemned in strong terms the first accused in the disbursement effected by the accused. He said the disbursement j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 587 a was done in contravention of statutory lending requirements and was abusive of his office for the accused to have “unilaterally approved credit to a company wholly owned by his b family for property acquisition”. Then came the issue of falsification of the records by purporting to have granted loans to some companies as stated in counts 24, 25, and 27. The witness said it was to device a c means of reducing the exposure of KSL to fall within the statutory limit that he resorted to raising phoney loans totalling N40,000,000 in the names of his companies. He explained it thus:– d “The paid up capital and statutory reserve of the 2nd accused was then N16 million. The 2nd accused could not lawfully advance more than N16 million to any one borrower. It was not lawful to have made the N54.1 million net or effective lending to KSL. It e was to reduce the exposure of KSL that the KMB purportedly made loans totalling N40 million to the said 3 companies. The loan was on paper only, there were no movement of the funds to the so called beneficiaries. The companies were granted facilities before they became customers of the Bank. The N40,000,000 was f allegedly granted in 1990 whereas the bank accounts were opened in February 1991.” “The 1st accused made it appear on records as if in fact the loans were granted to his 3 companies in priority areas. The false returns g however terminated in May 1991 after we visited on investigation. Thereafter no such entries were reflected in the June, 1991 Returns said the witness.” On the issue of the 392,008 Pounds Sterling the witness said his investigation disclosed that on the 4th August, 1989 that h sum was sold to Azie Ltd and that no Naira equivalent was paid until 10th April, 1991 when Kapital Securities Ltd (KSL) had its account debited with the Naira equivalent – N5,995,527.16. That the procedure for purchasing foreign i exchange was violated, particularly the requirement that there must be an application and the value of the foreign exchange must be credited before transferring same. KSL did not apply that the money be disbursed on its behalf to Azie j Ltd London. The Central Bank regarded the transaction as [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 588 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

“undisclosed credit facility” granted for the period and or- a dered the bank to pay the interest at the applicable lending rate. See exhibit 37 CBN letter to first accused dated 27th August, 1991 tendered by the witness PW8. The interest was b paid as ordered. The transfer of the Foreign Exchange from the bank’s account is subject matter of the theft charge in Count 23 of the charge. PW9 c Mr Festus Akinnauonu, a Deputy Director, Bank Examina- tion Depart, Central Bank of Nigeria (“CBN”). He conducted the routine examination of the Foreign Exchange op- d eration of the second accused (“Bank”). The Report of the routine examination exhibit FB 40 covers the period 1st Feb- ruary, 1990 to 31st May, 1991. The evidence of the witness is relevant to Count 22 only which involves the transfer of various sums totalling $4,766,324.62 without documentation e as charged. The witness confirmed that during the examination it was discovered that various disbursements amounting to $4,766,324.62 were made in respect of transactions without documentation and the purposes of which were not indi- f cated. Appendix 11 to the Report, exhibit 40, shows details of the transactions numbering about 94 cases of transfers of funds in American dollars by telex. That the available telex only showed the dates of remittance, the applicant, the bene- g ficiary, the amount and telex reference number. But the purpose or the use to which the funds were meant was not disclosed. The witness said that the total amount of over $4.7 million dollars were disbursed “for purposes that were not h readily discernable and without documentary evidence of a valid, due or service transaction rendered by the beneficiaries in the remittance contrary to section 10(2) of the SFEM Decree and section 8(1) of the Exchange Control Act, 1962. i The witness said that when he drew the attention of the first accused to the lapses committed by failing to document the purpose of the disbursements of the Foreign Exchange, the first accused explained he thought that the foreign j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 589 a Exchange totalling the said $4,766,324.62 could be disbursed without such details since the funds were sourced from an autonomous market and not directly from the Cen- b tral Bank. The witness regarded the explanation as untenable and stressed that the requirement of proper documentation of foreign exchange disbursed applies to funds sourced from the Central Bank as well as funds sourced from the autono- c mous market. He said that the first accused subsequently produced documents in support of only six out of the listed 94 transfer transactions. The witness recommended to the Central Bank that the accused bank be made to refund to the Central Bank the amount disbursed irregularly and to show d cause why the dealership licence of the bank should not be suspended for gross violation of the laws and regulations on SFEM operations. A penalty of 1% of the naira equivalent of the remitted amount was subsequently imposed by the Cen- e tral Bank after considering the representations for waivers made by the accused. The witness tendered as exhibit FB41 the first accused’s f response to the Foreign Exchange Routine examination report and as exhibit FB43 the letter appealing for a review of the Central Bank’s earlier decision that the Foreign Ex- change be refunded. At the close of the case for the prosecu- g tion presented by nine witnesses, the first accused and one other witness presented the case for the first accused.

Case for the defence h DW1, Olaronke Enilari, managing director of Harman Nominees Ltd was the the corporate Secretary to Kapital Merchant Bank Ltd (“second accused”). The witness said that:– i In her capacity as the managing director of her company – the secretary to the bank, she attended all but one meeting of the board of directors of the bank. Her company is also secretary to Kapital Securities Ltd (“KSL”), Butler Nig. j Ltd (“BNL”) and Kapital Investments Ltd (“KIL”). Her [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 590 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Company’s roles included convening meetings of the mem- a bers of the companies; filing all statutory returns with the Corporate Affairs Commission, Abuja, taking down minutes of meetings and after the minutes have been adopted by the b board and signed by the chairman, she pasted same in the Minutes Book of the Board. Exhibit FB 2 is the Minutes Book she kept in respect of the Board meetings of directors at the Kapital Merchant Bank. She pasted all the minutes of c the 35 meetings (except one) of the minutes for the period 19th January, 1989 to 19th October, 1993. The witness filed from time to time the statutory returns of “Particulars of directors and any changes therein”. The returns she filed in d respect of the directors of the accused’s three companies in 1991 were tendered as follows:– (1) Exhibit FB44 (D) paged 1–6 filed on 11/12/91 showing at page 3 the letter of the first accused dated November 14th, 1991 resigning his directorship of Kapital Securities Ltd. e (2) Exhibit FB45 (D) paged 1–4 showing at page 3 the first accused’s letter dated October 29th, 1991 resigning his directorship of Butler Nigeria Limited. (3) Exhibit FB11 (identified by witness) filed 18/11/91 show- f ing that the first accused resigned as director of Kapital In- vestment Limited on 30th October, 1991. It was however observed that unlike the case of other returns, no written letter of resignation or the Board’s resolution accepting same was attached to the Returns. g The witness made reference to the 18th meeting of the board held on 25th February, 1991 where at page 127 of exhibit FB2 the first accused declared his interest in nine companies h including the three in question. She referred to the nine- teenth meeting of the Board held on 8th March, 1991 where at page 134 the board ratified the N10 million loan by the Credit Committee to Butler Nigeria Limited. At page 135 is the Board’s approval of the N15 million loans made to i C.E.I. Farms and Benue Cattle Ranch Limited respectively. The witness tendered the Annual Report of the Board of directors of the bank for the year ending 31st December, 1990 as exhibit FB 46D. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 591 a Tendered as exhibit 47D is the attendance register of the board members of the bank covering 19th January, 1989 to 19th October, 1993. Tendered the Joint Auditors Report, ex- b hibit FB48, based on allegations made by Mgbeze against the accused. The witness referred to the constituted credit committee of the Board of directors and confirmed that the first accused c was the chairman while her company Harman Nominees Ltd was the secretary. She tendered a Credit Approval Memo (exhibit 49) dated 10th September, 1990 evidencing the N15 million loan to C.E.I. Farms Limited. d On the question of false entry in the minutes book of the purported loans allegedly made to three of the accused’s companies, the witness said she did not make any false entry but took down the minutes of what transpired at the meeting. e EVIDENCE OF DW2 The first accused testified as DW2 and said he was relying on his explanations in the statements, exhibits FB31A– f FB31F, he volunteered to the police. In addition he gave detailed evidence in his defence. In the six statements the first accused gave his biographical data, schools attended, educational qualification and work experience with various companies. The following are excerpts of his statements as rele- g vant to the charges against him:– “I have worked with Kapital Securities Limited (1981–1989), But- ler Nigeria Limited (1982–89, 94–95), Kapital Merchant Bank Ltd (1989–1992 full time, part-time 92–94), Kapital Securities etc. h (1974 to present).” In 1983, I through Kapital Securities Limited (formerly called Kapital Investment and Trust Co Ltd) promoted the formation of Kapital Merchant Bank Ltd, and started opera- i tions in April, 1989. Kapital Securities Ltd and I, bore all the expenses of setting up the bank from 1983 to 1989. I also nominated all the directors, recruited staff, and set up the bank from scratch. I was appointed chairman/chief executive j by the board of directors in 1989 at start of the bank. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 592 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Butler Nigeria Limited, (Kapital Securities) was set up in a 1982 by me, Dr Odogwu acting as managing director until a new managing director, Mr P. Todorou, was appointed at about 1989/90. Kapital Securities Ltd (formerly Kapital In- b vestment and Trust Co Ltd) was set up in 1981 by me. The initial directors were B.C. Ude (Alh – chairman), Dr O. Odogwu, Prof. A.B. Kasunmu, P.M. Mbanefo (Late) 1981– 91 and Osimi Foundation, and Advanced Technologies Ltd, c to date; Dr Odogwu acts for Osimi Foundation. Benue Cattle Ranch Ltd, was set up by me. I have not attended meetings since 1990/91 after cancellation of KMB’s facilities to the company by the CBN. CEI Farms Ltd was set up by me in d 1982/83. I was a director of others. Azie Ltd is a U.K. Com- pany, set up in 1988, in which I am adviser/consultant. Im- perial Furniture Ltd was set up in mid-80’s. I was chairman/director. e I was a director of some of these companies while chairman/CEO of the bank as is usual. I also stopped acting for these companies following CBN’s directives in 1990/91 to that effect and after BOFI Decree, 1991. Some of my asso- f ciated companies namely Butler Nigeria Ltd, Kapital Securi- ties Ltd, Kapital Investment Ltd, (May be) borrowed monies from KMB, duly documented, and approved by the Board (see Minutes Book with CBN/NDIC). Butler Nigeria Ltd borrowed monies for the construction of Benin Hotel Project g for NICON/NPL. Kapital Securities borrowed monies from KMB for various transactions including acquisition of properties at 2 Gabaro h Close and 2 Cooper Road, Ikoyi repayable from rents paid by tenants every two years in advance – The lease on 2 Coo- per Road, was still being repaid from rents (future) until it was converted by CBN to a loan before closure of the bank. Also, these associated companies – Butler Nigeria Ltd, i Kapital Securities Ltd, Kapital Investment, etc, were the largest Depositors of the bank from inception to the last date. Kapital Securities Ltd still has a time deposit of over N2.5 million at time of closure of KMB. All the loans were j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 593 a duly approved by the Board of KMB, except for occasional overdrafts, as in the normal business practice of banks which may be approved by Management/chief executive accord- b ingly. All Foreign Exchange transactions and questions related thereto, were treated in the various Foreign Exchange Ex- amination Reports of the CBN and our bank’s response c thereto. I recall that KMB paid a fine of about N5.9 million in 1991 for Foreign Exchange infractions, to the CBN as well as refunded some US Dollars to the CBN and was also barred from FEM by CBN from August, 1991 to May/June, 1992, for the same offence. d Loans are granted following review of applications, management approval, and Board approval as the case may be. Management approves loans within their respective limits, e prior to ratification by Board Credit Committee or the Board. However, Management can approve and disburse loans beyond its limit prior to Board Approval if it is in the bank’s interest. Such approved and disbursed loans would later be sent to Board Credit Committee/Board for final ap- f proval. The loan limits for various levels of Management, including the managing director and chairman are also contained in the Minutes Book (Board of directors Meeting). No. 2 Cooper Road was bought from Mobil Oil Nigeria g Ltd for N47 million (net) plus consent fees, registration fees, etc. totalling about N72 million in 1990 by Kapital Securi- ties Ltd. Kapital Securities Ltd paid about N30 million (principal and interest) to KMB in 1990/91. KMB initially placed h funds with KSL from time to time. Also KSL placed funds with KMB at various times. N2.5 million overdraft facility and N8.5 million term loan to Butler were secured by a debenture creating a first charge i on the fixed and floating assets of the company as stated in the Credit Approval Memo of 14th May, 1991. The nullification of these loans by CBN/NDIC in 1991 vi- tiated earlier approvals by KMB’s Credit Committee and the j Board. Initially these were funds placed by KMB with KSL [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 594 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. from time to time. Funds placement is distinct and separate a from Loans and do not require Board approvals as in the case of Loans. Banks and other financial institutions place funds with each other for various terms and interest rates b from time to time. KSL also placed funds with KMB. The placements with KSL were later restructured into sub-leases between KMB and KSL, with respect to 2 Cooper Road, Ikoyi and 2 Gabaro Close, Victoria Island. The first accused in his testimony denied committing the offences charged c against him and defended himself count by count. Counts 1 and 4: (alleging unsecured advances to KSL) Re- lating to unsecured advances, first accused confirmed that he d was a director of Kapital Securities Ltd (“KSL”) when N12,140,502.48 was advanced to KSL by his bank (second accused) but that on 14th November, 1991 he resigned his directorship vide exhibit FB44D. He referred to page 5 of e exhibit 50(D) (tendered by first accused himself) being the Central Bank examination Report on the bank as at 30th April, 1992. At page 5 of the exhibit it was noted, inter alia, that “Dr Odogwu had by reason of his still being the chief executive of the bank relinquished his directorship in other f companies – KSL and BNL in accordance with section 19(3)(a) and (b) of BOFID, 1991”. The accused further claimed that the N12,140,500.48 advanced to KSL was duly secured thereby denying an essential ingredient of the of- g fences charged in counts 1 to 6 complaining of “unsecured” advances. He relied solely on the documentary evidence adduced by the prosecution which he said supported the fact that the advances were secured. He relied particularly on the h documents emanating from NDIC like: exhibit 28 Table 3 – the Routine Examination Report, exhibits FB13(D), 14(D) (same as exhibits FB51 A and B, respectively), FB51(D) C– E being demand letters for payment of outstanding balances i on the 5 accounts of KSL with the bank. The contents shall be examined later in this judgment. The accused stressed in evidence that the prosecution has established by those documents that security for the facilities granted to his three companies in fact existed. In evidence, the first accused j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 595 a described, without tendering any supporting document, the form the alleged security took. He confirmed as true that the said amount of N12,140,502.48 was advanced to KSL but b added that it was secured on fixed and floating assets of the company. The same defence was presented in respect of the N12,868,374.70 advanced to Butler Nigeria Ltd. He said:– “It is my defence that each advance was secured on fixed and floating assets of the company as acknowledged by the NDIC re- c port in the exhibit tendered. The documentation in respect of each facility comprised: of an application letter from KSL to the second accused, background information on KSL, audited account of KSL, offer of the credit, approval memo loan agreement, the d mortgage or debenture securing the loan or deed of Lien, or charge on any assets of the company . . . All the documentations were drawn up and executed as far as the said facility to KSL was concerned. The documents are in possession of the bank’s Legal De- partment”. e The accused therefore pleaded that he did not grant or cause to be granted unsecured loan as charged in counts 1–6 of the charge. f Count 2 and 6 (alleging unsecured advances to Butler Nig. Ltd): The complaint is same as in Count 1 but for the amount of the loan which is N12,868,374.70 and the beneficiary which is Butler Nigeria Ltd. The accused adopted the defence put up in Count 1 maintaining that the loans were g secured. The exhibits relating to Count 1 were also relied on in counts 2 and 6. The letter of demand sent by NDIC to Butler in which mention was made of the NDIC’s right to “realise the security” was also relied upon. He said it was h therefore not true that the loan was unsecured. Count 7 and 11: The first accused denied the charge of failing to ensure compliance with the provision of BOFID in that he managed the bank at a time he was a director in i Kapital Securities Limited. He said in his defence as follows:– “It is not true the bank made unsecured advances to KSL. It is true that the said amount of N12,140,502.48 was advanced to KSL but j it was secured by a floating charge on the company’s assets.” [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 596 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

“The NDIC Routine Examination Report of 31/3/91 exhibit FB28 a and table 3 thereof confirmed that the facilities to KSL were secured. The NDIC also wrote the KSL that if payment was not effected they will realise the security see exhibit FB51(A)–FB51(E). In paragraph 3 of each letter the NDIC stated that it will realise the b security covering the facility if no security existed, the NDIC would not have said it would realise it. The examiners who testified said that they did not sight the securities. They are supposed to sight the documents and indeed sighted them hence the threat to c realise the securities in default of payment”. I repeat, I plead not guilty to the charge that unsecured advances were made to KSL.” Counts 8 and 13: Regarding first accused’s management of the bank while a director of Butler Nig. Ltd (“BNL”). d The first accused adopted defence in Count 7 in respect of his concurrent management roles in the bank and Butler Nig. Ltd. He said that he took reasonable steps to ensure he resigned his directorship of Butler Nig. Ltd on 29th October, e 1991 (exhibit 45D) when he became aware of BOFID on 20th June, 1991. Counts 9 and 15: Regarding first accused’s management of the bank while a director of Kapital Investment Ltd (“KIL”). f The accused presented same defence as above but relied on the ground that he resigned vide exhibit FB 11 his directorship of Kapital Investment Ltd (KIL) on becoming aware of BOFID. The accused also said that his dual role as director g of both the bank and KSL was necessitated by the management agreement entered into in exhibit 52B by both the bank and KSL. That by the management agreement, the bank was to manage the affairs of KSL and that it enabled the first ac- h cused as chief executive of the bank to oversee the operations of both the bank and KSL. Counts 16 and 18: The first accused denied the charges of failing to keep proper books of account in respect of foreign i correspondent account. He said that in exhibit FB 46(D), the bank was commended for proper record keeping. The exhibit is the Annual Report as at 31st December, 1990 prepared for the Board of directors of the bank for submission j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 597 a to the annual general meeting of shareholders to hold on 30th April, 1991. The accused relied on the opinion expressed by the joint auditors at page 27 where the auditors b stated, inter alia, thus: We have examined the books of account as maintained by the bank. In our opinion, proper books of account have been kept in such a form as to explain and give a true and fair view of all material transactions and c the financial statements are in agreement therewith”. The quoted statement was dated 8th March, 1991 and the accused relies on it in support of his defence to counts 16 and 18 complaining of failure to keep the specified control account. d Count 19: Charges the first accused with unauthorised granting of credit facility totalling N51 million to KSL and which was in excess of the limit reserved for the accused by e the board of directors of the bank. The accused’s defence is that the sums involved constituted “placement” made in favour of KSL with the funds of the bank. He said such a transaction is a short term investment which matured at an agreed date not more that 360 days and payable with ac- f crued interest at agreed rate. He said placement did not require the Board’s approval and no security is required. That the prosecution even confirmed through the NDIC g Report exhibit 28 at pages 17 and 19 and CBN Special In- vestigation Report, exhibit FB 33, confirms at page 2 that all payments made to KSL were treated as placements. The accused said that there are no rules or regulations made governing placements. That the bank through its Treasury De- h partment invests by releasing funds to reputable companies realisable shortest time with interest. That at the end of De- cember, 1990 the KSL repaid about 10 million and by May 1991 a total of N44.4 million against KSL was restructured i into a sub-lease transaction upon the Cooper Road property. That is to say that the arrangement was reached for KSL to lease the property to KMB and the latter would sub-let the property to tenants and all rentals paid to the bank to defray j KSL indebtedness. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 598 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Counts 20 and 21: Charge the accused with failure to dis- a close his interest. He said he disclosed his interest in nine companies including KSL at the Board meeting of the bank. Refers to exhibit FB 2 at page 127 – Minutes of Board b members of 25th February, 1991. Accused said he reported the lease arrangement to the Board and it was approved at the Board Meeting of 8th March, 1991 (see page 138 of exhibit 2). The accused said that no conflict of interest arose. That by the management Agreement between the bank and c KSL exhibit 52(D) executed on 12th July, 1990 it was permissible for him to manage the affairs of both the bank and KSL. That it was lawful until BOFID forbade a director of a bank to manage any other company. d Count 22: On negotiating foreign exchange without satisfactory documentary evidence of the purpose, the accused said the negotiations which involved various transfers of funds abroad of a total $4,766,324.62 were legitimate. That e the transaction related to forward contract as defined by section 9 of Second Tier Foreign Exchange and that it allows for the purchase and sale of foreign exchange for delivery as done in this case. f That it does not involve the type of documentation required for transaction like visible transactions where certain documents like: import and export forms, letters of credit g Form A etc must be kept. The forward contract, said the accused, is an invisible trade transaction being services related and involving no movement of goods. He repeated in evidence his explanation in exhibit FB41 of 21st August, 1991 he made to the Central Bank. The accused concluded that his h explanations were acceptable hence the Deputy Governor of the bank waived the earlier penalty imposed demanding the refund of the foreign exchange and substituting instead the payment of 1% of the Naira equivalent of the Foreign Ex- i change $4,766,324 disbursed. He reiterated that the disbursements were for legitimate transaction. Count 24: Charging the accused with making or being privy to the making of false entry in the Minutes Book exhibit j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 599 a FB2 by falsely claiming to have granted loans to CEI Farms Ltd, Benue Cattle Ranch Ltd and Butler Nigeria Limited. The accused said that the loans were actually granted and b that the entry in the Minutes Book exhibit FB2 is correct and that the information was supplied by him. That he first disclosed his interest in the 3 companies at the Board Meeting of 25th February, 1991 – page 127 of exhibit FB2. Again on c 8th March, 1991 the board ratified the loan of N15 million each of CEI Farms Ltd and Benue Cattle Ranch Ltd. Count 25: Charging forgery of “Second Schedule Returns on Loans and Advances” in respect of the said three compa- d nies, the accused said that the Schedule he returned to the Central Bank exhibit FB35 was not forged. He also relies on the entries in exhibits 50(D) and FB36 which he said contain correct details of the loan transactions. e On Count 27: Alleging false entry in the book of account of the bank by purporting to show that the 3 companies were in fact granted loans. The accused denied the charge and said that the bank granted the loans as evidenced by exhibits FB2 f and FB36. He said that all loans and advances were recorded monthly in the loans and advances account book and in the ledger cards and journals. He claimed that the records were not tendered because they were in custody of the Central Bank and NDIC that took over the bank on 21st January, g 1994. The learned prosecuting Counsel Professor M.I. Jegede (with him Mr Ibukun Ajomo) submitted a written address of h 44 pages while the learned Counsel for the first accused Chief G.N. Uwechue, S.A.N. (with him Chief G.B. Nkem- nacho and Mr J.E. Ugowe) presented a 24 paged address. Both leading learned Counsel also made oral submissions summarising their written addresses. A lot of industry and i experience went into the exercise and it is right to observe that I find the submissions quite illuminating and useful. In drawing my conclusions and arriving at my findings, I shall take into account all relevant submissions made on each j count. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 600 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Counts 1, 3 and 4: The first accused is charged with having a committed an offence contrary to section 20(2)(a)(ii) of the Banks and Other Financial Institutions Decree No. 25 of 1991 (otherwise known as “BOFID”) which provides:– b (2) “A bank shall not, without the prior approval in writing of the bank (that is the Central Bank of Nigeria) – (a) Permit to be outstanding, unsecured advances, loans or unsecured credit facilities of an aggregate amount in c excess of N50,000: (i) . . . (ii) To any firm, partnership or private company in which it or any one or more of its directors is interested as a director, partner, manager or agent d . . .” The offence charged against the first accused in Count 1 is punishable under section 16(a) of the said Decree which stipulates as follows:– e “Any person, being a director or manager of a bank, who fails to:– (a) take all reasonable steps to secure compliance by the bank with requirements of this decree. (b) . . . f is guilty of an offence liable on conviction to a fine of N5,000 or to imprisonment for 5 years or to both such fine and imprisonment.” The following facts relevant to the offence in Count 1 are g not in dispute:– That during the period stated in the count namely: between June 20th, 1991 and July 31st, 1991, Kapital Merchant Bank Ltd (the second accused) was operating as an incorporated body licensed to h carry on banking business. It was incorporated on November 17th, 1988 and granted licence to carry on banking business on Decem- ber 1st, 1988. Exhibit FB3 is the certificate of incorporation while exhibit FB26 is the banking licence No. 000032 issued. The bank having “failed beyond resuscitation” had its license revoked as no- i tified in exhibit FB1 the Federal Government Official Gazette of 21st January, 1994. The Gazette contains both the Notice of Revocation of the banking licence and of the appointment of the Nigeria j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 601 a Deposit Insurance Corporation (“NDIC”) as Liquidators to the bank. Between June 20th, 1991 and July 31st, 1991 the bank granted KSL loans in excess of the permissible aggre- b gate of N50,000. The debit balance outstanding was N12,140,502.48 as at July 31st, 1991 on three (3) of the company’s accounts with the bank. The said aggregate amount outstanding is made up of:– c N797,214.40 balance or overdraft a/c 50-1122; N11,189,863.01 balance term loan a/c 30-1005; N153,425 balance loans a/c 39-5001. d The relevant ledgers are exhibits FB10, 18 and 15, respectively. The beneficiary of the loans Kapital Securities Ltd was set up by the first accused in 1981 when it was incorporated as Kapital Investment and Trust Co Ltd but changed to e Kapital Securities on 6th September, 1988. Exhibit FB 55 is the certificate of incorporation. It is a private company in which the first accused admittedly had very substantial interest. He unilaterally gave several advances to KSL and f sought no approval of the Central Bank or the board of directors of his bank (second accused). During the relevant period, the first accused was both the chief executive of the bank and the chief executive of his private company KSL. g Exhibit FB6, the particulars of directors filed with the Cor- porate Affairs Commission on 10th June, 1991 included his name “Dr O. Odogwu – managing director” of KSL. The above facts are well established but they do not consti- h tute the offence charged in Count 1 in absence of proof or clear admission that the aggregate outstanding balance of N12,140,502.48 was not secured and that the first accused failed to take reasonable step to secure compliance of the i requirements of section 20(2)(a)(ii) of the Decree – BOFID. Those were the only two areas of serious controversy between the prosecution and the defence. They call for a purview of the submissions made by the both learned leading j Counsel. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 602 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Chief Uwechue, S.A.N. submitted that the prosecution has a failed to prove that no security existed in respect of the aggregate debit balance of N12,140,502.48. That the prosecution having admitted by their Report that securities existed, b that settled the issue. He referred to all relevant documents especially the NDIC Special Report, exhibit 28, and the NDIC letters demanding payment on each account. He also submitted that the first accused resigned his position as the c director of KSL on 14th November, 1991 in compliance with the provision of BOFID. The learned prosecuting Counsel Professor Jegede submitted that there is no proof that any security existed in respect d of the three accounts with an aggregate of an outstanding debit of the N12,140,502.48. He referred to the relevant oral and documentary evidence relied upon by the defence vis-à- vis the evidence of the prosecution witnesses 1 and 2 who e said that no security existed and that no such document was sighted when they took custody of the available documents in January, 1994 after the revocation of the banking licence. Learned Counsel submitted that the onus therefore shifted f on the accused to prove that securities in fact existed as at the period relevant to the charge. He recalled that the NDIC Report stated that there were securities as at 31st March, 1991 but pointed out that the date is different from that on the period relevant to the charge which is “between 20th g June, 1991 and 31st July, 1991”. That if in fact KSL secured the loans in question the first accused ought to have produced all the legal documents he mentioned existed. He urged the Tribunal to hold that security was not given for the h repayment of the loans granted KSL and that the first accused did not take reasonable step to secure compliance. The reasonable step open to the first accused, suggested Counsel, were 3-fold, namely: have the aggregate amount outstanding i reduced to statutory limit, seek for written approval of CBN and resign as a director of KSL. Tribunal: I have taken the pains of delving into the facts and arguments proffered on the question of secured or j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 603 a unsecured advances for obvious reasons. The reason being that my findings in Count 1 will be decisive of Counts 2–6 inclusive. The allegation of granting unsecured loans to KSL b forms a common feature in each of the six counts. The said counts are premised on similar or common facts. I would have had no problem arriving at the conclusion that no security existed but for the NDIC Report exhibit 28 and demand c letters (exhibit FB A–F) which the defence relied upon heavily in purported support of their claim that securities or collateral existed. The accused tendered the letters written by NDIC demanding payment of the debit balances in the five accounts maintained by KSL with the bank. The payment d demanded related to:– Lease Account No. 39-5001 with N60,368.13 Dr. Term Loan A/C No. 30-1005 with N72,992.716 Dr. e Term Loan A/C No. 30-1073 with N3,111,018.20 Dr. Overdraft A/C No. 50-1047 with N13,968,830.55 Dr. Overdraft A/C No. 50-1122 with N1,435,925.18 Dr. f The demand letters were dated between April and May, 1994 (exhibits FB.51(D)A–F) and gave the balance due as at 30th March 1991. first accused claimed that the paragraph three of each letter couched in identical words acknowledged the fact that KSL secured the repayment of the loans g on each account. Paragraph 3 of each letter of demand warns:– “Your failure to observe the maturity obligation of the facility has already created a default which gives NDIC the right to realise the h securities covering the facility.” The defence contends that if no security was sighted or in existence, there would be no basis for that warning. The accused also relied on exhibit FB 28, the Routine Examination i report of NDIC on the bank as at March 31st, 1991. At page 42 under the heading “REMARKS” it was stated that KSL Accounts No. 50-1047 and 50-1122 were:– “secured on Plot 15A Victoria Island, Lagos valued at N10 mil- j lion.” [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 604 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The first accused and his Counsel made heavy weather of a the above two statements in the report of NDIC which they submitted constituted proof that the loans advanced to KSL were secured. Those statements to my mind raise at best the b presumption that realisable security was sighted on record and that the security was on the Victoria Island Plot. The presumptions were however rebutted (and successfully too in my view) by PWs 1 and 2. The prosecution has established through them that the demand letters were prototypes c sent to secured and unsecured loan account owners and that when NDIC took over the bank, no document securing the loans were found in the bank. I believe the witnesses that as at 21st January, 1994 when NDIC took over the bank no se- d curities were sighted. The prosecution cannot be expected to tender documents of security it did not see or possess. The fact that the documents may have been sighted by the bank examiners on 31st March. 1991 (as presumed from the Re- e marks Column in exhibit FB.28) does not necessarily mean that the same documents would be sighted or available at a later date. In this case, as at January, 1994 when the NDIC took the bank and its affairs over no securities were seen. It f is the first accused who granted the controversial loans that is in the best position to produce the securities before the Tribunal. After all, it was his evidence that all legal documents securing the loans made to KSL were duly executed and that the Victoria Island plot used as security for the loan g was sold in 1992. Under cross-examination, he said:– “I do not know if the security documents in respect of the loans have been perfected. I believe the security may have taken the form of debenture or mortgage. I sold the Victoria Island property h in 1992 and used the proceeds to pay off the secured loan. I was able to gain access to all documents I had in my cabinet in the bank when the Federal High Court ordered NDIC/CBN to allow me access to the documents.” i From the above admissions one is left in doubt that the loan to KSL was not secured. If such documents evidencing security existed why did the first accused not produce them in proof of his claim that the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 605 a loans were duly secured? The prosecutor has successfully established that the security was not among the documents found in the bank, the onus shifted to the accused to prove b the contrary. The accused was not even sure of the nature of security given and as to whether the Victoria Island Lagos property was used as security by way of equitable or legal mortgage. To my mind there was simply no security for the loans totalling N12,140,502.48 allowed to be outstanding for c the period ending 31st July, 1991. The so-called security no longer existed as from 1992 when according to the accused he sold the allegedly mortgaged land for N17 million (see page 7 of exhibit FB31A). The accused’s assertion is that he d used the proceeds to “pay off the secured loan” but there is no such proof. In any case the letters of demand tendered by the accused himself clearly showed that the bank had not since enjoyed any appreciable reduction in the heavy loans e extended to KSL. Findings: I find that the bank (second accused) permitted to be outstanding unsecured advances of an aggregate of N12,140.502.48 in favour of the private company Kapital f Securities Ltd as charged in Count 3. I also find that the first accused did not take reasonable steps to secure compliance as charged in Count 1 and that he is also deemed to have committed the offence as charged in Count 4. g Order: First accused guilty and convicted on each of Counts 1 and 4, respectively. The second accused is guilty and convicted on Count 3 of the charge. Counts 2, 5 and 6: First accused allegedly permitted to be h outstanding unsecured advances totalling N12,868,374.70 in favour of Butler Nig. Ltd. Again as in the case of the KSL, the background facts also apply to Butler Nigeria Ltd the beneficiary of the loan. It is not in dispute that it is a private company incorporated as one of the several companies i floated by the accused and sustained with funds of the bank (second accused). At page 2 of his statement to police (exhibit 31 A), the first accused stated, inter alia:– “Butler Nigeria Ltd was set up in 1982 by me Dr Odogwu acting j as managing director, the initial directors were . . . Dr Odogwu.” [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 606 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The indebtedness of Butler to the bank is not in dispute but a the accused said the loan was secured and that security is based on “recourse to leased equipment”. He also relied on the letter of demand for payment written by NDIC exhibits b FB24D and FB25D and in particular in paragraph 3 . . . about realising security if payment obligation was not met. That expression has (as in the case of KSL) been satisfactorily explained off by PW5 who said that the letter of demand c was a prototype sent to all debtors whether their loans were secured or not. The prosecution has established that during the period the advances were outstanding (as at 30th July, 1991) the first d accused was the managing director both of the bank and of the Butler Nig. Ltd, a private company formed by him. All the ingredients of the offence inclusive of failure to obtain prior approval for the loans granted to Butler have been e proved in this case. The defence claims that the loan of N12,302,189.42 to Butler was secured and again relied on Table 3, exhibit 28, the NDIC Routine Report where the examiner PW8 stated that as at 6th May, 1991 a debit balance f on acCount 50-1118 was N12,302,189.42 and “security based on recourse to the leased equipment”. There was no document tendered evidencing the existence of any security in relation to the loan granted the company. g The prosecution witnesses did not sight any security and the defendant failed to produce and tender any security. As in the case of KSL, I shall reject the defendant’s assertion as untrue that security existed. The security that may have ex- h isted as at 11th March, 1991 (date of the report) was shown not to have been sighted by the time the NDIC took over the bank. The prosecution established that no security existed as at 21st January, 1994 when they took over the bank. Before then, the whereabouts of any security or other valuable i documents was within the peculiar knowledge and official custody of the first accused. The onus rested on him to produce the security as the non-production by their side would adversely affect his defence. The prosecution has proved its j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 607 a case against both the first accused and the bank (second accused) for granting unsecured advances of N12,868,374.70 to Butler Nigeria Limited. b Findings: First accused is guilty on Count 2 and convicted accordingly second accused is guilty on Count 5 and convicted accordingly first accused is deemed guilty on Count 6 and convicted accordingly. c Tribunal: Counts 7–15 inclusive fall into three main categories as follows:– Counts 7, 10 and 11 are related offences in that they are based on d the MANAGEMENT OF KAPITAL MERCHANT BANK by the accused at the time he was a director of KAPITAL SECURITIES LTD. Counts 8, 12 and 13 are related in that they are based on the MAN- AGEMENT OF KAPITAL MERCHANT BANK by the first ac- e cused at the time he was a director of BUTLER NIGERIA LIM- ITED. Counts 9, 14 and 15 are related in that they are based on the MAN- AGEMENT OF KAPITAL MERCHANT BANK by the first ac- f cused at the time he was a director of KAPITAL INVESTMENTS LTD. I shall consider the counts as grouped above for convenience. Counts 7, 10 and 11: In support of Counts 7, 10 and 11, the g prosecution and the defence agreed on the following facts as adduced in evidence:– (a) During the period relevant to the charges namely between June 20th, 1991 and July 31st, 1991, the first accused who h was the managing director of the bank Kapital Merchant Bank Ltd was a director of Kapital Securities Ltd which was not a subsidiary of the bank. (b) The first accused resigned his position as a director of Kapi- i tal Securities Ltd (KSL) by his letter dated 14/11/91 exhibited to the Returns on particulars of directors of KSL exhibit FB 44D filed on 11/12/91. (c) The bank was licenced to carry on banking business on 1/12/88 and was in that business until 21/1/94 when the li- j cence was revoked. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 608 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(d) Kapital Securities Ltd (formerly Kapital Investment and a Trust Company Ltd) was incorporated 17/7/81, the first accused formed the company and he was one of the directors right from its formation until 14/11/91 when he said he resigned. The accused said that he had to resign as director of b KSL because of the provisions contained in section 19 of Banks and Other Financial Institutions Decree, 1991 (‘BOFID’) and thereby enable the bank comply with the provisions. The section of relevance is subsection (3)(a) c which provides:– “No bank shall be managed by a person who is a director of any other company not being a subsidiary of the bank.” d The undisputed facts of the case on both the side of the accused and of the defence, support the prosecution’s case on each of the 7th, 10th and 11th counts. The defence of the first accused however is that he took e reasonable steps to ensure compliance with the section 19 by resigning his position as director. The learned Senior Advo- cate defending submitted that it was upon becoming aware of the prohibition created under section 19 of the Decree that f he promptly resigned. The learned prosecuting Counsel pointed out that the first accused’s retirement is on paper only – Exhibit FB52D. The tribunal recalls that the first accused in his evidence g and statement to police said that the bank had been managing the affairs of KSL. The first accused tendered the Man- agement Agreement exhibit 52D. He said he could not extricate himself from managing the affairs of KSL by reason of h his being the chief executive of KMB which manages the company. The Tribunal also noted from exhibit FB6 the returns of directors of KSL that the names of first accused still remain on the list of directors as at 1st January, 1993. His purported resignation on 14th November, 1991 appears i doubtful and as the learned prosecuting Counsel put it, “on paper only”. Even if he resigned on 1st November, 1993, the accused would nevertheless have committed the act charged under BOFID which came into effect earlier in time viz, 20th j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 609 a June, 1991 . . . the effective date of the Decree. Rather than take steps to ensure that the bank committed no infractions of the provisions of section 19, the accused to my mind en- b couraged illicit relationship between the bank and his private companies by actively and unilaterally granting illegal huge unsecured loans. He even attempted an artificial “merger” between the bank and his company (“KSL”) by forcing a c management contract between them to enhance an easy ac- cessibility of the bank’s funds to the coffers of KSL. The accused played the dual positions as charged. There is no ground upon which to take the first accused seriously when he said he took all reasonable steps to ensure the compliance d of section 19 of BOFID by the bank. The contrary is fully established. Each of the offences in Counts 7, 10 and 11 is proved beyond reasonable doubt. e Findings: First accused guilty on Count 7 and convicted; Second accused guilty on Count 10 and convicted; First accused guilty on Count 11 and convicted. f Counts 8, 12 and 13:– The 3 counts relate to the questioned role of the first accused in managing the Kapital Merchant Bank Ltd while g also director of Butler Nigeria Ltd. The following facts have been established in evidence and form common ground among the parties: The second accused was a licenced bank over the period in h question (20th June, 1991 – July 1991). The first accused was a director of the bank (second accused) over the period. Kapital Securities Ltd (“KSL”) was a private company and not a subsidiary of the bank (second accused). The first ac- i cused was during the period the managing director of the bank while he was also a director of his company, Butler Nigeria Ltd. The above facts form common grounds between the prose- j cution and the defence, the facts support the offences in [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 610 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Counts 8, 12 and 13. But here again, the first accused a claimed that he took all reasonable steps to secure compliance with the section. The way out according to him was to resign as a director of Butler which he said he did on 29th b October, 1991 vide exhibit FB45(D). It is noted as in the case of KSL that the date relevant to the charges is 20th June, 1991 to 31st July, 1991 when the first accused actively accepted the dual positions charged. There is no acceptable c defence by the accused in the counts. This recurring defence of having resigned as a director of his private companies shall as in the case of KSL and for reasons already given, be rejected. The first accused has not d satisfied me that he took reasonable step to ensure the compliance with section 19 of the Decree. The charge in counts 8, 12 and 13 are proved and conviction to follow. Findings: e The first accused is guilty on Count 8 and convicted. The second accused is guilty on Count 12 and convicted. f The first accused is guilty on Count 13 and convicted. On Counts 9, 14 and 15: The group of 3 counts relate to the management of the bank by the accused while a director of Kapital Investments g Ltd. The same facts as established in respect of the other two companies (supra) are similarly established here. The prosecution and the defence are agreed that: That while the first accused was managing the second accused (Kapital Mer- h chant Bank Ltd) he was also a director of his company, Kapital Investments Co Ltd. The Company (“KIL”) was incorporated on 14th December, 1988 with the first accused as one of the directors of the company until 30th October, 1991 i when he resigned. The resignation date 30th October, 1991 was months after the commencement date of BOFID on 20th June, 1991 after the offence charged had been committed. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 611 a I find that the period he was a director of his company fell within the period he was managing the bank particularly during the period charged 20th June, 1991 and 31st July, b 1991. He has no defence to the counts against him as I am satisfied that he took no reasonable step to ensure the compliance of the bank with section 19 of the Decree. For these and other reasons given in the case of other related charges, c I find the counts here also proved. Findings: First accused guilty on Count 9 and convicted. d Second accused guilty on Count 14 and convicted. First accused guilty on Count 15 and convicted. Tribunal: e Counts 16, 17 and 18 are related offences in that they are based on failure to keep proper books of account in respect of foreign correspondent transactions. I shall consider them together as the same set of facts were adduced in support of the offences. In Count 16, the accused is charged to have f failed to take reasonable step in ensuring that the bank kept proper books of account during the period May 8th, 1991 and May 13th, 1991. In Count 17, the bank is charged with failure to keep proper books of account by not possessing g control account for its foreign correspondent account. In Count 18, the first accused is deemed to have committed the offence charged against the bank. The section of the Act allegedly contravened is section 16(1) of Banking Act, 1969. h PW 6 whose evidence I had already stated in this judgment said in evidence that:– “the keeping of the control account was obligatory in that a control account contains the summary of all other accounts, it keeps i cheques and balances of other accounts, it is from the control account that you can pick the accuracy of the other accounts.” The witness said that the keeping of control account is a generally accepted banking practice and compulsory. He j said there was no such account kept by the second accused. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 612 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The first accused did not deny the fact that accounts book a designated as Control Account was not in existence. It was submitted by the prosecuting Counsel that the accused did not deny or challenge that piece of evidence given that the b first accused failed to take reasonable steps to ensure that the account was kept. The first accused said that the bank was commended for keeping good records of account. He relied on the comments made by the joint Auditors of the bank c who prepared in March, 1990 the report for submission at the Annual Shareholders meeting. The one-paged Report (Exhibit 46D) had its peculiar purpose to serve – for submission at shareholders’ meeting only. It did not fall within the categories of detailed examination report on specific areas. d For example, PW6 specifically examined and issued his detailed findings in exhibit FB.28 in the record of foreign exchange transaction. The comments in exhibit FB.46(D) by the Auditors of the e bank was too sweeping and not tied to any given book of account such as the Control Account kept for the Foreign Cor- respondent Account. The remark made at page 47 of exhibit 46D that the second defendant kept proper books of account f is too general and insufficient to whittle down or diminish the relevance and effect of the positive findings made by the official examiner PW6. I believe PW6 where he said that keeping a central Control Account is a compulsory require- g ment of acceptable banking practice. Any correspondent account without control account is lacking in authenticity of entries and postings. I am satisfied that the bank failed to keep the control account which I believe is an essential book h of account as explained by PW6. The first accused is deemed to have committed the offence being its director at the time of default in May, 1991. Findings: i 1. On Count 16 the first accused is guilty and convicted. 2. On Count 17 the second accused is guilty and convicted. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 613 a 3. On Count 18 the first accused is guilty and convicted. Count 19: b In this count, the first accused was charged with granting Kapital Securities Ltd credit facilities totalling N51 million in excess of the limit reserved for him by the board of direc- c tors an offence punishable under section 12(2) of the Bank- ing Act, 1969. As rightly submitted by Chief Uwechue, S.A.N. on behalf of the first accused, for the charge to succeed, the prosecu- d tion must prove that the first accused granted credit facilities to KSL and that the facilities were not approved by the board of directors of the second accused (the bank). Learned prosecuting Counsel, Prof. Jegede on his part, submitted that e the ingredients of the offence have been duly proved by the prosecution in that it was shown that the second accused was a licensed bank during the relevant period viz, 19th Decem- ber, 1990 – 2 April 1990. That the first accused was an offi- f cial of the bank over the said period in his capacity as the chairman/chief executive of the bank. That the total sum of N51 million was granted to KSL over the relevant periods. He relied on the various reports tendered as exhibits FB.28, g 33, 36 and 48D. He submitted that the disbursement of the N51 million was tantamount to granting credit facilities. He recalled that the accused regarded the grant of the N5 million to KSL as placement requiring no approval of the Board h or the Central Bank. That at the time the facility was granted, management which included the chief executive had a credit limit as shown in exhibit FB2 – The Minutes Book of the Board of 12th October, 1989. The entry for 12th i October, 1989 contains the following credit limit:– Board Credit Committee:– (a) Ratify credit facility up to N5 million approved by j Management. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 614 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(b) Approve credit facility of N5 million to N10 million a and thereafter recommend such approval to the Board for ratification. (c) Recommend to the Board for its approval Credit fa- b cilities in excess of N10 million. The first accused in his capacity as the chief executive of the bank is the chairman of the Credit Committee. His credit limit was N5 million naira subject to ratification. These c credit limits were only reviewed upward at the board meeting of 8 January, 1991 – See page 136 of the exhibit. Learned Counsel observed that the first accused approved the disbursement to KSL at the time the Credit limit was N5 d million. He said that even then, the approval was subject to the ratification of the Board Credit Committee. The accused thereby exceeded the Credit limit reserved for him by the Board when he granted the advances to KSL. e The learned defence Counsel, on his part, submitted that the disbursements to KSL were investments in form of “placement” as contained in exhibit FB 48 at page 3. The Auditor’s Report stated how the N51 million was arrived at, f the date and the purpose. They found the 51 million was by way of “placement” as follows:– (a) 12/02/90 Placement N5,200,000.00 (b) 26/03/90 Placement N25,400,000.00 g (c) 02/04/90 Placement N20,400,000.00 N51,000,000.00 He also relied on the evidence of PW5, Mr Ajumobi when h he said a placement is an investment and that of Mr Ayoku- Babatunde, PW8 who testified that the accused placed the money with KSL for the purchase of No. 2 Cooper Road and that the total placement came to N72,891,941. The learned Counsel also relied on the evidence of the accused in sup- i port of the nature of the transaction when the accused said that it was a placement and not loan. He drew attention to the fact that in exhibit FB.31 – The accused’s statement to the police, he said that KSL borrowed money from KMB for j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 615 a various transactions including the acquisition of properties of 2 Gabaro Close, and 2 Cooper Road, Ikoyi, Lagos. He recalled that the accused had also stated that initial placement b of the said amount was later converted by CBN to a loan before closure of the bank. He also recalled that the accused said “funds placement” is distinct and separate from loan and does not require Board approval as in the case of loan. c In conclusion on the count, the learned Counsel urged upon the Tribunal that the question of granting the N51 million credit facility without board approval does not arise in this case. In his reply, the learned Counsel prosecuting submitted that credit to the tune of the N51 million was extended to d KSL and that the meaning of “credit” is incurring liability to pay or repay money. That insofar as the N51 million granted to KSL by the first e accused was repayable, it was a credit facility irrespective of whether it was categorised as a placement or a loan or an advance. Evidence of PW8 was also relied upon when he said that there is a meeting point between placement and f lending, that is, extending of credit because in each case, the bank parts with its money. He said that the grant of credit facility of N51 million was not authorised by the Board and was in excess of the limit reserved for the first accused. g Tribunal: I find as undisputed fact that the first accused disbursed Kapital Securities Ltd a total of N51 million during the period stated in the charge namely: 19th February, 1990 and h 2nd April, 1990. The disbursement was in three instalments of N5,200,000 on 12 February, 1990, N25,400,000 on 26th March, 1990 and N20,400,000 on 2nd April, 1990. Exhibit 48 is a report by the Auditors of the bank commis- i sioned by the Board to investigate allegations of impropriety made against the first accused by B.O. Mgbeze. In the report, it was disclosed that additional sums were added to the said N51 million towards the purchase of the property of No. j 2 Cooper Road, Ikoyi, Lagos. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 616 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The main defence against the charge as presented by the a accused is that the disbursement of the said amount by him to KSL was a “Placement” and not a loan or credit facility that required the board’s approval or ratification. He said it b was a short-term investment of not more than 365 days but later converted to loan by the CBN in 1994. It is well established by PWs that the disbursement was tantamount to granting an advance or credit facility or loan to KSL and re- c payable with interest. My attention was not drawn to any banking law that defines the word “placement” in order to ascertain its meaning therefore I had to resort to legal definition of the word or expression “placement”. It is defined in Black’s Law Dictionary (6ed) page 1149 thus: “placement”: d The act of selling a new issue of securities or arranging a “loan or mortgage”. Of relevance to this charge is the portion of the definition as italicised by me which mentions a loan or mortgage. Since the definition of placement includes e the act of arranging a loan or mortgage, one is left in no doubt that placement creates the relationship of creditor and debtor. I would therefore agree with the explanation made by PW8 in his evidence to the effect that:– f “However there is a meeting point between placement and lending i.e. extension of credit because the bank parts with its money. The monetary credit policy defines credit to include loans, advances, overdrafts, bankers acceptances, commercial papers, shipment on g lease and not inter bank.” The witness has explained it all. “Placement” otherwise known as short term investment insofar as it involves parting with funds recoverable with interest as in this case must be h approved as required by law and the bank’s regulations and also secured if the amount to be disbursed is beyond the statutory limit or beyond the limit imposed by the board of directors. No approval of the board would be necessary for placement where the amount to be placed is within the statu- i tory limit and the limit of the disbursing banker. The limit was N5 million subject to the board’s ratification in the case of the first accused. Placement undoubtedly is akin to a loan and the rule governing loans, advances and credit facilities j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 617 a should equally apply to “placement”. I reject the misleading impression given by the accused that the disbursement of the N51 million was an investment and not a loan that requires b approval. I find it absolutely preposterous and untenable for anyone to argue in favour of the director parting with the funds of the bank beyond its credit limit and without the necessary approval. If placement as defined by the accused c were correct then nothing stops the bank or its Managing director without the usual approvals from embarking upon a vicious war of dissipation of even the entire funds of the bank in the name of placement. Placement insofar as it involves parting with funds in the bank cannot be regarded d any less than credit facility. The N51 million that the first accused unilaterally disbursed to his company KSL to buy the Ikoyi property is unquestionably a credit facility extended to the company by the first accused in excess of the e limit imposed by the board of directors of the bank. Count 19 is proved beyond reasonable doubt. Findings: f First accused is found guilty and convicted on Count 19 as charged. Count 20: g Accused charged for failing to disclose his interest as soon as was practicable to the board of directors of the bank that he was interested in the credit facilities granted Kapital Se- curities Ltd for the purchase of No. 2 Cooper Road, Ikoyi, Lagos. The fact relied upon by both the prosecution and de- h fence have been stated herein. The matters that stand out are:– The period relevant to this count is between February and April, 1990. The first accused was admittedly the chairman/chief executive of the bank during the period. His pri- i vate company Kapital Securities Ltd (KSL) was granted credit facilities of N51 million to purchase the No. 2 Cooper Road, Ikoyi. This amount as already shown in evidence was what the accused claimed to be placement and not a loan j which this Tribunal has rejected. The bank also paid cost of [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 618 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. registration, consent fee, agency fee and stamp duty which a brought the total exposure to a much higher amount. The complaint against the first accused on this Count is that he did not disclose his interest in KSL during the period b – February to April, 1990. The defence is that he declared his interest to the board on 25th February, 1991. The learned defence Counsel urged that his explanation be accepted as satisfying the requirement of the Decree, it be c held “first accused disclosed his interest as soon as it was practicable”. There is no need being repetitious on the facts, suffice it to conclude that the accused failed to disclose his interest in the loan transaction in favour of his company d KSL. The loan was granted in three instalments as aforesaid on 12th February, 1990, 16th March, 1990 and 2nd April, 1990 exhibit FB48D. After that period series of board meetings were held but first accused failed to disclose the interest e to the board. Between the date of the last instalment, 2 April, 1990 and the 25th February, 1991, it is shown in exhibit FB 2 the Minutes Book that the board met on the following seven f consecutive dates, 19th April, 1990, 21st June, 1990, 27th July, 1990, 25th October, 1990, 6th December, 1990, 31st January, 1991 and 8th February, 1991. The first accused chaired each Board Meeting and was also the chairman of g the Board’s Credit Committee and yet kept sealed lips about his interest in KSL and the colossal advances he made to it. I find as a fact that he failed to disclose his interest as required by section 11(1) of Banking Act, 1969. h The disclosure made on the 25th February, 1991 was not initiated by the first accused. It was prompted by the board members who after receiving a serious petition by a co- director, Mgbeze accusing the accused of serious offences in i operating the bank. The disclosure made no reference to the transaction leading to the heavy disbursements to KSL and made no mention of the sum disbursed. The so-called disclosure of interest was ill motivated and belated and therefore it is rejected. I reject the submission that the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 619 a accused disclosed his interest as soon as practicable, the transaction leading to the purchase of the Ikoyi property lacked the necessary disclosure of interest by the accused. b The charge is proved. Findings: The first accused found guilty on Count 20 and convicted accordingly. c Count 21: The first accused is charged with failing to declare his interest at a meeting of the board of directors of the bank de- d spite the fact that his office as managing director of KSL might create a conflict with his status as chief executive of KMB. Section 11(4) of the Banking Act, 1969 provides that:– e “Every director of a licenced bank, who holds any office or pos- sesses any property whereby, whether directly or indirectly, duties or interest might be created in conflict with his duties or interests as director, shall declare at a meeting of the directors of the licenced bank the fact and the nature, character and extent of the f conflict.” The accused was a managing director of both the bank and KSL during the period relevant to the count – February – April, 1990. Learned prosecuting Counsel submitted that g conflict might have been created as a result of the first accused holding the position of the chief executive of the second accused and the managing director of KSL. Learned Counsel submitted that the accused ought to have declared h his interest to the Board of directors of the bank. Learned Defence Counsel, in his reply, said that the accused declared his interest at the Board meeting of 18th March, 1991 – see exhibit FB2. The accused explained in i evidence that he could not have had conflict of interest in managing both the bank and KSL in view of the management agreement subsisting between the bank and KSL, but rather they have common interest and no area of conflict. j The first accused presented a conflicting defence in that on [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 620 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. one hand he claimed to have declared his interest and on the a other, he claimed that it was unnecessary in view of his position under the management agreement which establishes common interest between the bank and KSL. b I find it established that during the relevant period the first accused did not declare his interest as charged. I do not appreciate any ground upon which the charge could be denied. The issue of entry into management relationship does not c even arise in this case. The management agreement came into being after the date of the offence. The alliance between the bank and the first accused’s companies was most untidy. It has caused the bank untold financial hardship and landed d the first accused and the bank in the deep waters they now find themselves. The first accused ought to have disclosed to the Board of directors that he was the managing director of his private company KSL that was being heavily patronised e by the bank. In the circumstances, non-disclosure offends against the Act as charged. Findings: First accused found guilty on Count 21 and convicted ac- f cordingly. Count 22: The first accused is charged with having negotiated foreign g exchange to the value of US dollars $4,766,324.62 without satisfactory documentation. The offence is contrary to section 10(2) of the Second Tier Foreign Exchange Market De- cree No. 23 of 1986 which stipulates that:– h “. . . no application for foreign exchange in the market shall be processed or in any way attended to unless such application is accompanied by satisfactory documentary evidence of a valid, due or outstanding obligation in respect of a commercial or service transaction or of a capital transaction of the nature referred to in section i 14(4) or 15 of the Act.” The first accused is said to have negotiated foreign exchange to the total value of the stated sum in dollars in contravention of the requirement of that section. The evidence of PW9 j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 621 a and the routine examination Report, exhibit 40, have already been referred to in this judgment and taken into account here, so also exhibit FB48D, FB2 and FB33. Of importance b is the Appendix 2 of exhibit 33 containing the list of 94 transactions involving foreign exchange which came to the total amount involved in the offence. It is not in dispute that there was no documentary evidence backing the listed trans- c actions and that the second accused (bank) was even PE- NALISED BY THE CENTRAL BANK OF NIGERIA for irregularly disbursing the said amount without proper documentation. Only six out of a listed 94 transactions were subsequently backed with documents which were submitted by d the accused to the examiner (PW9) after his examination. It is established in evidence by the prosecution that the first accused is solely in charge of approving the applicants to be allocated foreign exchange and that if it had to do with the e sourcing and purchase of foreign exchange from autonomous market he handled it alone. The first accused admitted there were incomplete documentations which he promised PW9 he would rectify. To remit as much as $4,766,324.62 f without approval of the Central Bank and without documentation as to the purposes of the disbursement offends against section 8(1) of the Exchange Control Act and section 10(2) of the Second Tier Foreign Exchange Market Act under g which the first accused is charged. His defence appears to be that since he did not source the dollars directly from the Central Bank but from the autonomous market, there was no need for the statutory documentation. As the witness PW9 h rightly told the accused, foreign exchange transaction must be adequately supported by appropriate documentation whether the foreign exchange is derived directly from the Central Bank or purchased from the autonomous market. i The first accused also alleges that the amount involved forward contract transaction, and that what he did was simply to purchase and sell foreign exchange currency. That the methods of disbursement of foreign exchange under j this contract are by cash, bank draft, travellers cheques, [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 622 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. telegraphic transfer. This defence is irrelevant to the charge a since he did not suggest that in such transaction documentation is not required. The foreign exchange transaction required proper documentation which the first accused did not b ensure existed. That is the subject matter of the charge which the prosecution has proved beyond reasonable doubt. The first accused is liable to conviction. Findings: c First accused found guilty and convicted on Count 22 as charged. Count 23: d The first accused is charged with stealing the sum of £392,008 (pounds sterling) belonging to the Kapital Mer- chant Bank Ltd. He admittedly transferred the foreign exchange to the credit of Azie Ltd abroad without paying the e naira equivalent. The undisputed facts reveal that on the 4th of August, 1989 the said amount belonging to the bank was transferred to the credit of Azie Ltd without payment of the naira equivalent until 10th April 1991 when the naira f equivalent was paid. Detailed reports are found in exhibit FB.33, accused’s reply exhibit FB.36 and Auditor’s Report exhibit FB.48 D. It has also been established that as at Au- gust, 1989, the first accused was the sole operator and signatory to the foreign bank accounts of the KMB and he alone g was responsible for disbursing all foreign exchange. The learned prosecuting Counsel submitted that the amount transferred abroad to Azie Ltd was converted by the first accused to the use of Azie Ltd a private company belonging to h the first accused and his family. He also submitted that the first accused did so with fraudulent intent. He gave the circumstance surrounding the remittance. The first accused received a letter dated 12th July, i 1989 exhibit 58 asking for the sum of £391,046.75 Pounds Sterling for the purchase of house in London for Azie Ltd Azie Ltd is a trust company belonging to the first accused family and the accused is a consultant to the company. In j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 623 a exhibit 60, a memo dated 7th July, 1989 from the accused to his assistant general manager of the bank, the accused stated, inter alia, that the foreign exchange would be replenished b after the transfer has been effected. The memo evidently confirmed the transfer without first paying its naira equivalent. However the accused in the end attested to the fact that the property in London belonged to his family. The prose- c cuting Counsel, submitted that this is a clear case of stealing as defined by section 383(2)(f ) of the Criminal Code:– “A person who takes or converts anything capable of being stolen does so fraudulently if he does so with any of the following in- tents:– d (f ) In the case of money an intention to use it at the will of the person who takes it or converts it, although he may intend afterwards to repay the amount to the owner.” In reply the learned Senior Advocate Chief Uwechue sub- e mitted that there is no proof of fraudulent intent on the part of the first accused to steal the money and that what happened was a sale of foreign exchange at the instance of the customers of the bank – KSL. He referred to the evidence of f the accused on this issue when he said that a customer of KMB ordered a transfer of the said amount to Azie Ltd overseas. The money was transferred and the equivalent was N5,995,527.16. The account of KSL was debited on or about g 10th April, 1990. The defence also relied on the report of PW8, Mr Ayoku Babatunde when he said:– “Our investigation revealed that on 4th August, 1989 the sum of 392,008 Pounds Sterling was sold to Azie Ltd We also established h that there was no payment of the Naira equivalent until 10th April, 1991 when Kapital Securities Ltd (KSL) account was debited for the transaction with the sum of N5,995,527.16 at the exchange rate of N15.2944 to the pound. In effect, the bank extended credit facility to KSL from 4th August, 1989 to 10th April 1991. The bank i therefore should compute interest at the applicable lending rate for this period and recover same from KSL.” The defence contends that the foreign exchange transaction had to do with creditor and debtor relationship and there was j no criminal intent involved. That the CBN regarded the [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 624 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. transaction as one between debtors and creditors. I am not a bound by the opinion expressed by the examiner tending to suggest that the bank sold the 392.008 Pounds Sterling to Azie Ltd. It is the duty of this Tribunal to examine or assess b the facts and determine whether a given set of facts constitute a criminal offence. What happened in respect of the Pounds Sterling is that the accused simply dipped his hand into the funds of the bank, transferred it abroad to the use of c his family company Azie Ltd without paying the naira equivalent. The accused confirmed that Azie Limited is his family company and that the amount in question was transferred to the company to purchase property in London. The d property is known as 6 Priory Terrace, London NW6. The circumstances of the transfer leave me in no doubt that the accused converted the pound sterling to the use of his family company. The conversion to my mind is fraudulent in that the accused intended without reference to the Board of di- e rectors of the bank or leave of the Central Bank, to use the money at his will, as he did.

Azie Limited is not shown to have applied for the purchase f or transfer of the foreign exchange nor did Kapital Securities Ltd (“KSL”) that was subsequently debited with the Naira equivalent shown to have applied for or requested for its transfer at any time relevant to the actual transfer of the for- g eign exchange abroad. The first accused is deemed in law, and indeed proved, to have fraudulently converted the said amount. The action of the first accused is caught by the provision of section 383(2)(f ) of the Criminal Code which pro- h vides, inter alia, that a person who converts money with intent to use it at his will is deemed to have done so fraudulently “although he may intend afterwards to repay the amount to the owner”. That was exactly what the accused did. The fraud perpetrated by the first accused in connection i with the pounds sterling transfer is manifested in his explanatory memo dated 7th September, 1989 to his Deputy exhibit FB60 in which he indicated that the Naira equivalent could be paid after the transfer of the foreign exchange had j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 625 a been effected. The non-payment of the naira equivalent on or before the date of transfer (4th August, 1989) was therefore a deliberate act. Withholding payment of the Naira b equivalent of the foreign exchange demonstrated his fraudulent intent at the time of the disbursement. The accused’s further claim that Mgbeze failed to make the necessary reconciliation of accounts by debiting KSL is unacceptable and c constitute no defence as the conversion was a deliberate act of which KSL was made a party. This is a clear case of stealing as defined by section 383(1) of the Criminal Code Act. The act of the accused is tantamount to stealing the foreign exchange in question by the non-payment of the naira d equivalent prior to or as at the time of the transfer. The charge of stealing the 392.008 pounds sterling is proved beyond reasonable doubt. e Findings: The accused is guilty of stealing and is hereby convicted as charged in Count 23. Count 24: f Alleging forgery of the entries in the Minutes Book of directors by purporting to show that the accused’s named three companies were granted loans whereas they were not. The g companies are Butler Nig. Ltd, C.E.I. Farms Ltd and Benue Cattle Ranch Ltd. The prosecution’s case on this count has already been shown in the general analysis of the facts. Ac- cording to the prosecution the accused gave false information at the Board meeting to the effect that the said 3 com- h panies were granted loans requiring either ratification or approval which the Board granted. The minutes of the meeting were recorded by DW1 while the adopted minutes were signed by the first accused. The learned defence Counsel i submitted in support of the denial of the charge by the accused that:– “The Minutes Book is a record of proceedings at a duly convened Board meeting. A false entry into the Minutes Book would arise j when an entry is made which did not represent the proceedings or [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 626 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

resolutions passed at a Board meeting. It is not suggested by the a prosecution that the decision relating to loans to Benue Cattle Ranch, C.E.I. Farms Ltd or Butler Nigeria Ltd were not taken at the meeting held between February, and July, 1991.” b The entries in the minutes book exhibit FB2 which allegedly constituted false entry with intent to defraud are summarised below from the relevant pages of the minutes book. The management of the bank recommended credit facility of c N10 million for Butler Nig. Ltd which the Credit Committee on loans at its meeting of 5th March, 1991 approved subject to ratification by the board of directors of the bank. The Credit Committee also recommended N15 million loan for d Benue Cattle Ranch Ltd and N10 million loan for C.E.I. Farms for the approval of the board of directors. The Board met on 8th March, 1991, considered the Committee’s report on the said three loans and ratified the loan granted by the Committee to Butler Nig. Ltd and approved the loans rec- e ommended for the other said two companies. The above facts which are recorded in the Minutes Book at pages 132–144 do not seem to support the allegation that the f first accused made “false entry in the minutes book: by purporting to show that the three companies “had each been granted” as charged. Reason being that the Committee in its report disclosed that it had granted loan only to Butler sub- g ject to the Board’s ratification. In the case of the remaining two companies, the committee recommended that they be granted loans. The minutes clearly show that on 8th March, 1991, it was the Board itself that granted loans to Benue h Cattle Ranch and C.E.I. Farms Ltd on the recommendation of the Committee headed by the first accused. It follows that the Committee did not represent to the Board that each of the three companies had been granted loan. It was only the loan to Butler that the Committee granted and not those in i respect of C.E.I. or Benue Cattle Ranch. My consideration of the alleged false entry of the loan shall therefore be limited to the loan affecting Butler Nig. Ltd. There was no entry to the effect that either the first accused or the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 627 a Credit Committee granted loans to the other two companies mentioned in the count. The loan granted to Butler by the first accused as the b chairman of the Credit Committee was ratified on 8th March 1991 as recorded in the Minutes Book and was shown in evidence to have been backed up by management credit approval memo exhibit FB.55D. The learned defence Counsel c submitted that the document supports a genuine and not fictitious loan. The loan to Butler ratified in March 1991 does not seem to be fictitious. The four-page Credit Approval memo prepared d by management and dated 24th September, 1990 recommended N10 million term loan for Butler Nig. Ltd. The first accused endorsed his approval on the memo. The Credit Committee at its meeting of 5th March 1991 approved the e loan. The Board of directors ratified the loan on 8th March 1991. The entry in the minutes book that a loan was granted Butler Nig. Ltd is a statement of fact as evidenced by the approval made and by debiting the account of Butler. I think f that the prosecution has presented a very weak and remote case of making false entry against the accused in Count 24. The bank documents raised in proof of the alleged fictitious loans should appropriately be the subject of the false entry. They are the internal memo exhibit FB 34, debit notes ex- g hibits FB 57A to 57C which the accused caused to be raised with intent to reduce the excessive indebtedness of KSL. In- cidentally, those documents were relied upon in support of Count 27 charging the same offence of false entry (in the h books of account) punishable under the same section. A much better approach has been adopted in Count 27 by using the entries in the books of account as the basis for the false entry. The correct and true deliberations and the Com- i mittee report contained in the Minutes Book cannot in my view constitute an offence as false entry as charged in this Count 24. Even if the entry in the minutes book was false the intent j must be proved to be fraudulent to sustain the charge. The [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 628 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. loans allegedly made were tabled at the Board Meeting with a the sole intention of securing the approval and/or ratification of the Board. It was with intent to receive the blessing of the Board that the loans committee presented the issue of the b loans before the Board on 8th March, 1991. As at that date, the loans whether hitherto made irregularly or not, became authorised, lawful and recoverable. The same goes for the other loans received and shown in the minutes book as ap- c proved by the board on 8th March, 1991. Suffice it to conclude that the count on false entry in the minutes book has not been proved beyond reasonable doubt. I am prepared to discharge the accused on the count. d Findings: Accused found not guilty on Count 24 and he is accordingly discharged and acquitted. e Count 25: The first accused is alleged to have forged a Second Schedule Returns on loans and advances submitted to the f CBN by reporting placements totalling N40 million as Manufacturing, Agricultural and Real Estate loans to the aforesaid three companies. To prove the charge, exhibit FB. 35 Loans Analysis returns (for the months January to June, 1991) was tendered. I cannot appreciate on what ground and g to what extent the analysis in the report could be said to constitute false entry. The report for each month was submitted in compliance with the requirement of section 19(2) of the Banking Decree, 1969 (Cap 28, Laws of the Federation of h Nigeria, 1990). It requires that every licenced bank shall submit monthly, to the Central Bank, an analysis of advances and other assets of the bank. The printed Forms used for each return is headed REPORTS ON LOANS AND i ADVANCES. Exhibit FB 35 analysed several advances made for six consecutive months to sectors including Agricultural, Manufacturing, Real Estate/Construction. Under the former, the sum of N15 million was stated as j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 629 a granted but the beneficiary of the loan was not stated. Under Manufacturing sector, the loan of N10 million was reported as well as series of other loans and advances but no benefi- b ciaries stated. Since the beneficiaries of the loans and advances were not stated in the Report, it is not possible for the Tribunal to ascertain which of the numerous figures stated in the Returns related to the controversial loans made to CEI c Farms Ltd, Benue Cattle Ranch Ltd, and Butler Nigeria Ltd. There is no column for “placement” in the forms used to support the aspect of the charge that the accused reported “placements” to the Central Bank. d The learned prosecuting Counsel attempted in his closing submissions to identify the beneficiaries of the loans by saying for instance that the N15 million stated under Agricul- tural sector referred to the loan allegedly granted on 27th e September, 1990 to Benue Cattle Ranch Ltd. There was no such indication in the returns. Similarly, learned Counsel submitted that N10 million loan shown under Real Estate was in relation to the loan granted on 27th September, 1990 f to Butler Nig. Ltd Nowhere was the borrower mentioned in the return exhibit FB. 35. I cannot therefore speculate as to whether or not the falsity of the Returns related to the three loans totalling N40 million made to the said three companies g without the names of the companies being stated against the relevant sum stated in the returns. The loans made to the three companies effective from 8th March, 1991 when the Board approved them were not false or fictitious loans. If the loans are reflected in the returns then no false returns would h have taken place. Consequently, there is no basis upon which to sustain the charge in Count 25 that the returns related to the loans granted to the three companies were false. The case of forgery as charged based upon the entries in ex- i hibit FB35 (the returns to the Central Bank) cannot be sustained. No aspect of the returns is expressly traceable to the first accused. The return which was prepared by Mr Soetan does not establish the charge on Count 25 against the first j accused. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 630 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Findings: a The accused is found not guilty on Count 25 and he is hereby discharged and acquitted. b Count 26: The prosecution withdrew this charge of stealing in the course of hearing. Order: c Accused discharged on the Count 26. Count 27: Again under this count the accused is alleged to have made d or been privy to the making of a false entry in the books of account belonging to the Merchant Bank by purporting to show that the said three companies were granted loans. The prosecution contended that the accused made entry of ficti- e tious loans in the books in order to reduce the indebtedness of KSL to the bank and bring it within the statutory lending limit and in a bid to make it appear as if there was compliance with the guidelines on sectoral allocation to varying f priority sectors of the economy. The lending guidelines classified the priority areas for granting loan facilities as including agriculture, manufacturing, real estate and construction. The prosecution’s case is that hitherto, the accused had uni- g laterally granted unauthorised colossal credit facilities to KSL above the statutory lending limit and in contravention of banking laws. The violations of the laws and regulations committed by reason of the irregular lending would if, fully h detected, attract severe penalties. The accused had to devise a deceitful means of averting penalties by spreading KSL’s indebtedness. I have no doubt in my mind that the prosecution has estab- i lished that false debit notes dated 27th September, 1990 (exhibits FB.57A–57C) were raised in line with instruction given by the first accused as reflected in the internal office memo (exhibit FB.34) of same 27th September, 1990. In j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 631 a that memo it was recorded that loans were granted to the said three companies whereas they were not. I find that in exhibit 57A (the debit note) falsely represented that the sum b of N15 million was granted CEI Farms limited “being the principal on the above loan account for seven years at 28% interest”. There was no such loan and no movement of funds as at 27th September, 1990 when the document was raised. c The same goes for exhibits 57B showing N10 million debited to the account of Butler Nigeria limited being “the principal on the above loan account for five years at 32% interest” there was no such loan then. Similarly, exhibit 57C debited the loan account of Benue Cattle Ranch Ltd with the d sum of N15 million “being the principal on the above loan account for seven years at 28% interest. The loan never existed as at that date 27th September, 1990. e The learned defence Counsel urged that the accused be discharged on this count on the ground that there was no falsity in the entries and that the loans are shown to have been granted. The position has been made crystal clear from the f entire facts of the case that as at the date 27th September, 1990 when the memo and debit notes were raised no loan was granted to any of the three companies. Loans were not granted to the three companies until recommendation for g same was made by the Credit Committee at its meeting of 5th March, 1991 and approval by the board on 8th March, 1991. The minutes of the meeting of both the Committee and the Board are clear on the point and already referred to h under Count 24 of the charge. The first accused’s defence that the three companies were in fact granted term loans which the board subsequently approved in March, 1991 does not answer the prosecution’s i case that in September, 1990 the accused purported to show that loans to the three companies existed from the huge advances made to KSL whereas no funds moved. The prosecution’s case is better understood from the evidence of bank j examiners who testified. The situation was well explained at [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 632 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. pages 6 and 7 of the NDIC Special Report exhibit FB33 in a these words:– “The distribution of the loans to various companies was a deliberate attempt to avert the payment of penalty for extension of Credit b in excess of statutory lending limit in violation of section 13(1)(a) of the Banking Decree, 1969. Placement with KSL was credited with the loan equivalent while the companies’ accounts were debited with the phoney loans. Since no new funds were actually disbursed the original funds placed with KSL remained tied down to c the Cooper Road, property acquisition. We consider it fraudulent for the chairman to have purported to have granted agricultural and term loans in order to cover up the property acquired by his securities firm with depositor’s fund. Thus he failed to display the d impeccability of character and transparency required of the management of a banking institution ‘such fraudulent practices could surely erode depositors’ confidence in the banking system which could in turn induce financial system distress’.” e The accused tendered as exhibit FB. 58D – the report of the auditors that investigated allegations made against him. At page 4, it was confirmed that it was to reduce the exposure to KSL in respect of the advances granted that the N40 million of the KSL advances was sold to the three companies of f the accused as loans. The report added: “These sales did not however involve movement of funds”. It is clearly established that the Loans to KSL beyond statutory limit and without the approval of the Credit Committee or the Board g for the purchase of 2 Cooper Road, Ikoyi prompted the first accused to device a cover-up means of “normalising” KSL’s exposure. The accused purported to approve the transfer of N40 million of KSL’s debt to his said three private compa- h nies as loans. There was no movement of the said funds as evidence of the sale or transfer of KSL’s indebtedness. The attempt to reduce KSL’s indebtedness was to deceive, generally, and in i particular, the regulatory authorities like NDIC and the Cen- tral Bank into believing that the exposure to KSL was within statutory limit and in priority areas like agriculture and not in contravention of the banking laws. That was deceitful. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 633 a The prosecution had proved through PW6, Mr Ajumobi of the NDIC and PW8 Mr Ayoku-Babatunde of the Central Bank that the earlier loans purportedly granted in Septem- b ber, 1990 were phoney and existed on paper only viz: the In- ternal Memo and debit note exhibit 34. The false entries were to the effect that CEI Farms Ltd was granted N15 million as Agric Loan for seven years, Benue Cattle Ranch Ltd c was granted N15 million Loan for seven years and that But- ler Nig. Ltd was granted 10 million as Term Loan for five years. I find as a fact that the stated entries in the internal memo exhibit 34 dated 27th September, 1990 and the three debit notes exhibits 57A–C of the same 27th September, d 1990 caused to be raised by the first accused are false entries. The intention behind raising the false documents was not to grant a direct loan from the bank to the three companies but meant to cover up as aforesaid in relation to exces- e sive and unauthorised advances to KSL. It is noted that after the first accused had promised PW8 he would rectify the questionable loans to the three companies that in March 1991, he sought the approval of the Board for direct loans to f CEI Farms Ltd and Benue Ranch while he sought ratification of the loan he earlier granted Butler. Steps taken by him to regularise matters included abandoning the false internal memo and debit notes of 27th September, 1990 and later le- g galised the loans through the Credit Committee and Board of directors in March, 1991. The advances thereby became lawful and direct loans from the bank to the three companies in March, 1991 without reference to the KSL’s indebted- h ness. This time around recommendations of the credit committee and the approval of the Board were obtained and the three companies therefore became lawfully indebted to the bank in the total sum of N40 million advanced to them. The i fact however remains that the entries in the bank documents made in 1990 were false entries as charged in Count 27. Findings: Count 27 proved and the first accused is accordingly found j guilty and convicted. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 634 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

26th February, 1996:– a BEFORE HONOURABLE JUSTICE C.A.R. MOMOH, CHAIR- MAN ON TUESDAY THE 26TH DAY OF FEBRUARY, 1996 b First accused present. Second accused absent. Prof. M.I. Jegede, Ibukun Ajomo with him for the prosecution. c Chief G.N. Uwechue with him, G. Nkemnacho and J.E. Ugowe for the first accused. Tribunal: d Matter listed for ALLOCUTUS/SENTENCE of the accused, Chief Uwechue States:– In accordance with the oral undertaking at the last hearing e that the accused would surrender property in mitigation of sentence, the amount involved in the offence has been ascertained. It is a total of about N94,177.038 and the accused has offered to voluntarily surrender the property at No. 2, Coo- f per Road, Ikoyi, Lagos valued N185,000,000 to the Tribunal for confiscation but subject to the arrangements contained in the letter written to the Counsel prosecuting. Tribunal: Letter dated 24 February, 1996. g Chief Uwechue: After satisfying the amount involved in the offences charged from the proceeds of sale of the property surrendered, the Tribunal is humbly urged to direct that the h balance be preserved to meet future claims to be settled by the first accused. By section 15(1) of Failed Banks Decree No. 18 of 1994, the property may be sold by auction or by private contract. The Tribunal is urged to order the sale of the property by private contract. Tribunal is further urged to i apply the provisions of section 20(5) of the Decree (as amended) by declining to impose any sentence on the accused since the amount involved in the offences shall be fully recovered by the sale of the property now surrendered. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 635 a The property voluntarily surrendered was purchased by the accused in the name of his private company, Kapital Securi- ties Ltd (“KSL”) with funds of the bank. He is prepared to b sign all documents to effect the transfer of the property to the purchaser in his capacity as the chief executive of the said company. The first accused has been in prison custody since 14 July, 1995, he is a first offender and he is not enjoy- c ing the best of health. The utmost leniency is pleaded on his behalf. Reply by Prof. M.I. Jegede: The amount involved in the d criminal charges is not N94 million but by the prosecution’s calculation it is a total of N682,808,230.18 – made up of N166,150,127.40 debt owed by KSL, N41,166,408.84 debt by Butler Nig. Ltd, N7,307,152.45 by Kapital investments e Ltd, N5,252,688.84 debt by Atlantic Bank Ltd, $6655.57 by Boogain Ltd (equivalent to N5,657,197.95), theft of foreign exchange of $4,766,324.62 or N406,137,592.70 and theft of 392,008 pounds sterling equivalent to N52,137,964. The f amount actually involved in the offences charged as at 31st January, 1996 is as stated in the aforesaid figures, though most of the amounts were not reflected in the offences charged. g Tribunal to Counsel: Calculations to be restricted to the sums involved in the counts of which the accused was convicted. All other sums not forming subject matters of proven charges against the accused shall be discountenanced for the h purpose of sentence. The amount involved in the offences charged is ascertainable from the offences charged or proved. The amount now asserted by the prosecution far ex- i ceeds those on the charges and much less than those on counts proved namely Counts 1, 2 and 19. Prof. Jegede: The amount involved in the offences is N234,191,544.32 while civil action will be instituted to re- j cover other sums due. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 636 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Chief Uwechue: States that as per the counts proved the fol- a lowing sums were the ones involved in that they constituted losses to the bank. Count 1 and 4 the sum of N12,140,502.48 b Count 2 and 6 the sum of N12,868,374.70 Count 19 the sum of. . . N51,000,000.00 TOTAL N76,008,877.18 c Professor Jegede continues: In the event of the Tribunal accepting that a total of N76,008,877.18 was involved, NDIC may proceed to civil claims for the balance. I wish to submit that the punishment to be imposed should take the d technical offences into account. Most of the counts are technical in that they are breaches of banking laws regulation without criminal intent and in such cases options of fine where allowed, should be imposed. Counts 22, 23 and 27 e contain serious offences that permit of no option of fine except under section 20(5) of the Decree No. 18 of 1994. The offences are designed to protect the financial industry of the nation. The accused was in a position of trust to deal with f other people’s money in accordance with the law. He breached the trust and should be punished. On the issue of property voluntarily surrendered it is acceptable under section 20 of the Decree and should be con- g fiscated. Tribunal: Calls for the documents of title to the property at No. 2 Cooper Road, Ikoyi Lagos voluntarily surrendered by the first accused. h Chief Uwechue: Here is the Building lease dated 15/8/47 between H.E. Sir Arthur Frederick Richards, Knight, Gover- nor and Commander in Chief of Nigeria and Secony- Vacuum Oil Co Incorp. It created a 99 years effective 1-12- i 46. It is registered as No. 50 at page 50 in Vol. 692 at Lagos. The second instrument is a deed of Assignment dated 6th June 1990 between Mobil Oil Nig. Ltd (changed name of Secony-Vacuum Oil Co Incorp.) and Kapital Securities Ltd j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 637 a registered as No. 46 at P. 46 in Vol. 1909 of the Land Regis- try Office, Lagos. Tribunal: Original documents tendered and kept in custody b of the Tribunal office having been shown to the prosecuting Counsel. The learned defence Counsel informs the Tribunal that there are no encumbrances and that the tenancy granted the American Embassy (presently in occupation) by Kapital c Securities Ltd shall expire on the 14th March, 1996 with no commitment on either side to renew. Tribunal: Issues As To Sentence d I have given due consideration to the nature of the offences committed by the accused and sums involved. I have fully considered the plea of the learned defence Counsel in mitigation of sentence. Although the law gives latitude and in- e deed wide discretion, after conviction, to the tribunal on the issue of sentence, I shall however be mindful of the need to instil discipline and sanity in the minds of bankers and directors of banks in handling funds in banks belonging to de- f positors, investors, shareholders, etc. There is need for the realisation on the part of bankers that they are trustees of the funds for the people and as such should at all times desist from succumbing to the temptation of committing any g criminal breach of such trust. In imposing sentence, I shall consider in favour of the accused the fact that he had voluntarily surrendered the property at No. 2, Cooper Road, Ikoyi Lagos which is worth more than the amount involved in the offences charged against him. The amount admittedly in- h volved in the offences for which he was convicted (which constituted a Loss, as it were, to the bank) is N76,008,877.18. The property surrendered is worth over N150 million (One Hundred and Fifty Million Naira). The i accused has surrendered it for sale in settlement of the sums involved in the offences for which he was convicted and for the balance to be used to liquidate any other claims due from him/his private companies to the bank. I am told that this j criminal trial notwithstanding, that the accused is yet to face [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 638 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. the civil aspect for the recovery of debts due from him a and/or his private companies, I shall also take this into account in mitigating his sentences. I agree with the learned prosecuting Counsel that most of b the offences for which the accused was convicted warrant the imposition of options of fine while the remaining few which are of more serious nature should be punished appropriately. There are also instances of similar or duplicated of- c fences punishable under the same section of the law; they have been treated in groups in my judgment. The imposition of a sentence on one of such similar offences would warrant a discharge order in respect of other offences within the d group. I also shall decline to impose any sentence on the bank (second accused) which is already liquidated and is strictly speaking the main victim of the offences committed. Two set of Orders shall now follow namely: Orders as to the e Property Surrendered and Orders as to Sentences imposed. (A) Orders as to property surrendered 1. The property lying and situate at No. 2 Cooper Road, Ikoyi, Lagos purchased with the funds of the Kapital f Merchant Bank Ltd in the name of Kapital Securities Ltd which said property has been voluntarily surrendered by the first accused under section 20(3) of Failed Banks (Recovery of Debts) And Financial Malpractices In Banks Decree No. 18 of 1994 is hereby ordered to be g forfeited to the Nigeria Deposit Insurance Corporation (NDIC) the Liquidators of (and for the benefit of) the Kapital Merchant Bank Ltd. 2. The NDIC shall dispose of the property by public auc- h tion for an amount not less than N185 million (suggested current value). 3. The original title deeds of the said property shall be collected from the Tribunal and signed for by the NDIC for i the necessary transfer formalities in favour of the ulti- mate purchaser. 4. Part of the proceeds of sale viz: N76,008,877.18 involved in the offences for which the first accused was convicted shall be applied by the said NDIC in line with j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J Federal Republic of Nigeria v. Dr Onwochei Odogwu and Another 639 a their statutory duties and powers as Liquidators of the failed Kapital Merchant Bank Ltd. The balance shall be held to the credit of the accused and applied towards the settlement of other monetary claims payable by the ac- b cused and/or his private companies to the Kapital Mer- chant Bank Ltd DATED THIS 26TH DAY OF FEBRUARY 1996. Hon. Justice C.A.R. MOMOH c JUDGE/CHAIRMAN (B) Orders as to sentences Of the 27 count charge, the first accused was found guilty d and convicted on 18 Counts namely: 1, 2, 4, 6, 7, 8, 9, 11, 13, 15, 16, 18, 19, 20, 21, 22, 23 and 27. He was found not guilty and acquitted on three Counts – 24, 25 and 26. The second accused, (Kapital Merchant Ltd) was found e guilty and convicted on six counts: 3, 5, 10, 12, 14 and 17. As earlier herein indicated, there shall be no sentence imposed on the bank. I hereby accordingly Order the discharge of the second accused (bank) on the said counts 3, 5, 10, 12 14 and 17. f SENTENCES ON FIRST ACCUSED The first accused is hereby sentenced as follows:– 1. Count 1: Fine of N4,000 or imprisonment for 2 years. g 2. Count 2: Fine of N4,000 or imprisonment for 2 years. 3. Count 4 Discharged. 4. Count 6: Discharged. h 5. Count 7: Fine of N2,000 or imprisonment for 1 year. 6. Count 8: Fine of N2,000 or imprisonment for 1 year. i 7. Count 9: Fine of N2,000 or imprisonment for 1 year. 8. Count 11: Deemed guilty (Discharged). 9. Count 13: Deemed guilty (Discharged). j 10. Count 15: Discharged. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, BENIN ZONE) Momoh J 640 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

11. Count 16: Fine of N1,000 or imprisonment for 6 a months. 12. Count 18: Discharged. 13. Count 19: Fine of N10,000 or imprisonment for 2 b years. 14. Count 20: Fine of N10,000 or imprisonment for 2 years. 15. Count 21: Discharged. c 16. Count 22: Imprisonment for 3 years. 17. Count 23: Imprisonment for 3 years. 18. Count 27: Imprisonment for 3 years. Order: d The fines are to be paid cumulatively and the terms of imprisonment to run concurrently. That is to say, a total fine of N35,000 (Thirty-five thousand Naira) and imprisonment for three years. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye 641 a Union Bank of Nigeria Limited v. Ifeatu Augustine Nwoye b SUPREME COURT OF NIGERIA MOHAMMED, UWAIS CJN, ADIO, IGUH, OGWUEGBU JJSC Date of Judgment: 27 FEBRUARY 1996 Suit No.: S.C./51/1993 c Banking – Banker and customer relationship – Cheque – Failure to pay customer’s cheque – When bank will be liable – Paying in cheque into customer’s account – Whether puts account of customer in funds without clearance d Facts The plaintiff/respondent maintained a current cccount with the Asaba Branch of the appellant bank. On 2nd July, 1984, e the respondent issued a cheque for N15,000 to a trading partner, one Ifeatu Onuorah and Company. The cheque was presented on 11th July, 1984 for payment. But it was dishonoured because as at the time the respondent had only f N7,621.24 standing as balance in his current account. The respondent who believed that at the time he had enough money in his account to meet the said cheque felt greatly injured as to his credit and trade. He pleaded that he suffered g loss and damage. Consequently, the respondent instituted the present action against the appellant claiming the sum of N100,000 being special and general damages for wrongful dishonour of his h cheque. In the alternative, he claimed for N100,000 special and general damages for negligence. At the end of the trial, and in a considered judgment, the learned trial Judge agreed that the respondent was entitled to damages for the appel- i lant’s wrongful dishonour of his cheque. The court thereafter awarded the respondent N28,266 as special damages and N11,734 as general damages. Being dissatisfied with the decision, the appellant bank ap- j pealed to the Court of Appeal. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

642 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The Court of Appeal dismissed the appeal. The appellant a further appealed to the Supreme Court. Held – b 1. The liability of a banker to its customer arises in contract when a banker refuses to pay a customer’s cheque when the customer holds in his account an amount equivalent to that endorsed on the cheque. c 2. The moment a bank places money to its customer’s credit the customer is entitled to draw upon it unless something occurs to deprive him of that right. 3. A cheque which has not been cleared, where clearance is d necessary, does not put the account of a customer in funds. 4. The correct banking procedure, is that the amount in the e draft cheque, even if credited to a customer’s account is not equivalent to cash lodgements. The customer has to wait until after the cheque has been cleared in the clearing house within the Central Bank before it could be regarded as cash. f 5. It is trite that whoever alleges banking custom must prove it. In the instant case, the respondent pleaded banking custom in respect of clearance of draft cheques g but the evidence adduced went contrary to the pleading. Appeal allowed.

Cases referred to in the judgment h Nigerian Ashubiojo v. A.C.B. (1966) 2 All N.L.R. 203 Balogun v. N.B.N. (1978) 3 S.C. 155 i Missri v. British Bank of West Africa (1967) N.C.L.R. 427 Omoregbe v. Edo (1971) 1 All N.L.R. 282 Yougo v. C.O.P. (1992) 8 N.W.L.R. (Part 257) 36 j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA)

Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye 643 a Foreign Capital and Counties Bank v. Gordon (1903) A.C. 240 b Counsel For the appellant: E.O. Ebohon For the respondent: Chief O.B. Onyali c Judgment MOHAMMED JSC: (Delivering the lead judgment) The plaintiff, who is the respondent in this appeal maintained a d current account with the Asaba Branch of the appellant bank. On 2nd July, 1984, the respondent issued a cheque for N15,000 to a trading partner, one Ifeatu Onuorah and Com- pany. The cheque was presented on 11th July, 1984 for pay- e ment. But it was dishonoured because as at the time the respondent had only N7,621.24 standing as balance in his current account. The respondent who believed that at the time he had enough money in his account to meet the said cheque f felt greatly injured as to his credit and trade. He pleaded that he suffered loss and damage. Consequently, the respondent instituted the present action against the appellant claiming the sum of N100,000 being g special and general damages for wrongful dishonour of his cheque. In the alternative, he claimed for N100,000 special and general damages for negligence. At the end of the trial, and in a considered judgment, the learned trial Judge agreed h that the respondent was entitled to damages for the appellant’s wrongful dishonour of his cheque. The court thereafter awarded the respondent N28,266 as special damages and N11,734 as general damages. i Being dissatisfied with the decision, the appellant bank appealed to the Court of Appeal. The Court of Appeal, per the judgment of Isa Ayo Salami, JCA with which Ogundare, JCA (as he then was) and Ejiwunmi, JCA concurred, dis- j missed the appeal. The appellant has now come before this [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC 644 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Court on four grounds of appeal. The following four issues a have been raised for the determination of the appeal:– “(a) Had the respondent sufficient funds in his account as at 11/7/84 to meet his cheque for N15,000. If he did, the ap- b pellant will be liable for returning the cheque unpaid. But if he had no sufficient funds in his account, then the appellant will not be liable for returning respondent’s cheque unpaid. (b) When was the respondent’s A.C.B draft for N8,000 exhibit c 51 cleared at the Central Bank in Benin City? (c) Was it necessary in accordance with banking practice and procedure to clear drafts drawn on other banks before crediting the proceeds to customer’s accounts? d (d) Was the Court of Appeal correct in their findings having regard to the very serious conflicting findings by the Jus- tices of the Court of Appeal in this case.” The respondent’s Issue 1 is the same as appellant’s Issue 2. e In Issues 2 and 3 learned Counsel for the respondent questioned whether exhibit 51A was rightly admitted in evidence by the High Court and whether an appeal against such admission could lie when there was no ground of appeal f against it in the lower court. Before I proceed I would like to explain that the learned Counsel for the appellant did not question the admissibility of exhibit 51A in the issues raised against the grounds of appeal. g Learned Counsel for the appellant, Mr Ebohon, argued all issues raised by the appellant together. It is however very clear that the main issue, in this appeal, is issue 1. The sim- h ple and straightforward question is whether at the time the cheque of N15,000 was presented to the appellant’s branch at Asaba for payment the respondent had sufficient funds in his account to meet the amount. If on the 11th July, 1984, when the cheque was presented the amount standing as bal- i ance in favour of the respondent, in his account, was not sufficient to meet the sum of N15,000 to be cashed, the appellant would not be liable. It is the case of the respondent that at that time he had enough funds to meet the cheque. j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye 645 a In order to give an accurate picture of the case of the respondent it is relevant to reproduce an extract from the evidence of the respondent before the trial High Court. In the b testimony, the respondent explained how he deposited up to N19,671.24 in his account by the 10th of July, 1984. He described how he made his lodgement in the following words:– c “As at 28/6/84 I had in my current account with the defendant bank the sum of N9,038.24. Between 2/7/84 and 10/7/84 I made many lodgements. I can recognise the bank teller with which I made lodgements of N191: marked exhibit 14, N1,700 bank draft: marked exhibit 15, d N8,000 bank draft A.C.B. Asaba marked exhibit 16. On 5/7/84 I made lodgement N500 cheque A.C.B. Asaba exhibit 17; N2,000 bank draft; tendered: exhibit 18, on 6/7/84 I made lodgements N3,003 in cash. Tendered and marked exhibit 19 e N5,660, Union Bank draft and marked exhibit 20. On 10/7/84 I paid in N620 Union Bank Asaba cheque, It is exhibit 21. As at 10/7/84 I have in my account N119,671.24.” f The appellant admitted through the evidence of Mrs Juliet Adaobi Madubueze, who was the branch manager of the appellant bank in Asaba at the material time, that the respondent had made lodgements to the tune of N19,671.24. How- g ever, some of the lodgements were made through bank drafts and cheques which had not been cleared, by the 11th of July, 1984, when respondent’s cheque of N15,000 (exhibit 35) was presented. Mrs Madubueze gave a detailed ac- h count of the lodgements in the following testimony:– “As at 6/7/84 the draft which I sent to Benin City had not been cleared. I saw exhibit 35 again on 11/7/84 the cheque was returned unpaid with reason “effect uncleared”. It means that although the i customer had made some lodgements into his account, not all the lodgements had been cleared to cover the amount on exhibit 35. The A.C.B. draft for N8,000 had not been cleared. The draft was sent to Benin for clearing on 9/7/84. There was also another cheque for N350 – a Benin cheque, which had not been cleared j too. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC 646 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

There were two other drafts which had not also been cleared. Ex- a hibit 10 is the ledger of the plaintiff. There was a cheque for N1,700 paid in on 2/7/84 had not been cleared as at 11/7/84. There was another draft for N200 from Co-operative bank Awka, paid in on 5/7/84. It had not been cleared on 11/7/84. b As at 11/7/84 the plaintiff’s account as per exhibit 10 was in black, to the tune of N19,671.24. This is so as all the lodgements had been credited to his account even though some had not been cleared. The true balance of the c plaintiff account was N7,621.” The bank manager explained further in her evidence that draft cheque from A.C.B. Asaba for N8,000 was cleared on 13th July, 1984; draft cheque from Co-operative bank, d Awka, for N2,000 was cleared on 20th July, 1984 and another cheque from the same Co-operative bank, Awka, for N1,700 was cleared on 18th August, 1984. Mrs Madubueze gave further clarification about draft cheque for N8,000. The e cheque was sent to A.C.B. Asaba for clearance. However, instead of clearing it, A.C.B. Asaba sent to the appellant, through a letter, exhibit 54, enclosing a draft for N86,285.46 drawn on A.C.B. Ring Road, Benin. The letter reads:– f EXHIBIT (52) 6th July, 1984 The Manager Union Bank of Nig. Ltd, Asaba. g Dear Sir, We enclose herewith our draft No. DX/573480 dated 6/7/84 for the sum of N86,285.46 drawn on our Ring Road branch in settlement of your cheques sent to us for clearing. h NOTE OUR REMARKS BELOW Being you c/c No. 48, 40, 56, 55 and 32/84 now paid. Kindly acknowledge receipt on the duplicate copy. Yours faithfully, i For: African Continental bank Ltd (Sgd). For Manager.” The cheque for N86,285.46 had to be cleared by A.C.B. Ring Road, Benin before the appellant could be able to j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye 647 a possess the proceed in the draft. This has been made clear through the evidence of PW4, Iro Nwafor Uloaniche, the then branch Manager of A.C.B. Asaba where he said:– b “It is the usual procedure for our Ring Road branch to settle drafts issued by us. The same applies to Union Bank – the defendant. There is a clearing centre in Benin where all the banks settle their indebtedness. The clearing centre in Benin is the Central Bank. Exhibit 52 has to be cleared/settled at the Central Bank, Benin c City. Not until the proceeds as per exhibit 52 are settled by A.C.B. Ring Road, Benin City, the defendant would not be in possession of the proceeds of the exhibit. Each local bank in Bendel has an account with the Central Bank in d Benin City. In respect of exhibit 52 the proceeds therein will be debited to the account of A.C.B. and credited to the Account of the defendant at the Central Bank. Thereafter our head office in Benin will notify the Union Bank, Asaba as well as A.C.B. Ltd, Asaba (that the) e draft is cash.” In spite of the above expert opinion on banking practice from PW4 who is the respondent’s witness both the learned trial Judge and the Court of Appeal made specific findings f that on 6th July, 1984 when A.C.B. Asaba, acting under the instruction of the appellant bank, wrote exhibit 52 enclosing draft for N86,285.46 drawn on Ring Road, Asaba in settlement of appellant’s bank cheques that would amount to giv- g ing clearance to the draft cheque of the respondent for N8,000. What remained were bank to bank transactions. The learned trial Judge held that on 6th July, 1984 the cheque for N8,000 (exhibit 51) was cleared when the appellant received h the letter, exhibit 52. The Court of Appeal affirmed the High Court finding in the following words:– “The issuance of the second draft DX 573480 dated 6th July, 1984 is primarily the responsibility of the African Continental bank for i which it could be held liable in any eventuality and solely the making of the appellant. The Asaba branch of the appellant, having received draft No. DX573480 dated 6th July, 1984, which is shown by the covering letter, exhibit 52, that it included the proceeds of exhibit 51, N8,000 was duty bound to honour the respon- j dent’s cheque for N15,000, exhibit 35 on 11th July, 1984 when it [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC 648 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

was represented. The reason being that when that N8,000 was a award (sic) to N7,641.23 credit balance the appellant concede the respondent had more than N15,000 to his credit. This amount owed by the bank was adequate to satisfy the value of the cheque.” b The two lower courts were of the view that receipt of exhibit 52 by the appellant and entries of the N86,285.46 in the ledger of the appellant tantamount to clearance of cheque for N8,000 which was included in the draft cheque of c N86,285.46. Therefore the appellant was duty bound to honour the respondent’s cheque for N15,000. But this, with respect, is an erroneous conclusion. If the receipt of exhibit 52 amounted to giving clearance of the draft cheque for N8,000 d then the appellant shall be liable, it seems to me that the Court of Appeal was not quite sure as to the liability of the appellant. The liability arises in contract when a banker refuses to pay a customers’ cheque when the customer holds in his account an amount equivalent to that endorsed on the e cheque. See Hirat Balogun v. National Bank of Nigeria Lim- ited (1978) All N.L.R. 63 at 70; also Ashubiojo v. African Continental Bank (1966) 2 All N.L.R. 203. The Court of Appeal referred to the case of Capital and Counties Bank v. f Gordon (1903) A.C. 240 at 249 and, quite correctly, found that the opinion of Lord Lindley was not relevant to the facts of this case. In that opinion Lord Lindley said:– “It must never be forgotten that the moment a bank places money g to its customer’s credit the customer is entitled to draw upon it, unless something occurs to deprive him of that right.” The Court of Appeal referred to counteracting stipulations in h the letters used for payment of money in the appellant bank which the respondent admitted reading, and which warned customers that the bank reserved the right, at its discretion, to postpone payment of cheques drawn against uncleared effect which might have been credited to the account. The i Court of Appeal thereafter concluded as follows:– “It is no longer open to the respondent, on the clear unambiguous wordings of the counter-acting stipulation, to canvass the argument that the respondent’s account was in credit to the tune of j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye 649 a N19,671 on 10/7/84. The respondent is estopped from pursuing this submission any further because it is common ground that some of the instruments that put the respondent’s accounts in credit were attributable to the uncleared effects which had been b credited to the account. He also with his eyes wide open sub- scribed to the stipulation when he paid in the cheques.” Still the Court of Appeal accepted that the appellant was liable. I must point out positively that a cheque which has not c been cleared, where clearance is necessary, does not put the account of a customer in funds. There is evidence from both the plaintiff and defendant’s d witness, who were bankers, on the banking procedure in respect of clearance of draft cheques. In this case, A.C.B. Asaba did not clear the draft cheque of N8,000 which was sent to it by the appellant. As I mentioned earlier, the bank e sent to the Union Bank Asaba, the appellant, a draft cheque for N86,285.46 drawn on A.C.B. Ring Road, Benin. The correct banking procedure, as has been explained by the bankers, is that the amount in the draft cheque, even if cred- f ited to a customer’s account, is not equivalent to cash lodgements. The customer has to wait until after the cheques have been cleared in the Clearing House within the Central Bank before it could be regarded as cash. g It is relevant to observe that the respondent pleaded custom in respect of clearance of draft cheques, but the evidence adduced went contrary to the pleading. It has long been established through several decisions that whoever alleges bank- h ing custom must prove it. See Missri v. British Bank of West Africa (1967) N.C.L.R. 427. In the result, I agree that the concurrent findings of fact by the two lower courts, in this case, are not supported by the i evidence before the trial court. At the time the cheque of the respondent for N15,000 was presented to the Union Bank, Asaba the account of the respondent had no sufficient funds to meet the amount. The appellant was not therefore liable in j damages for the dishonour of the respondent’s cheque. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Mohammed JSC 650 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

This appeal succeeds and it is allowed. The judgments of a both the High Court and the Court of Appeal are hereby set aside. The claim of the respondent is accordingly dismissed. If any monies including costs had been paid in consequence b of the decision of the High Court and the Court of Appeal, in this case, such monies shall be refunded to the appellant. The foregoing shall be the judgment of this Court. The appellant is entitled to the costs of this appeal which I assess at c N1,000. UWAIS CJN: I have had the opportunity of reading in draft the judgment read by my learned brother, Mohammed, JSC. I entirely agree with it and have nothing to add. d I therefore allow the appeal. I set aside the decisions of the lower Courts. In their place I enter judgment for the defendant/appellant and dismiss the claim by the plaintiff/respondent. I adopt the rest of the order in the said e judgment. OGWUEGBU JSC: I have read in advance the draft judgment delivered by my learned brother, Mohammed, JSC, and I f agree with the reasons which he gave for allowing the appeal. I too will allow it and abide the order as to costs made in his judgment. In view of the evidence of PW4 and DW2 on the banking g practice in relation to draft cheques, the learned trial Judge should not have found for the plaintiff/respondent and the court below was in error to have affirmed the findings of the learned trial Judge which were not supported by evidence h before him. In view of the pieces of evidence coming from PW4 and DW2, the defendant/appellant will not be in possession of the proceeds of the draft cheque until its account is credited i and that of A.C.B. Ltd, debited at the Central Bank of Nige- ria, Benin City which is the Clearing House. ADIO JSC: I have had a preview of the judgment delivered by my learned brother, Mohammed, JSC, and I agree that j [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Adio JSC Union Bank of Nigeria Ltd v. Ifeatu Augustine Nwoye 651 a the appeal succeeds. I too allow it and I abide by the consequential orders, including the order for costs.

IGUH JSC: I have had the privilege of reading, in draft, the b judgment just delivered by my learned brother, Mohammed, JSC and I agree entirely that there is merit in this appeal. The main issue that has arisen for determination in this ap- c peal is whether the plaintiff had sufficient funds in his account as at the 11th July, 1984 to cover his cheque for N15,000 drawn on exhibit 35 which was returned unpaid. If the answer is in affirmative, his action succeeds otherwise it d will be liable to dismissal. The parties appeared agreed that the key to resolving this issue lies with whether the plaintiff’s A.C.B. Ltd, Asaba draft for N8,000, exhibit 51, was cleared as at the said 11th e July, 1984. On the undisputed evidence before the trial court, the said A.C.B. Ltd, Asaba draft was forwarded to the defendant bank, namely, the Union Bank of Nigeria Ltd, Asaba in the afternoon of Friday, 6th July, 1984. On Mon- f day, the 9th July, 1984, being the next working day, it was forwarded by the defendant to its head office, Benin City for clearance by the Central Bank of Nigeria, Benin City. g There can be no doubt that the said draft, exhibit 51, as between A.C.B. Asaba and A.C.B. Benin City was, on the evidence cash but, certainly, not as between the defendant bank and A.C.B. Asaba until the draft was cleared at the Central Bank of Nigeria, Benin City. The facts of this case are not h such as involves the credibility of witnesses. It is plain to me, on the uncontroverted evidence before the court, that the plaintiff failed to establish that exhibit 51 was cleared as at the 11th July, 1984. In my view, the findings of both courts i below to the contrary, being totally unsupported by evidence led at the trial, must be regarded as perverse. See Sebastian S. Yongo and Another v. Commissioner of Police (1992) 8 N.W.L.R. (Part 257) 36 and Paul O. Omoregbe v. Ehigiator j Edo (1971) 1 All N.L.R. 282 at 289. [1994 – 1996] 6 N.B.L.R. (PART I) (SUPREME COURT OF NIGERIA) Iguh JSC 652 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

A bank will ordinarily not honour a customer’s cheque if a funds in his account are not sufficient to meet the cheque. It seems to me that the defendant/appellant on the facts of this case, was entitled to dishonour the plaintiff’s cheque, exhibit b 35, as it was not established that he had sufficient funds in his account to satisfy the said cheque. It is for the above and the more detailed reasons contained in the lead judgment of my learned brother, Mohammed, c JSC which I adopt as mine that this appeal succeeds and it is hereby allowed by me. The judgments of both courts below are hereby set aside and the plaintiff’s case is dismissed. I abide by the order for costs contained in the lead judgment. d Appeal allowed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

First Bank of Nigeria Ltd v. Chief Jubilee Karusta-Akporido 653 a First Bank of Nigeria Limited v. Chief Jubilee Karusta-Akporido b COURT OF APPEAL, JOS DIVISION OGUNTADE, MUNTAKA-COOMASIE, ORAH JJCA Date of Judgment: 29 FEBRUARY 1996 Suit No.: CA/J/694 c Banking – Cause of action – When does cause of action accrue in action by Banker to recover loan or overdraft Banking – Limitation of action – When time begins to run d for purpose of limitation law

Facts The appellant a banker instituted action in Jos High Court e against the respondent a customer claiming sum advanced to the respondent by way of overdraft. Several letters of demand were written to the respondent and he replied admitting the debt but promised to pay. At the High Court the re- f spondent pleaded statute of limitation contending that the action was statute-barred. The High Court dismissed the appellant suit on the ground that it was statute-barred. g Dissatisfied, the appellant appealed to the Court of Appeal. Held – The banker would have a right to demand from the customer h for payment of debt unless there is a contract between them stipulating that payment would be made at an agreed time. Once a banker makes a formal demand for payment and the customer refuses to pay within a stated deadline or a reason- i able period, the banker’s cause of action would accrue. Where however, the customer acknowledges the indebtedness, the date will be computed from the date the written acknowledgment is made. j Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION)

654 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Cases referred to in the judgment a Nigerian Egbe v. Adefarasin (1985) 1 N.W.L.R. (Part 3) 549 b Falobi v. Falobi (1976) 9–10 S.C. 1 G.B. Ollivant v. Vanderpuye (1935) 2 W.A.C.A. 368 Savannah Bank of Nig. Ltd v. Pan Atlantic Shipping and Transport Agencies Ltd (1987) 1 N.W.L.R. (Part 49) 212 c

Nigerian statutes referred to in the judgment Edict No. 16 of 1988 of Plateau State, section 18 d High Court Law Cap 49 Law of Northern Nigeria, 1963, section 32

Counsel e For the appellant: K. Ode Ogundare For the respondent: Efe Peddrals Osokpor, Esq.

Judgment f OGUNTADE JCA: (Delivering the lead judgment) The appellant was the plaintiff before the Jos High Court in suit no. PLD/J309/89 which it commenced against the respondent, as the defendant, claiming:– g “The sum of N96,232.81k (Ninety-six Thousand, Two Hundred and Thirty-two Naira, Eighty-one Kobo) being money advanced to the defendant plus interest thereon. The plaintiff also claims 27% interest on the said sum from 17th November, 1989 until the total sum is paid in full.” h The parties filed and exchanged pleadings. In the statement of defence filed by the defendant, he raised a preliminary objection contending that the plaintiff’s suit was statute barred. On 18th April, 1991, Emefo, J heard arguments for i and against the preliminary objection. On 25th April, 1991, he delivered his ruling on the objection. He ruled that the plaintiff’s suit was statute barred. He therefore dismissed same. The plaintiff was dissatisfied with the ruling. He j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA First Bank of Nigeria Ltd v. Chief Jubilee Karusta-Akporido 655 a brought this appeal against it on four grounds of appeal which reads thus:– “1. The learned trial Judge erred in law in dismissing suit no. b PLD/J/309/89 by disregarding rules of law and procedure. Particulars of Error Parties are bound by their pleadings and cannot go abreast of it. The defendant in their statement of defence/preliminary objection pleaded Limitation Act of 1623 c but on the court’s advice relied on Edict No. 16 of 1988 of Plateau state. 2. The learned trial Judge erred in law in dismissing suit no. PLD/J309/89 without giving due regards to the provision of d section 32 High Court Law Cap 49 Northern Nigerian Laws, 1963. Particulars of Error It was erroneous for the court to have left the issue of the charge unattended to and instead proceeded to destroy the e matter (he has a duty to determine) by dismissing it. 3. The learned trial Judge erred in law and fact by dismissing the suit no. PLD/J309/89 without giving due regard to the proper interpretation of ‘when cause action accrued’ and the letters of admission written by the defendant. f Particulars of Error (1) It was erroneous of the trial Judge to have held that the cause of action accrued on 12/7/83. (2) It was erroneous of the trial Judge to have disregarded g the letters of admission written by the defendant. 4. It was misdirection in the law and in fact for the trial court to have wrongfully exercised its discretion in favour of the respondents without due regard and reference to the Su- preme Court cases of; h (a) National Insurance Corporation of Nigeria v. Power Industries Engineering Co Ltd (1986) 1 N.W.L.R. (Part 14) 1 at 3. (b) T.O. Oyegbola v. Esso W/A Ltd (1966) 1 All N.L.R. i 170; Okorodudu v. Okoromadu (1977) 3 S.C. 21. Also Sutton v. Sutton (1883) 22 Ch. D 511 at 21. (c) Section 32 High Court Laws Cap 49 Northern Nigeria Laws, 1963. Order 47 Rule 1 of the Plateau State High Court (Civil j Procedure) Rules, 1987. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA 656 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Particulars of Misdirection a The learned trial Judge has failed to make the appropriate orders in dealing with all the issues before him as he did not act in accordance with the principles guiding the issues and consider the vari- b ous order he has power by law to make in the circumstances as justice demands.” In the appellant’s brief filed, the issues for determination were stated to be the following:– c “2.1. Whether the trial Judge was right in ruling that the plaintiff action accrued from the 12th July, 1983 and not 26th Sep- tember, 1988. 2.2. Whether the trial Judge was right in applying Edict No. 16 of 1988 of Plateau State when the defendant pleaded the d Limitation Act of 1623. 2.3. Whether the trial Judge was right in holding that the plaintiff could not rely on the charge created in its favour by the defendant as argued by the plaintiff’s Counsel. e 2.4. Whether the trial court properly exercised its discretion. 2.5. Whether it was proper for the trial Judge to have ignored the provisions of section 32 of High Court Laws Cap 49 Northern Nigeria Laws, 1963.” f The respondent did not file a brief although served with appellant’s brief and a hearing notice for the appeal. The matter came before us on 18th January, 1996 and we did not see any reason to further adjourn the appeal. We therefore heard it on appellant’s brief alone. g I think that a convenient point to start a consideration of issue is to determine whether or not the lower court was in error to have considered the objection of the respondent to the h effect that plaintiff’s/appellant’s suit was statute barred with reference to Edict No. 16 of 1988 of Plateau State rather than the English ‘Limitation Act of 1623’ as pleaded by the respondent. The short answer to the issue is to be found in the statement of the law by the Supreme Court in Joseph O. i Falobi v. Elizabeth O. Falobi (1976) 7–10 S.C 1 at pages 13–14 where Fatayi-Williams, JSC (as he then was) said:– “In our view, if a relief or remedy is provided for by any written law (or by the common law or in equity for that matter) that relief j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA First Bank of Nigeria Ltd v. Chief Jubilee Karusta-Akporido 657 a or remedy if properly claimed by that party seeking it cannot be denied to the applicant simply because he has applied for it under the wrong law. To do so would be patently unjust. Moreover, the objection to the application of the provisions of section 12 of the b Infants Law in particular circumstances of the case in hand, while it appear to be correct, is of a purely technical nature and the Western State Court of Appeal should not have refused to do substantial justice between the parties upon a pure technicality. (See G.B. Ollivant v. Vanderpuye c (1935) 2 W.A.C.A. 369 at page 370).” It seems to me that it would be wrong that whilst the Plateau State has its applicable Limitation Law, the lower court would still have to fall back on an old law which has ceased d to apply just because the respondent had erroneously pleaded the said English Act. The substance of the objection of the respondent was that the time laid down for the bringing of plaintiff’s suit had expired. The lower court was e therefore correct to have applied the relevant law on the point. Now section 18 of Edict No. 16 of 1988 (Plateau State) provides:– f “18. No action founded on contract, tort or any other action not specifically provided for in its Parts I and II of this Edict, shall be brought after the expiration of five years from the date on which the cause of action accrued.” g The relationship between the plaintiff and the defendant was one of banker/customer founded on contract. The plaintiff therefore had five years from the date the cause of action accrued. In paragraphs 4–13 of the statement of claim, the h plaintiff averred:– “4. Sometimes in 1979, the defendant applied for an overdraft of N35,000 which was to expire 30/4/80. The application was granted the interest rate then was 81/2%. i 5. By 30/4/80, the defendant again applied for an overdraft of N35,000 to enable him participate in the 1980–1981 plant- ing season. This application was granted at the interest rate of 9%. The plaintiff shall rely on the sanction ticket for the approval of the overdraft. j 6. The two overdrafts were however repaid promptly. [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA 658 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

7. The defendant however presented a cheque number 767 for a a sum of N15,000 for cashment or withdrawal on the 6th February, 1982. Which was honoured because of his previous performance between 1980–1981. Thus the overdraft facility was renewed to expire 31st December, 1982. The b bank shall rely at the trial on the ledger card and statement of account and if possible the cheque leaf No. 767 of Febru- ary 6th, 1982. The defendant is hereby called upon to present the counterfoil of the cheque leaf. c 8. On the 19th March, 1982 the defendant presented another cheque number 772 for a sum of N15,000 for cashment or withdrawal. This cheque and/or ledger card or statement of account will be relied upon at the trial and the defendant is called upon to present the counterfoil of the cheque leaf. d 9. On the 4th of May, 1982 the defendant presented another cheque for the withdrawal and/or cashment for the sum of N15,000. The cheque number is No. 775 of 4th May, 1982. 10. This cheque and or ledger card and or statement of account e shall be relied upon, the defendant is hereby requested to bring along his counterfoil. 11. As at 4th May, 1982 when the defendant made the last withdrawal of N5,000 the defendant stood indebted to the plaintiff bank to the tune of N29,486.28k (Twenty-nine f Thousand, Four Hundred and Eighty-six Naira, Twenty- eight Kobo). The amount being actual overdrafts advanced to him plus interest and less amount of lodgement made by the defendant. 12. Several letters of demand were written to the defendant to g offset this overdrafts without any favourable response from the defendant. The plaintiff shall at the trial rely on the various letters of demand written to the defendant, the defendant is hereby given notice to produce the plaintiffs h various letters of demand on its J.K. Akporido and Sons account. 13. On 24th February, 1983 and 12th July, 1983 the defendant wrote two separate letters to the plaintiff bank through its Manager. The letters referred to two accounts which are i Rido Construction Company, J.K. Akporido and Sons Com- pany which is the object of the suit. In the two letters, the defendant admitted owing the bank on the accounts and promised to settle the debts when fund is available. The bank shall rely on this letters at the trial of this suit.” j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA First Bank of Nigeria Ltd v. Chief Jubilee Karusta-Akporido 659 a The case of the plaintiff from the extracts of its statement of claim reproduced above is that it granted the defendant overdraft facilities on his account with the plaintiff. The b plaintiff being a banker will normally by its contract with the defendant be expected to charge interest on the account and may keep that position so far as long as it pleases. The plaintiff would have a right however to make a demand at anytime on the defendant for payment unless there is a con- c tract between them stipulating that payment would be made at an agreed time. When once a banker makes a formal demand for payment, and the customer refuses to pay within a stated deadline or a reasonable period, the banker’s cause of d action would accrue. A customer may renew the date of accrual of the cause of action by acknowledging in witting the indebtedness to the banker and the date of the accrual of the cause of action will e be computed from the date the written acknowledgement was made. In paragraph 13 of the statement of claim reproduced above, the plaintiff pleaded that the defendant on 12th July, 1983 wrote to it admitting the indebtedness, now the f subject matter of the suit leading to this appeal. In Egbe v. Adefarasin (1985) 1 N.W.L.R. (Part 3) 549, the term “Cause of Action” was defined by the Supreme Court thus:– “A cause of action means the factual situation stated by the plain- g tiff, if substantiated entitles him to a remedy against the defendant.” In the instant case, the facts pleaded by the plaintiff, revealed that the defendant took an overdraft and failed to pay the same back when the repayment was demanded or had h become due. But for the acknowledgment made by the defendant on 12th July, 1983, the plaintiff’s cause of action would have accrued much earlier when a demand in writing was made by the plaintiff. i In Savannah Bank of Nig. Ltd v. Pan Atlantic Shipping and Transport Agencies Ltd and another (1987) 1 N.W.L.R. (Part 49) 212 at 259 Oputa, JSC observed:– “Time will start to run when cause of action arose. It is therefore j absolutely necessary when dealing with Limitation Statutes to [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA 660 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

determine the precise date upon which the cause of action arose. a Without this basic fact, it would be impossible to compute the time.” The lower court in determining when the cause of action b arose in the instant case observed at pages 22–23 of the record of proceedings:– “The plaintiff’s cause of action accrued, in my view, when the defendant failed to pay money after he admitted in writing owing the c money and promised paying it when fund is available i.e. on the 12/7/83 when the defendant admitted in writing, owing the money and promised to pay; yet he failed to do so; it was on that 12/7/83 that the plaintiff’s cause of action accrued . . . As I said above, the plaintiff’s cause of action accrued on the d 12/7/83 when the defendant admitted in writing owing the money but failed to pay, as he had promised; it was from that date 12/7/83, that the plaintiff’s cause of action against the defendant accrued.” e In the appellant’s brief, Counsel argued that the date of the accrual of the cause of action should have been taken by the lower court as 26th September, 1988 when the plaintiff wrote the defendant another letter of demand. I think that the f argument is inept. Were that to be the position of law, it would mean that the plaintiff would possess in perpetuity the right to shift forward as it suits him the date of accrual of his cause of action since all he would need to do is to just send g another letter of demand. In my view the plaintiff’s cause of action arose when he sent the first letter of demand. The defendant’s acknowledgment only enabled the cause of action to shift forward to h the date of the written acknowledgment which was 12th July, 1983. The lower court to my view correctly decided that the cause of action arose on 12th July, 1983. The plaintiff did not issue its writ of summons until 23rd i November, 1989, a period of about six years and four months after the cause of action accrued. The plaintiff’s suit is therefore caught by section 18 of Edict No. 16, 1988, of Plateau State. j [1994 – 1996] 6 N.B.L.R. (PART I) (COURT OF APPEAL, JOS DIVISION) Oguntade JCA First Bank of Nigeria Ltd v. Chief Jubilee Karusta-Akporido 661 a Appellant’s Counsel has also argued that the lower court was in error to have held that the plaintiff could not rely on a charge created in favour of the plaintiff. But as the lower b court rightly said, the plaintiff did not in its statement of claim plead any charge or mortgage deed in its favour. The Limitation Law in any case only prevents the plaintiff from suing to recover the amount said to be owed it by the defen- c dant. It does not mean that the plaintiff could not pursue other remedies granted it by any contract with the defendant. Finally, the appellant argued that the lower court in its ruling ignored the provision of section 32 High Court Laws of d Northern Nigeria, 1963. I have read the said section which provides that the High Court shall as far as possible settle all issues in controversy between parties to avoid a multiplicity of proceedings. In my view the said section 32, Cap 49 Laws e of Northern Nigeria is irrelevant to the issue whether or not the plaintiff brought its suit outside the period set out by the applicable Limitation Edict No. 16 of 1988. There is no merit whatsoever in this appeal. The appeal is f dismissed. I make no order as to costs. ORAH JCA: I have had a preview of the judgment of my learned brother, Oguntade, JCA, just delivered. I am in complete agreement with the reasons and conclusion reached g therein. I will also dismiss the appeal. The appeal is hereby dismissed. MUNTAKA-COOMASIE JCA: I read before now the leading judgment of my learned brother, Oguntade, JCA. He dealt h exhaustively and comprehensively too with the issues relevant to this appeal. I am completely in firm agreement with his reasons and conclusions in dismissing the appeal. For the reasons so intelligently advanced in the said judgment, i which I adopt as mine, this appeal is similarly dismissed by me. I too make no order as to costs. Appeal dismissed. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE)

662 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a Federal Republic of Nigeria v. Mr Christopher I. Anyaegbunam b FAILED BANKS TRIBUNAL, KANO ZONE ATIKU J Date of Judgment: 5 MARCH 1996 Suit No.: FBT/KNZ/CR/1/95

Banking – Offences – Non-disclosure of interest by directors c contrary to section 11(1) Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 – What prosecution must show – Offence under section 18(3) Banks and Other Financial institutions Decree No. 25 of 1991 – Ingredients of d Failed Bank Tribunal – Jurisdiction of in Criminal trials – Offences under section 11(1) Banking Act Cap 28 Laws of the Federation of Nigeria, 1990 – Accused contending that e bank illegal because banking licence of bank issued before the incorporation of bank – When accused will not be allowed to question

Facts f The accused was arraigned before the Failed Banks Tribu- nal, Kano Zone on two charges to wit: (1) Being a director of Group Merchant Bank Limited; failed to disclose his in- g terest in a N2,000,000 (Two Million Naira) credit facility, granted Cobik Supplies and Trading Company in which he had substantial interest contrary to section 11(1) of the Banking Act, Cap 28, Laws of the Federation of Nigeria, h 1990 and punishable under section 11(7) of the same Act and (2) also failing to disclose his interest in a N9,313,447.10 (Nine Million, Three Hundred and Thirteen Thousand, Four Hundred and Forty Seven Naira, Ten Kobo) credit facility granted by Group Merchant Bank, (a company i in which he is a director) to Cobik Supplies and Trading Company Limited contrary to section 18 of Banks and Other Financial Institution Decree and punishable under section 18(9) of the same Decree. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE)

Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 663 a It was contended on behalf of the accused: (1) That Group Merchant Bank was not a bank within section 2 of the Banks and Other Financial Institutions Decree since its licence, ex- b hibit A2, was issued under the Banking Act Cap 28 which was repealed by Banks and Other Financial Institutions De- cree, the bank not having applied for licence under Banks and Other Financial Institutions Decree; (2) that since the c Banking licence of Group Merchant Bank was issued before the incorporation of the bank, the licence of the bank was illegal and the charge herein could not lie since the bank was not a bank within the Banking Act Cap 28. d Held – 1. The argument that Group Merchant Bank is not a bank within the meaning of section 2 of the Banks and Other e Financial Institutions Decree is misconceived because although the Banking Act under which Group Merchant Bank was granted a licence ceased to exist by June, 1991, the right of the bank licenced under the Banking f Act is protected by virtue of section 6 of the Interpreta- tion Act. 2. In the instant case, the prosecution has proved that the g accused did not make any formal declaration as required by section 11(1) of the Banking Act Cap 28 in respect of the facility herein. He is therefore guilty as charged under section 11(1) of the Banking Act Cap 28. h 3. In the instant case, there is uncontradicted evidence that the accused is a director of GMB at all material times, there is also evidence that his interest in the facility was i personal since amongst other evidence he made certain disbursements to himself and he failed to declare his interest. The prosecution has therefore proved its case in respect of the second charge. j Accused person convicted and sentenced. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE)

664 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Cases referred to in the judgment a Nigerian Abaye v. Ofili (1986) 1 N.W.L.R. (Part 15) 134 at 146–147 b African Petroleum v. Owodunni (1991) 8 N.W.L.R. (Part 211) 391 at 416–417 Nasr v. Beirut-Riyadh (Nig) Bank Ltd (1968) All N.L.R. 274 at 283 c Nigerite Ltd v. Dalami (Nig) Ltd (1992) 7 N.W.L.R. (Part 253) 288 State v. Gwonto (1983) 3 S.C. 62 (1983) ANLR 109 d Foreign Kay v. Goodwin (1830) 6 BING 576; 130 ER 1403 Peason v. Broadbent (1870) 36 C and P 485 e Re HPC Productions Ltd (1962) 2 Ch. 466: (1962) 1 AER 37 Surtees v. Ellison (1829) 9B and C750, 752 or 107 ER 228 f The Gauntlet (1872) LR4 PC 184 at 191

Nigerian statutes referred to in judgment Banking Act Cap 28 Laws of the Federation of Nigeria g 1990, sections 11(1)(a), 11(2), 11(7) Banks and Other Financial Institutions Decree No. 25 of 1991, sections 2, 3(1), 3(2), 18(3), 18(4), 18(9) h Failed Banks (Recovery of Debts) and Financial Malprac- tices Decree No. 18 of 1994 (as amended), section 20(5) Interpretation Act Cap 192 Laws of the Federation of Nige- ria 1990, sections 6(1)(b), 6(1)(c) i

Counsel For the prosecution: Mr Aliyu Umar (with him Mr Garin Gabas) j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE)

Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 665 a For the defence: Mr J.B. Majiagbe (SAN) (with him Mr Aidi and Okoro (holding brief for Chief Williams (SAN))) b Judgment ATIKU J: The accused person was arraigned before this Tri- bunal on two charges which were subsequently amended. The two charges as amended are framed as follows:– c “FIRST HEAD OF CHARGES:– THAT YOU CHRISTOPHER ANYAEGBUNAM of No. 124 Norman Williams Street, Ikoyi, Lagos on or about the 8th day of November, 1990 at Lagos, being a director of d Group Merchant Bank Limited, failed to disclose your interest in a Two Million Naira (N2,000,000) credit facility granted to Cobik Supplies and Trading Company Limited, in which you have substantial share holding interest contrary to section 11(1) of the Banking Act Cap 28 Laws of e the Federation of Nigeria, 1990 and punishable under section 11(7) of the same Act. 2ND HEAD OF CHARGES:– THAT YOU CHRISTOPHER ANYAEGBUNAM OF NO. f 124 Norman Williams Street, Ikoyi, Lagos being a director of Group Merchant Bank Limited between November, 1991 and September, 1993, at Group Merchant Bank Limited, Lagos failed to disclose your interest in a Nine Million, g Three Hundred and Thirteen Thousand, Four Hundred and Forty Seven Naira, Ten Kobo (N9,313,447.10) credit facility granted by a Company, GROUP MERCHANT BANK LIMITED, to Cobik Supplies and Trading Company Lim- ited, in which you have substantial share holding interest h contrary to section 18(3) of the Banks and Other Financial Institution Decree No. 25 of 1991 and punishable under section 18(9) of the same Decree.” The two charges were read and explained to the accused per- i son and the accused person stated before the Tribunal that he had understood the two charges. The accused person however pleaded not guilty to both heads of charges. Immediately, the plea of the accused person was taken, it j was agreed between the prosecution and defence that the [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 666 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. trial be conducted by affidavit evidence and following the a adoption of this mode of trial it was further agreed between the defence and the prosecution as follows:– (1) That the prosecution should submit affidavit evidence in b support of the two heads of charges preferred against the accused person. (2) That on being served with the affidavit in support of the case for the prosecution, the defence would file their affidavit evidence in reply. c (3) That immediately both the prosecution and defence filed and exchanged affidavit evidence, cross-examination of witnesses/deponents would follow. (4) On completion of cross-examination by both the prosecu- d tion and the defence written addresses would be filed and exchanged. (5) Immediately written addresses are filed and exchanged by Counsel for both sides oral address would follow whereby e each side would highlight some essential points raised in their respective written addresses. (6) On completion of the proceeding set out in paragraph (1) to (5) above judgment would follow on a later date. f In compliance with the above arrangement the prosecution filed four (4) affidavits each deposed to by one of the witnesses listed on the charge sheet. In response, the defence filed one affidavit deposed to by g the accused himself. Thereafter the four witnesses of the prosecution who deposed to the affidavits filed by the prosecution appeared before the Tribunal where each adopted his respective affidavit and thereafter each was cross-examined. h On close of the case for the prosecution, the accused standing as (DW1) adopted his own counter-affidavit and was thereafter cross-examined. At the conclusion, both the prosecution and the defence i filed written addresses. The written address on behalf of the accused was filed on 3rd January, 1996. On 17th January, 1996, the prosecution filed their own written addresses dated 17th January, 1996. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 667 a In addition to their first written addresses, the defence, on 29th Janaury, 1996 filed a supplementary written address consisting of 18 pages. b The filing and exchange of the various written addresses was followed by an oral address by Counsel for each side. We are now at judgment stage. The two charges (as amended) filed against the accused person read as follows:– c “FIRST HEAD OF CHARGE:– That you Christopher Anyaegbunam of No. 124 Norman Williams Street, Ikoyi, Lagos on or about the 8th day of November, 1990 at Lagos, being a director of Group Mer- d chant Bank Limited, failed to disclose your interest in a Two Million Naira (N2,000,000) credit facility granted to Cobik Suppliers and Trading Company Limited, in which you have substantial share holding interest contrary to section 11(1) of the Banking Act Cap 28 Laws of the Federa- e tion of Nigeria, 1990 and punishable under section 11(7) of the same Act. SECOND HEAD OF CHARGE:– That you Christopher Anyaegbunam of No. 124 Norman Williams Street, Ikoyi, Lagos being a director of Group f Merchant Bank Limited between November, 1991 and Sep- tember, 1993, at Group Merchant Bank Limited, failed to disclose your interest in a Nine Million, Three Hundred and Thireen Thousand, Four Hundred and Forty-Seven Naira, g Ten Kobo (N9,313,447.10) credit facility granted by a Company, Group Merchant Bank Limited, to Cobik Suppli- ers and Trading Company Limited, in which you have substantial share holding interest contrary to section 18(3) of the Banks and Other Financial Institutions Decree No. 25 of h 1991 and punishable under section 18(9) of the same Act.” As indicated earlier in this judgment, the prosecution in order to establish their case against the accused filed four affidavits each deposed by a witness for the prosecution. i PW1 – OLUSOLA COLE The first witness for the prosecution was Miss Olusola Cole who deposed to a 6-paragraph affidavit on 13th De- cember, 1995. This 6-paragraph is reproduced in full for j ease of reference. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 668 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

I, Olusola Cole, Nigerian, Legal Practitioner of No. 57 Ma- a rina, Lagos do hereby make Oath and say as follows:– “1. That I was the Company Secretary of Group Merchant Bank Limited from September, 1990 to May, 1995. b 2. That Mr Christopher Anyaegbunam was a director of Group Merchant Bank during this period. That during this period Mr Christopher Anyaegbunam did not at any time give me a notice of his interest in Cobik Suppliers and Trading Company Ltd by Group Merchant Bank Limited to circulate c to the Board of directors of Group Merchant Bank Limited. 3. That copies of the minutes of the meeting of the Board of directors of Group Merchant Bank Limited from 22nd Oc- tober, 1990 to 7th December, 1993, are attached hereto and d marked exhibit P 1 – P. 10. 4. That on 9th September, 1991, Mr Christopher Anyaegbu- nam signed the Central Bank of Nigeria Code of Conduct for the directors of Licensed Banks in the Management of e the business of the bank. 5. That a copy of the said Code of Conduct from the Central Bank is hereby attached and marked exhibit P. 17. 6. That I swear to this Affidavit in good faith and in accordance with Oaths Act, 1982.” f On 20/12/95, PW1, adopted her 6-paragraph affidavit and also told the Tribunal that she is now working with the UBA (United Bank of Africa) at No. 57 Marina, Lagos but be- g tween September, 1990 – May 1995, she was working with the Group Merchant Bank Limited as its company secretary. Under cross-examination PW1 stated that she started working with the Group Merchant Bank (hereinafter referred h to as “GMB”) in September, 1990. PW1 also told the Tribunal under cross-examination that between September, 1990 and September, 1995, Air Vice Marshall Muktar Mohammed was the chairman of Group i Merchant Bank and he remained in that capacity until the Central Bank of Nigeria (“CBN”) intervened. PW1 also said that she came to know that Mr Tijani Abdullahi had become the Executive chairman of Group j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 669 a Merchant Bank after the intervention of the Central Bank of Nigeria and she had left Group Merchant Bank at that time. PW1, further said that although she knew that Cobik Sup- b plies and Trading Company Limited (hereinafter referred to as “CSTC”) has an account with Group Merchant Bank but she could not remember when Cobik Suppliers and Trading Company opened that account and as such she could not say c whether normal procedure was followed when Cobik Sup- plies and Trading Company opened that account. On being further cross-examined, PW1 stated that anything relating to the opening of that Account by CSTC would be d found in CSTC record. Under re-examination, PW1 said in her official capacity she had something to deal with the opening of account with Group Merchant Bank in that it is the legal department of e GMB that vets documents and conducts research at the Cor- porate Affairs Commission registry concerning accounts with Group Merchant Bank. PW2 – TIJANI MOHAMMED ABDULLAHI f The second witness for the prosecution was Mr Tijani Mo- hammed Abdullahi. In his 13 paragraph Affidavit deposed to on 13/12/95, it is averred thus:– g I, Tijani Mohammed Abdullahi, Male, Nigerian Citizen, Adult of No. 9 Oba Adeyinka Oyekan Avenue, Ikoyi, Lagos Muslim do make Oath and state as follows:– “1. That I was the Executive chairman of Group Merchant Bank Limited and as such, I am familiar with the facts of h this case. 2. That Group Merchant Bank Limited, is a Company, Li- censed to carry on banking business and was incorporated on the 28th day of August, 1990. A copy of the incorpora- i tion Certificate No. RC15339 and a photocopy of the license are herewith attached and marked as exhibits A1 and A2 respectively. 3. That the accused person was a director of the said Group Merchant Bank Limited since incorporation and had been j so all the times material to this two head of charges. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 670 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

4. That it is the practice of the said Group Merchant Bank a Limited to require from a body corporate, at the time of opening of an account with the bank to submit certain documents together with pre-prepared forms to be completed by such corporate bodies, specimen of such pre- b pared form is herewith attached and marked as exhibit B. 5. That the documents required from such corporate bodies are among others:– (i) The Memorandum and Articles of Association; c (ii) A photocopy of the Certificate of incorporation; (iii) Form CO7; (iv) Resolution of the Board authorising the opening of the Account and the signatories thereto and d (v) Specimen signature. 6. That a corporate body known as Cobik Suppliers and Trad- ing Company Limited applied to the said bank to open an account on 6th November, 1990, and submitted the documents listed in paragraph 5 above. That the Memorandum e and Articles of Association the photocopy of the Certificate of Incorporation photocopy of Certificate of Form C.O.2. and a Certified True Copy of Specimen signature and are herewith attached and marked as exhibits C1, C2, C3 and f C4 respectively. 7. That the requirements stated in paragraphs 4 and 5 as complied with by Cobik Supplies and Trading Company Lim- ited were for the purposes of enabling the Management of Group Merchant Bank Limited to appraise the application g by such corporate bodies with a view to either granting the same or rejecting the application. 8. That by a resolution dated 21st January, 1992, the Sole signatory to the account of Cobik Supplies and Trading Com- pany Limited is the accused person. A copy of the said reso- h lution is herewith attached and marked as exhibit ‘D’. 9. That the said Cobik Supplies and Trading Company Lim- ited started enjoying a credit facility granted by the Group Merchant Bank Limited in November, 1990, and the dis- i bursement of funds had always been at the instance of the accused person. 10. That between November, 1990 and September, 1993 the accused person made written request of funds disbursements eighteen times (18) times totalling the sum of j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 671 a N11,313,447.10K. The said written requests for the disbursements are herewith attached and marked as exhibits F1 to F17 in the order of dates in which they were made. 11. That an offer for the (Two Million Naira) N2 million credit b facility was made to Cobik Supplies and Trading Company Limited by Group Merchant Bank Limited by an offer letter dated 7th October, 1991. The said letter was effective from 8th November, 1990. A copy of the said letter is herewith c attached and marked as exhibit ‘G’. 12. That after exhibit ‘G’ no other formal approval was sought or given to Cobik Supplies and Trading Company Limited before the subsequent over-disbursements of N9,313,447.10K were made to Cobik Supplies and Trading d Company Limited by the Management of the Bank. 13. That I swear to this Affidavit believing same to be true and correct and in accordance with Oaths Act, 1963.” On 20th December, 1995, PW2, adopted his 13-paragraphs e affidavit. PW2 also stated that he is an Executive of Group Merchant Bank Limited which is located at No. 9 Oba Adeyinka Oyekan Avenue, Ikoyi, Lagos. f PW2 also revealed that he joined GMB in October, 1990 in the capacity of Deputy Manager and Head of the Corporate Finance. g PW2 was not however, cross examined by the defence and so the question of re-examination did not arise. PW3 – MR AHMED DIKKO (DSP) The third witness for the prosecution (PW3) was Mr Ah- h med Dikko (a Deputy Superintendent of Police (“DSP”) with Alagbon Close, Ikoyi, Lagos. He deposed to a 6-paragraph affidavit on 13th December, 1995 as follows:– i “I Ahmed Dikko, DSP, Nigerian Citizen, Male, Adult of the Nige- rian Police Force Alagbon Close, Ikoyi, Lagos, Muslim do make Oath and state as follows:– “1. That I am a Police Officer attached to FIIB Alagbon Close, j Ikoyi, Lagos and I am one of the Investigators in this case [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 672 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

and was named as witness in the summary of evidence in a support of the charge. By virtue of my position as an inves- tigator I am familiar with the facts of this case. 2. That I cautioned the accused person on the 4th of August, b 1995 in English Language and thereafter the accused person volunteered a statement in English Language which State- ment the accused person wrote personally. The said State- ment is herewith attached and marked as exhibit ‘1’. c 3. That during the cause of my investigation together with the other investigators I recovered documents connected with the case and they are attached and marked as exhibits in the Affidavit of one Tijani Abdullahi. 4. That in the cause of my investigation I also found that the d accused person is a director of Cobik Supplies and Trading Company Limited. 5. That during my further investigation, I obtained from the Corporate Affairs Commission a Form CO2 showing the e share distribution of Cobik Supplies and Trading Company Limited, a Certified True Copy of the said document is attached and marked exhibit ‘2’. 6. That I swear to this Affidavit in good faith and in accor- f dance with the Oath Act, 1963’.” On 20th December, 1995, PW3, stated before the Tribunal that he is a Senior Police Officer attached to the Federal In- vestigation and Intelligence Bureau (“FIIB”) at Alagbon g Close, Ikoyi, Lagos. PW3 also adopted his 6 paragraphs affidavit. PW3 said he came to know the accused when he, PW3, was made a member of the team assigned to investigate an h insider abuse lodged against the accused by the NDIC. PW3 pointed out that the NDIC lodged the complaint against the directors of Group Merchant Bank Limited after i insider abuse and the accused was one of such directors. PW3 further said that the accused was specifically accused by the NDIC of obtaining credit facilities through his company without declaring his interest. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 673 a This witness, PW3, was neither cross-examined on his affidavit evidence nor re-cross-examined on what he stated before the Tribunal. b PW4 – JAMES EJUE (ASP) The fourth witness for the prosecution was James Ejue ASP. who deposed to a 7-paragraph affidavit on 13th De- cember, 1995. c The full contents of PW4’s Affidavit is as follows:– “I, James Ejue, ASP, Nigerian Citizen, Male, Adult of the Nige- rian Police Force, Alagbon Close, Ikoyi, Lagos, Christian do make d Oath and state as follows:– ‘1. That I am an Officer of the Nigerian Police Force, attached to FIIB, Alagbon Close, Ikoyi, Lagos and a member of the Police team that investigated this case and as such I am familiar with the facts of this case. e 2. That among other things, during the cause of the investigation into this case, documents connected with the Account being maintained by Cobik Supplies and Trading Company Limited with Group Merchant Bank Limited were discov- f ered. 3. That I have been informed by Aliu Umar Esq., the Counsel prosecuting this case, that the said documents mentioned in paragraph 2 above are now attached as exhibits in the Affi- davits of Tijani Abdullahi, Farouk Shehu and Miss Olusola g Cole. 4. That on the 18th July, 1995, I cautioned the accused person in English Language after which he volunteered a statement in English Language and wrote the same himself. The at- h tached statement is herewith attached and marked as exhibit X. 5. That during the cause of investigations, I established that the sum of money involved is N11,313,447.10K as dis- i bursement to Cobik Supplies and Trading Company Lim- ited by Group Merchant Bank Limited. 6. That during the cause of the investigation, I also found that the accused person herein is a director of Cobik Supplies and Trading Company Limited and was a director of Group j Merchant Bank Limited. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 674 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

7. That I swear to this Affidavit in good faith and in accor- a dance with the Oaths Act, 1963’.” Before the Tribunal PW4 on 27th December, 1995 confirmed that his full names are James Ejue, and that he is an b Assistant Superintendent of police attached to FIIB, Alag- bon Close, Ikoyi, Lagos. PW4, said that he came to know the accused as a result of the complaint made against him by the NDIC on behalf of c Group Merchant Bank Limited. PW4 pointed out that he is one of the police officers assigned to investigate the allegation. d It was also revealed by PW4 that one of the things he did in the course of his investigation into this case was to caution the accused in the English language and that he established that the total amount involved in the alleged criminal e acts is N11,313,447.10K as disbursements to Cobik Supplies and Trading Company Limited. The defence however, made no attempt to cross-examine PW4. f At the close of the case for the prosecution, the defence opened their defence. There and then the accused expressed his keen desire to g enter into the witness box as defence witness so as to adopt his counter-affidavit. The accused also told the Tribunal that apart from witness as to character, he would not be calling any other witness. h This was confirmed by Mr Delano, the leading Defence Counsel on that day. On entering into the witness box as DW1, the only witness i for the Defence told the Tribunal that his full names are Christopher Ikemefuna Anyaegbunam and that he lives at No. 3B Lalupuna Close, South West, Ikoyi, Lagos. DW1 adopted his affidavit of 20th December, 1995. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 675 a DW1 also maintained that the disbursements in this case were made to Cobik Supplies and Trading Company Lim- ited and that Cobik Supplies and Trading Company Limited b was formed before the incorporation of Group Merchant Bank. DW1 revealed that he is a member as well as a director of CSTC. DW1 confirmed that in paragraph 9 of his affidavit c that he adopted paragraphs 4, 5 and 6 of PW2’s (Tijani Ab- dullahi) affidavit. DW1 also confirmed that he is a member as well as a director of CSTC before its inception. DW1 further confirmed that the memorandum and article d of Association Annexed to PW2’s Affidavit are those filed at the CAC in respect of CSTC. DW1 urged the Tribunal to take note of page 126 of the numbered documents that he had only one share before but e on 21st March, 1993 he was allotted additional shares in Cobik Supplies and Trading Company Limited. DW1 further said that he had nothing to add or subtract f from the contents of his affidavit but maintained that he did his best to execute his duties as director of GMB. On being cross-examined by the prosecution, stated as follows:– g Exhibit 2 attached to PW2’s affidavit is the annual returns that companies filed with CAC. It is true that out of the 26,250 shares attached (allotted) in the share capital of CSTC on 21st March, 1993 he, the ac- h cused, held 21,001 shares. Mrs Chigbogu Ngozi is his wife and that she held a total of 5,250 shares in CSTC. i It is true that from the date of incorporation of CSTC he, DW1 and his wife Ngozi, have been the only shareholders in CSTC. On being referred to exhibits C1 in PW2’s affidavit, the j DW confirmed that it is absolutely true that he was and still [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 676 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. is a director and chairman of CSTC and that his one vote a equals to 25% of votes casts. Again, on being referred to PW2’s affidavit, the DW confirmed that it was he who supplied all the documents an- b nexed to PW2’s affidavit on behalf of CSTC. DW1 also stated that whenever letters were addressed to CSTC by the GMB, they were made for his attention. c Whenever he complied with requirements of GMB on behalf of CSTC, he did not comply as a director of GMB. DW said in all honesty, all the directors of GMB, the company secretary of GMB and the entire management of Group d Merchant Bank Limited were aware of his interest and membership in CSTC and that his passport photographs is on the signature card and the offer letter was made for his attention. e DW stated that it is true that he was required by the management of GMB to supply the photographs. On being referred to the affidavit of PW1 (Miss Olusola Cole) DW confirmed that he signed and executed exhibit f P19 (the Code of Conducts). DW was also referred to page 2–18 of the minutes of GMB from 21st October, 1990 – 7th December, 1993 and said by g 7th December, 1993 all disbursements to CSTC had been made. Also DW was through page 1–18 and he said he was absent from the meetings of the board of directors of GMB on h 27th November, 1992 at page 67 and on 28th July, 1993 at page 93, but that those were the one occasion that he was absent from such meetings. DW confirmed that the issue of his interest in CSTC or in i the facilities granted by GMB was not disclosed to the board of directors of GMB. Under re-examination by the prosecution Counsel, DW was referred to exhibit 17 at page 102, which is the minutes j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 677 a of 17th December, 1993 of GMB, DW said it was he who supplied the document exhibited in paragraphs 5 and 6 of PW2’s affidavit in response to letters written by GMB to b CSTC. I consider it appropriate to reproduce the counter-affidavit of the accused. The counter-affidavit c I, Christopher Ikemeafuna Anyaegbunam, Male, Nigerian Citizen, Legal Practitioner of No 124, Norman Williams Street, South West, Ikoyi, Lagos do make Oath and state as follows:– 1. That I am the accused person in the charge herein. d 2. That at all times material hereto I was a director of Group Merchant Bank Limited. 3. That at all times material hereto, I was and I am still a director and Shareholder of Cobik Supplies and Trading Com- e pany Limited. 4. That by virtue of my aforesaid positions, I am familiar with the facts deposed herein and the circumstances of the matter herein. f 5. That Chief F.R.A. Williams, SAN informed me and I verily believe him that he was served with the four (4) Affidavits herein in support of the charge very late on Thursday the 14th day of December, 1995. g 6. That I have read the said respective Affidavits of James Ejue, (ASP) Ahmed Dikko (DSP) both of Nigeria police Force Headquarters, Lagos, and the Affidavits of Tijani Abdullahi the present executive director/chairman of Group Merchant Bank Limited, and Miss Olusola Cole the then h Company Secretary/Legal Adviser of Group Merchant Bank Limited. 7. That this counter-affidavit is variously in answer to the said respective affidavits. i 8. That for the purposes of clarity, all funds claimed at all times material hereto by Group Merchant Bank Limited as outstanding against Cobik Supplies and Trading Company Limited account with Group Merchant Bank Limited, including all interest payments thereon have been paid in full j without any interest waiver now shown to me and marked [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 678 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

exhibit CA1 is a true copy of the letter from Group Mer- a chant Bank Limited attesting thereto. 9. That the averments contained in paragraphs 4, 5 and 6 of the Affidavit of Tijani Abdullahi are true to the best of my b knowledge as far as they relate to the procedure for opening of accounts of corporate bodies with Group Merchant Bank Limited, the said procedure which Cobik Supplies and Trading Company Limited duly and wholly fulfilled. I reiterate and adopt the averments and disclosures therein con- c tained. 10. That the form CO2 stated as exhibited in paragraph 6 of the Affidavit of Tijani Abdullahi was not exhibited and is hereto attached and marked exhibit CA2. d 11. That I reiterate for emphasis that I am and was the expressly designated sole signatory to Cobik Supplies and Trading Company Limited account and related matters with Group Merchant Bank Limited as evidenced in exhibit ‘D’ attached to the Affidavit of Tijani Abdullahi. e 12. Further and in addition to the foregoing averments in paragraphs 9, 10 and 11, Cobik Supplies and Trading Company Limited was required to and did pay a fee for a search to be conducted by or at the instance of Group Merchant Bank f Limited Secretariat into Cobik Supplies and Trading Com- pany Limited file at the Corporate Affairs Commission, Abuja. 13. That further to the averments in paragraphs 9, 10 and 11 g above Cobik Supplies and Trading Company Limited was required by Group Merchant Bank Limited to submit my passport photograph as further confirmation and identifica- tion of the said sole signatory of the said account, which passport photographs, as is the practice, was at all material h times attached to the mandate card as exhibit, exhibited in the Affidavit of Tijani Abdullahi as exhibit ‘C4’. 14. That for purposes of clarity, all documents relating to the said account with Group Merchant Bank Limited stated in i the Affidavit of Ahmed Dikko DSP, and the Affidavit of James Ejue (ASP) as having been recovered were recovered from the Corporate Affairs Commission, Abuja and, or Group Merchant Bank Limited and not from Cobik Sup- plies and Trading Company Limited nor from me. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 679 a 15. That at all material times hereto, Tijani Abdullahi was neither a member of the board of directors of Group Merchant Bank nor was he a member of the management of Group Merchant Bank Limited. b 16. That at all material times hereto, all correspondence from Group Merchant Bank Limited to Cobik Supplies and Trad- ing Company Limited relating to Cobik Supplies and Trad- ing Company Limited account with Group Merchant Bank c Limited were made for the attention of “CHRISTOPHER ANYAEGBUNAM” as evidenced by exhibit ‘A’ attached to the Affidavit of Tijani Abdullahi. 17. That for purpose of clarity all applications for funds disbursements, with out exception, were preceded by discus- d sion and written application to the managing director/chief executive Officer of Group Merchant Bank Limited duly signed by me as director/sole signatory of the said Cobik Supplies and Trading Company Limited account as evi- e denced by the exhibits attached to the Affidavit of Tijani Abdullahi. 18. That in answer to paragraph 10, of Tijani Abdullahi’s Affi- davit, and for clarity it is hereby stated that the total disbursements to Cobik Supplies and Trading Company Lim- f ited amount to between N7,200,000 (Seven Million, Two Hundred Thousand Naira) and N7,900,000 (Seven Million, Nine Hundred Thousand Naira) but less than N8,000,000 (Eight Million Naira). g 19. That I swear to this counter-affidavit in good faith and con- scientiously believing the same to be true to the best of my knowledge and belief and in answer to the charge herein. On 27th December, 1995 after the cross examination of DW h by the prosecution which was followed by a short re- examination by the defence Counsel, Mr Delano, the De- fence closed their case. On 29th January, 1996, Chief Williams (SAN) the leading i defence Counsel made an oral address before the Tribunal. Chief Williams began his oral address by adopting his supplementary written address of 3rd January, 1996 to which the prosecution had raised no objection against its use j by the defence. Chief Williams then proceeded to highlight [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 680 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. some essential points in the supplementary address of 3rd a January, 1996. Then on 7th February, 1996 the prosecution made their oral address which was followed by a response from the de- b fence. The essential points raised by the defence as well as the prosecution in both written and oral addresses may be summarised thus. c With regard to the supplementary address filed by the defence, Chief Williams submits that the points raised therein go to the jurisdiction of the Tribunal to make a finding of d guilt on the charge against the accused person and as such it can be raised at any stage of the proceedings, even after judgment. It is submitted by Chief Williams that unless the prosecu- e tion succeeds in establishing that the Group Merchant Bank (“GMB”) is a body under the Banks and Other Financial In- stitutions Decree No. 25 of 1991 (hereinafter referred to as “BOFID”) all the charges framed against the accused must f collapse. Chief Williams points out that exhibit A2 of PW2’s affidavit is a Certified True Copy of the licence granted to GMB to commence banking business and that this licence was g granted under the provisions of the Banking Act, 1969. Chief Williams further points out that by section 62 of BOFID which came into force on 20th June, 1991, the Banking Act, 1969 ceased to exist and by section 2 of h BOFID no person could carry on a banking business unless it is duly licensed under BOFID. It is further submitted by Chief Williams that with the repeal of the Banking Act, 1969 under which exhibit 2A of i PW2’s Affidavit was granted and the coming into force of BOFID on 20th June, 1991, it became illegal for GMB to carry on banking business in Nigeria without being licensed in accordance with section 2 of BOFID, especially with j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 681 a regard to the fact that there is no saving clause or transitional provision in BOFID nor is the situation saved by the provisions of section 6 of the Interpretation Act, Cap 192 Laws of b the Federation. To further support his argument Chief Wil- liams refers to:– Kay v. Goodwin (1830) 6 BING 576; 130 E.R. 1403 Surtees v. Ellison (1829) 9B and C750, 752 or 107 c E.R. 228 Abaye v. Ofili (1986) 1 N.W.L.R. 134 at 146–147. It is further submitted by Chief Williams that there are no d provisions in BOFID from which it can be inferred that the legislation does preserve the right of any bank validly licensed under the repealed Banking Act to continue to carry on banking business notwithstanding the promulgation of the BOFID. e To buttress his contention, Chief Williams refers to section 2 of the BOFID and submits that by subsection (1) of this section no company incorporated in Nigeria should carry on f any business of banking unless it holds a banking licence issued under the BOFID and that subsection (2) of the section makes it punishable as a crime. Chief Williams submits that since that is a penal statute, the words used must be con- g strued strictly. On this point Chief Williams refers to Re HPC Produc- tions Ltd (1962) 2 Ch. 466 and The Gauntlet (1872) LR PC 184 at 191. h Also in support of his argument that a bank licensed under the Banking Act is not preserved by BOFID, Chief Williams turns to definition of the word “bank” in section 61 of BOFID and maintains that according to the plain and natural i meaning of the word “bank” in BOFID refers to a bank licensed under BOFID and not in any way a bank licensed under the repealed Banking Act of 1969. Chief Williams further argues that if it is intended to pre- j serve the operation of bank licensed under the Banking Act, [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 682 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

1969, there would have been a saving clause or transitional a provisions in that respect in BOFID as in the provisions of relevant legislation such as:– (1) Section 2 of the Banking Ordinance No. 15 of 1952 as well b as section 6 of the same Ordinance. (2) The Banking Ordinance No. 19 of 1958 which came into force on 1/1/95 – Sections 2 and 3(1) and (2) of the said ordinance. c (3) The Banking Act, 1969 which came into force on 7/2/69; See sections 7 and 41 of this Act. Concluding his submissions on this point, Chief Williams says:– d (1) That having regard to his submission, it is clear that under BOFID no company can run a banking business unless it is licensed under BOFID. (2) That the license of G.M.B. was issued under the repealed e Banking Act of 1969. (3) With the coming into force of BOFID on 20/6/91, GMB has been operating illegally as bank since it has no valid licence. f (4) That GMB is not a bank within the meaning of the definition of that word in BOFID. Further Chief Williams submits that to establish the offence in charge 1 which is framed under section 11(1) of the Bank- g ing Act, it must be proved that the licence is a valid licence. Chief Williams points out that by exhibit 1 of PW2’s affidavit GMB was incorporated on 28th August, 1990 and that since the licence held by GMB which is exhibit A2 of h PW2’s Affidavit was issued on 31st July, 1990, by the Fed- eral Minister of Finance, it means it was issued to a none existing body and going by section 2(1)–2(c) of the Banking Act the Minister had no such power as it is only an existing i body that can apply for and obtain a licence and so, exhibit A2 is invalid. Regarding the right of the defence to collaterally challenge the validity of an act or order, as for example by way of j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 683 a defence to a criminal charge, Chief Williams in support of his argument relies on:– (5) the view of Professor Wade at page 331 and at 349 of his b book “Administrative Law” 5th Edition where the learned author says the validity of an act or order can be construed by way of certiorari, declaration or by challenging it collaterally as by way of defence to a criminal charge. c Chief Williams further refers to the case of Peason v. Broadbent (1870) 36 C and P 485 in support of his point. In conclusion of his submission on his supplementary address Chief Williams maintains that none of the two charges d can be sustained against the accused since GMB is not a licensed bank under the Banking Act Cap 28 nor is GMB a “bank” within the meaning of that definition in BOFID. In his response, Mr Aliyu Umar states that by their sup- e plementary address, the defence have raised two important issues namely:– (1) Whether the GMB is a licensed bank both under the Bank- ing Act and under BOFID. f (2) Whether the licence exhibit ‘A2’ dated 31/7/90 at page 111 of the numbered documents having been issued before the incorporation of GMB is a valid licence. g On the first issue i.e. whether GMB is also a licensed bank under BOFID. It is submitted by Mr Umar that BOFID recognises licences issued under the repealed Banking Act like exhibit A2 at page 111 of the numbered documents. On this Mr Umar refers to section 9(1) and (2) of the BOFID in sup- h port of his argument. Mr Umar further submits that at any rate, the Tribunal must consider whether it is the intention of the BOFID to i render licence granted under the repealed Banking Act, invalid. The learned prosecutor submits that it is not the purposes of BOFID to render licence invalid having regard to the aim j of BOFID to improve on banking business in Nigeria. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 684 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Mr Umar further contends that even if there is no saving a clause in BOFID, the validity of exhibits A2 is saved by section 6(1)(b) and (c) of the Interpretation Act Laws of the Federation, 1990. Mr Umar also submits that the Tribunal b should consider that:– (1) the accused has benefitted from the operation of GMB; having said in his statement to the police that GMB is a bank and that he himself was and is still a director of GMB. c (2) Other people have also benefitted from the operation of GMB. (3) Assets have been acquired (4) Liabilities have been incurred. d For these reasons, Mr Umar submits, the question that the licence of GMB is invalid (i.e. exhibit A2) is just a technical question, it cannot be said that mere omission of saving clause in BOFID will render anything done by GMB as in- e valid. Mr Umar says that would not be the intention of the BOFID. f Mr Umar refers to the contribution of Eso, JSC at page 130 in The State v. Salihu Mohammed Gwonto (1983) All NLR 109 where Eso, JSC says reliance on technicality will lead to injustice. g Concluding his argument on the first leg of the supplementary address, Mr Umar urges the Tribunal to hold that GMB is a licensed bank under BOFID. On the second issue, Mr Umar contends that section (1) of h Banking Act proposes the issuance of a licence before incorporation and the only requirements are:– (1) the incorporation of the bank must be done in Nigeria; (2) that before the incorporation the Memorandum of Associa- i tion must be submitted to the Minister through the Central Bank of Nigeria (“CBN”), for approval. Mr Umar submits that it is not for the Minister to incorporate a bank but approve licence for bank. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 685 a Mr Umar submits that the most important requirement is that there is an application and the Minister has a discretion to grant the licence, reject the application or remain silent. b Mr Umar also refers to section 35(2)(a) of the Companies and Allied Matters Decree which deals with registration of companies and submitted that submission of a licence to Corporate Affairs Commission of a proposed bank is a con- c dition precedent. In conclusion, Mr Umar urges the Tribunal to hold that exhibit A2 is that licence granted to GMB to start business in banking. d Let me now resolve this issue. It is to be remembered that the issue of jurisdiction can be raised at any stage of proceeding. See Nigerite Ltd v. Dalami e (Nig.) Ltd (1992) 7 N.W.L.R. (Part 253) 288. However, it is better for a party to raise it timeously so that if successful it would save time of both the court and the litigants. f On the supplementary points, I agree with the learned Counsel for the defence that it borders on jurisdiction. However, it is very amazing very astonishing, very surprising, that this issue will be raised by the defence in an attempt g to extricate the accused. This is because:– (1) That throughout the proceedings it was disclosed that the accused is a Private Legal Practitioner. By virtue of this calling he is deemed to know the Law. h (2) The accused has also revealed in his statement to the police of 18/7/95 which is exhibit X to the Affidavit of PW4, James Egue that on graduating from the Nigeria Law School, Lagos in 1986 he started his law practice with the i chambers of Chief Williams. It is a matter of common knowledge that because of its unsurpassed reputation in legal practice in Nigeria it is a matter of pride for Counsel to be associated with that chambers. (3) It is also revealed by the accused in his statement to the po- j lice that he remained with the chambers of Chief [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 686 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Williams until 1991 when he left and set up his own cham- a bers. This is a sign of being groomed in both the Law and its practice. (4) It is further revealed by the accused in his statement to the b police that “I was a director of Group Merchant Bank Lim- ited from its inception and I am still a director as at the date of making this statement. This means that at the time the accused was made a director c of GMB, he was fully aware of the legal status of GMB and if that is so, I wonder why it is only now that the accused will frown at the validity of the licence of the GMB. It is however, said, wonders never end. d Let me now consider the two points raised in the supplementary address. The first issue is whether GMB is a licensed bank under the Banking Act, Cap 28. In answering this question one must first of all refer to the e provisions of sections 1 and 2 and 43 of the Act. By section 1 of the Banking Act a company can engage in banking business in Nigeria when:– f (1) That company is duly incorporated in Nigeria. (2) It is in possession of a valid licence so to do (3) That the licence is granted by a Minister authorised g in section 43(1). Under section 2, the manner of application for a licence is set out and the process with which such application under- goes before it is finally sailed through or refused. h To my mind, the issuance of exhibit A2, which is a licence granted to GMB and signed by the then Minister of Finance is an indication that as at the time exhibit A2 was granted the application of GMB in that regard had satisfied all the i requirements. It is clear from the face of exhibit A2 that it was issued on 31st December, 1990 and it is equally evidenced especially from the testimony of DW, the accused that the bank has not j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 687 a been idle. This means people like the accused have benefitted from its operation. It is also revealed during the proceedings that the GMB has b acquired properties and rights and liabilities, it will therefore be a mere academic or technical argument to even challenge the validity of exhibit A2 just because it was issued prior to the issuance of its certificate of incorporation. See The State c v. Gwonto 1983 (supra) at 130. On these two grounds alone the argument of the defence Counsel that GMB is not a licensed bank under the Banking Act, Cap 28 must crumble and it is accordingly discountenanced and brushed aside. d As to the question that GMB is not a bank within the meaning of section 2 of BOFID I agree with the submissions of the learned prosecuting Counsel that in order to find an answer to this question, one has to refer to the provisions of e section 6 of the Interpretation Act, and also examine the aims and purpose of BOFID. I agree with the leading defence Counsel that unlike the previous legislation on banking, BOFID has no specific sav- f ing clause. It is also clear as pointed out by the leading defence Coun- sel that the Banking Act under which GMB was granted a licence ceased to exist by June, 1991. g However, a careful reading of section 6 of the Interpreta- tion Act seems to me that the right of bank licensed under the Banking Act is protected therein. h Section 6 of the Interpretation Act provides:– “The repeal of an enactment shall not– (a) revive anything not in force or existing at the time when the repeal takes effect. i (b) affect the previous operations of the enactment or anything duly done or suffered under the enactment. (c) affect any right privilege or obligations or liability accrued or incurred under the enactment. and any such investigation, legal proceeding, or remedy may be j instituted, continued or enforced and any such penalty forfeiture or [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 688 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

punishment may be imposed, as if the enactment had not been re- a pealed.” In knowing the purposes for which BOFID is enacted or the goods which it is intended to attain the views expressed by b Dr Ajayi at pages 1–2 in his book titled “The Regulations of Banks and Other Financial Institutions”, are relevant. The learned author says, inter alia:– “The BOFID Decree and the CBN Decree seek to set up a com- c prehensive legal and supervisory framework for the banking and financial services industry in the country to remedy the inadequa- cies of the several pieces of legislation hitherto in place, providing for the regulation of the banking and financial services sector of the economy, of particular importance are the new provisions that d now bring under regulatory Control, the activities of non-banking financial institutions . . . The twin statutes in consideration create a more financial legal and transparent method of regulating banks.” e So having regard to:– (1) the implied saving provisions in section 6 of the In- terpretation Act; (2) the purposes for which BOFID was promulgated; f (3) the fact that BOFID came into existence in June 1991; (4) that GMB has continued to operate as a bank not- g withstanding the coming into force of BOFID without any challenge as to legal capacity to operate as a bank and thereby acquiring rights and liabilities; (5) number of people including the accused have been h and are still benefitting from its services. It will be absurd, preposterous, unfair and unjust to declare it illegal on a mere technical ground. See The State v. Gwonto (supra). i Like the first point raised by the defence in their supplementary address, the argument that GMB is not a bank under BOFID does not hold water. It is a mere technical argument which if it is allowed will lead to injustice. It should j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 689 a therefore be ignored in the interest of justice and fair play. The argument in this point therefore failed and it is rejected. Having thus resolved the two preliminary issues, let me b now turn to the charges framed against the accused. The issues raised by the defence in both written and oral address are as follows:– c “ON THE FIRST HEAD OF CHARGE. (1) That the essential elements of the offence created by section 11(1) of the Banking Act Cap 28 under which the accused is charged; d (a) The accused is directly or indirectly interested in an advance, Loan or credit facility or proposed advance or a loan or credit facility from the bank. (b) Interest of a bank director must be established. e (c) The interest must be direct as where he wants all the Money for his own use or where the borrower is a nominee of the directors.” It will be an offence where the director is a mem- f ber/shareholder of the company which sought or obtain the loan having regard to section 11(1)(a) of the Banking Act and section 79(3) of the Companies and Allied Matters Act, 1990:– g (2) That the argument of the prosecution to the effect that; (a) the accused has interest in a N2 million credit facility; (b) that the said credit of N2 million was granted by GMB to CSTC; and h (c) that accused has substantial share holding interest in CSTC, cannot ground a conviction having regard to section 11(2)(a). It is not shown that by the evidence of the prosecu- i tion witness not even the evidence of PW1 (Olusola Cole) that the accused had any interest in the loan nor is it shown that CSTC was a mere agent or nominee of the accused nor was it shown that the disbursements from GMB to CSTC j were questionable. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 690 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

For those reasons, the allegation has not been proved a against the accused, he must therefore be acquitted on this Head of charge. “ON SECOND HEAD OF CHARGE b (1) The allegation is that the accused has committed an offence contrary to section 18(3) and punishable under section 18 of the Decree. (2) To establish its case the prosecution must first of all estab- c lish that the director had personal interest in an advance, loan or credit facility or proposed advance, or loan or credit facility from the bank. (3) Personal interest does not include any interest claimed or held by the bank director as agent or trustee or nominee for d the benefit of someone else. (4) Personal interest claimed or held for him by someone else. (5) Although it is possible for the Tribunal to lift the corporate veil and regard a company as a device construed by an ac- e cused as an alias, it is not the case here as there is no such indication either in the charge nor under cross-examination of the accused. (6) It is a defence under section 18(4) if the interest of director f consists of being a member holding less that 5% shares of a company seeking the loan. (7) In this case when CSTC was incorporated both the accused and his wife held only one share each. (8) Hence, the Tribunal should hold that the accused is not g guilty because (a) it has not been shown that he has any personal interest in CSTC; (b) the prosecution did not present facts to justify lifting the h corporate veil; (c) being the substantial period covered by charge 8th No- vember, 1991 to 21/3/93 not by law treated as having personal interest in the facility granted to CSTC. i (9) The alternative argument is– (a) That since neither BOFID nor the Banking Act does provide any procedure for a bank director to declare his interest, notice of relevant interest in any form whatsoever given to the managing director or Secretary in any j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 691 a manner should be treated as notice to the Board of directors of the bank. (b) It is not necessary to make a solemn and formal declara- b tion to every bank director. (c) That evidence of the accused with special reference to the minutes of the Board of GMB held on 7/12/93 at pages 101–102 is relevant in this regard.” c In his response, the prosecution treated the two Heads of Charge together. It is submitted by the prosecution that the essential ingredients of the two charges are as follows:– d (1) That the person is interested in a loan or credit facility to be granted or proposed loan or credit facility. The interest is any manner whatsoever. (2) Failure to declare such interest to the Board of Directors e through the secretary to the bank. (3) That the accused person is a director of the bank granting the facility. (4) In case of charge 2, the director has personal interest in the f loan. In both cases it is a defence for the accused to prove:– (a) That he is only a member or creditor of the Company which is interested in the advance or credit facility. g (b) The Central Bank has regarded the interest as not material. Based on the unchallenged evidence of PW1, PW2, PW3 and the accused’s statement to the police exhibit X, it is proved that the accused is a bank director of GMB. h Also based on the evidence of PW1, PW2, PW3 and PW4, it is proved that the accused has personal interest in the facility in that:– (a) The accused is the sole signatory of CSTC Account. i (b) The accused has 21,000 ordinary shares while his wife had the rest. (c) That the accused is the life executive chairman of CSTC and his only one vote amounts to 25% of the vote cast at j any given moment – See exhibit C1. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 692 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

From the facts established every withdrawal issued by a CSTC has its validity resting on the accused person. Interest or personal interest like intention is a state of mind and this can either be proved by a declaration or inferred b from the conduct of the accused. In this case interest can be inferred from the conduct of the accused especially having regard to the fact that only the accused and his wife are the members of CSTC. c As regards non-disclosure of interest the evidence of PW1 and PW2 is referred to and that:– (1) The accused is aware that whenever he has interest in any d facility he was to declare it to the Board See exhibit 19. (2) Whenever a corporate body wishes to open an account with GMB it has to give certain information to the management of the bank. (3) The documents submitted by CSTC were in fulfilment of e that requirement. (4) Under cross-examination, PW1 stated that her office was aware of CSTC and that her office caused a search to be conducted at the Corporate Affairs Commission registry. f (5) That the accused never gave a notice of his interest in CSTC either to the Board nor to the Secretary even though he was absent from such meeting on only 2 occasions. (6) So although the management of GMB may be aware of the g interest of the accused the Board was never aware of such interest as the documents submitted were for the purposes of opening account and the search conducted was for the purposes of ascertaining of the corporate existence of CSTC. h (7) That both section 11 of the Banking Act and section 18 of BOFID have prescribed mode of compliance and it can only be a defence if there was such compliance. (8) That the accused has failed to declare interest in the facility i granted to Cobik Supplies and Trading Company Limited by Group Merchant Bank. (9) The defence of the accused that he submitted documents with regard to declaration on opening of an account is not a defence at all. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 693 a In order to support his contention that compliance is necessary the prosecuting Counsel refers to:– (1) African Petroleum v. Owodunni (1991) 8 N.W.L.R. (Part b 211) 391 at 416–417. (2) Nasr v. Beirut-Riyadh (Nig) Bank Ltd (1968) ALL NLR 274 at 283. In order to support the contention that the accused has inter- c est in the facility the following lodgements and withdrawal were referred to:– (1) Exhibit F13 at page 143 which is a letter to issue– (i) N1,900 to his Law firm C.I. Anyaegbunam and Co; d (ii) N1,500 to be collected. (2) Exhibit F12 at page 165 which is an instruction to GMB to debit Account of CSTC and to issue a Bank Draft in favour of C.I. Anyaegbunam and Co, in the sum of N500,000. e (3) Exhibit 8 dated 29/4/91 which is an instruction to GMB to debit the Account of CSTC and issue a Bank Draft to the accused himself in the sum of N250,000. (4) Exhibit F7 at page 154 dated 12/4/92, which is an instruction by the accused to GMB to debit the Account of CSTC f as follows:– (i) N120,000 for the renovation of his office; (ii) N287,000 for purchase of Law Books. (5) As for lodgements, g (i) Exhibit F14 at page 120 which is addressed to GMB forwarding a cheque of N248,247 belonging to the accused to be credited to CSTC; (ii) Exhibit F15 dated 14/5/93 forwarding a cheque of h N50,000 belonging to the accused to be credited to CSTC. All these instructions were given by the accused in his capacity as the sole signatory to the accounts of CSTC. i In conclusion, the prosecuting Counsel urges the Tribunal to hold that all charges against the accused have been proved and find him guilty accordingly. Let me now consider whether or not the prosecution has j established the case against the accused person. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 694 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

ON THE FIRST HEAD OF CHARGE a This is an offence under section 11(1) of the Banking Act Cap 28 and punishable under section 11(7) of the same Act. b The ingredients of this offence are:– (1) The accused is a director of the bank granting the loan or facility. (2) The accused is a person interested in a loan or credit facility to be granted or proposed loan or credit facility. c It is clear from the evidence of PW1, PW2 and PW3 and the statement of the accused to the police as exhibit X that the accused was a director of GMB at the time material. d The evidence-in-proof of this fact has not been shakened under cross-examination. It is therefore established by the prosecution that the accused was a director of GMB at the time material hence the first requirement has been satisfied. e With regard to whether or not the accused has any interest in the facility granted to CSTC where he is the chairman, this can be gathered from the evidence of PW2, PW3 and PW4 by which it is shown:– f (1) That he, the accused person is the sole signatory to the Ac- count being maintained by CSTC with GMB. (2) That the interest could as well be inferred from the various disbursements by him see exhibit 13 at page 143, exhibit 8 g dated 29/4/91 at page 196, exhibit F7 at page 154 where he made various lodgements to himself from CSTC Account with GMB. (3) That the accused has 21,000 ordinary shares in CSTC of 1 each out of 26,500 ordinary shares leaving the rest to his h wife. (4) While he, as an Executive chairman, his one vote is equal to 25% of the votes cast. (5) Paragraphs 9 and 10 of PW2’s Affidavit is in the foregoing i at page 108, it can be concluded that the accused has interest in the facility granted to CSTC. With regard to his failure to declare interest to the Board in the facility, it is crystal clear from the evidence of PW1 and j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 695 a PW2 which is unshakened that the accused has failed to declare his interest in the facility granted to CSTC:– (1) It can be gathered from the evidence of PW1, Miss Olusola b Cole that the documents submitted by CSTC were for the opening of an Account and that the search conducted by the office of PW1 was intended to ascertain the Corporate en- tity of CSTC. (2) That from the meeting of the Board of GMB, PP3–106 at c no time had the accused disclosed such interest even though it is incumbent upon him so to do. Like wise there was no such formal declaration to the Secretary, Miss Olusola Cole. (3) The contention that such a declaration was made on 7/12/93 d by the accused as reflected at pages 101–102 at the Board meeting. It is clear that this was not a formal declaration envisaged by section 11(1) of the Banking Act. Since there is no formal declaration as required by section e 11(1) of the Banking Act the accused’s argument must fail. See African Petroleum v. Owodunni (supra) at page 416– 417. It is therefore clear from the foregoing that the prosecution f has proved the offence under First Head of Charge against the accused and he is therefore found guilty as charged and convicted accordingly. AS TO THE SECOND HEAD OF CHARGE g Which is a charge under section 18(3) of BOFID and punishable under section 18(3) of the same Decree. To prove this offence, the following ingredients must be established:– h (1) The accused was a director of GMB at the time material (2) The accused is a person interested in a loan or credit facility to be granted or proposed loan or credit facility. (3) Failure to declare such interest i As regard the first ingredient it is apparent from the unchallenged and uncontroverted evidence of PW1, PW2 and PW3 as well as the accused’s statement to the police exhibit X that at all time material he was a director of GMB. The j prosecution have therefore discharged this burden. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 696 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Concerning the issue of whether the accused has interest a and that interest is personal in the facility this is evident from the following:– (i) That he is the sole signatory to the Account of CSTC. b (ii) That of the 26,500 ordinary shares in CSTC the accused has 21,000 of 1 each while the remaining shares belong to his wife. (iii) In his capacity as the Executive chairman of CSTC his one c vote is equal to 25% of the vote cast. (iv) The following disbursements to himself from the Account of CSTC at GMB, show a clear personal interest exhibit F14 at page 170, exhibit 15 at page 172, exhibit 17 at page 177, exhibit 8 at page 135, exhibit F 12 at page 165, exhibit d F13 at page 163. From the foregoing it can be inferred that the accused has personal interest in the loan or credit facility granted to e CSTC. The third ingredient is failure to declare interest in such loan or facility to the board of directors. It is the contention of the defence that:– f (a) the submission of documents to GMB by CSTC during the opening of Account. (b) the reference made to the indebtedness of the accused to GMB during a Board meeting on 7/12/93 amounts to such a g declaration. However, it is clear from the meetings of the board at page 3 and evidences of PW1 and PW2 that no such formal declaration was ever made by the accused to either the Board or to h the secretary PW1 and that the documents supplied by the CSTC were for the opening of account and that the reference made to the accused’s indebtedness during the board meeting of 7th December, 1993 cannot be said to be a compli- i ance with the requirements of the law. Consequently, the accused has failed to discharge the obligation imposed upon him by failure to meet the requirements of the law as regard to the declaration of his interest j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 697 a in the facility granted to CSTC where he is the executive chairman. The prosecution have accordingly established the ingredi- b ents of the charge under section 18(3) of the BOFID and the accused is found guilty therein and convicted as charged, and convicted accordingly. Mr Majiagbe – We would like to make a plea of mitigation c of punishment. The Tribunal is enjoined to mitigate punishment under section 20(5) of the Failed Banks Decree No. 18 of 1994. d As I am just holding brief for Chief Williams (SAN), we urge this Tribunal to adjourn this matter so that the Chief can personally come to make the plea. We also urge that the accused be allowed to continue to e enjoy his bail. In the alternative, I want some time within which to consult the accused with a view to making the plea myself. f Mr Umar – On the question of giving indulgence to the Defence time within which the Defence can make a plea of mitigation, we oppose that application as it is just a mere application which does not require any lengthy argument. g The only time when this application can be made is where the accused appeals against the judgment and asks for bail pending appeal. Mr Majiagbe – In that case I will need about 30 minutes to h confer with the accused person. Mr Umar – We agree. Tribunal – This case is stood down for 30 minutes to en- i able the defence confer with the accused. Allocutus Mr Majiagbe – We have decided to address the Tribunal. The case is very serious, and the two j charges are grievous. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J 698 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

First Charge – Under section 11(1) of the Banking Act. a Sentence:– (a) Prison term not exceeding 3 years; b (b) Fine – N100,000; or (c) Both. This sentence of imprisonment should not be imposed. Granting loan itself is not an offence but due to situation in c the country it is. Second Charge – Under section 18(3) of BOFID Sentence:– (a) Prison term not exceeding 3 years; d (b) Fine of N100,000; or (c) Both. The accused person has paid the sum of money involved e plus interest totalling N22,000,000 as at September, 1995. Thus the bank has not lost anything. As of now the account is in credit to N2,000,000. f The accused is a legal practitioner of ten years standing and so his conviction is a stigma to him and that is, the sentence itself. The accused has never committed any offence he is a first g offender. Also the Banking Act has now been repealed. My prayer is that since there is an option of fine I urge the Tribunal to impose it. h Also, the accused has spent five months in detention, that is from July, 17th, 1995 to December, 7th 1995. The surety of the accused is not in Court, he is on sick bed i in Dublin, England. His mother is equally ill in hospital. The illness of his parents may not be unconnected with the detention of their son, the accused. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, KANO ZONE) Atiku J Federal Republic of Nigeria Ltd v. Mr Christopher I. Anyaegbunam 699 a The accused takes care of his parents as well as the bread- winner of the family. His own son is also at the hospital with a broken leg. b The BOFID provides a sentence of fine. We urge the tribunal to impose it instead of jail terms. When he was incarcerated at Alagbon Close two of his aunties died but he could not attend to their burial. c Also, the amount of expenses incurred is huge. I strongly urge the Tribunal to impose a sentence of fine instead of imprisonment. d Mr Umar (prosecution) – The accused was not convicted by any court of law. 2. The Loan involved in commission of the offence has been fully repaid. The repayment was commenced after a com- e plaint with the police. Tribunal – Having listened to the plea for mercy by Mr Ma- jiagbe (SAN) on behalf of the accused and having regard to the fact that he is a first offender and family man, and also f having regard to sign of remorse shown by the accused, the accused person is hereby sentenced as follows:– (i) First Head of Charge:– (a) Accused found guilty as charged and convicted accord- g ingly. (b) Sentence:– One (1) year imprisonment. (ii) Second Head of Charge:– (a) Accused found guilty as charged and convicted according. h (b) Thirty Thousand Naira (N30,000) fine or One year imprisonment in default. Tribunal – Judgment and sentence are read in the open Court. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

700 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

a Federal Republic of Nigeria v. Lord Chief Udensi Ifegwu and Others b FAILED BANKS TRIBUNAL, ZONE II, LAGOS

OPE-AGBE J

Date of Judgment: 19 MARCH 1996 Suit No.: FBFMT/L/ZII/IC/95 c

Banking – Offences – Granting credit facility without security – Breach of section 18(2) Banks and Other Financial Institutions Decree No. 25 of 1991 – Failure by Director to d declare personal interest in the credit facilities to Bank’s board – Breach of section 18(3) of the Banks and Other Fi- nancial Institutions Decree No. 25 of 1991 – Effect: section 18(9) Banks and Other Financial Institutions Decree No. 25 e of 1991 considered – Making of false accounting entries by understating customers indebtedness – Intent to mislead regulatory authorities – Section 438(b) Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – Offence – f Agency – Forgery of credit vouchers and making of false accounting entries – Employee doing so pursuant to management policy of bank and superiors’ instructions – Whether personally liable – Section 438(3) Criminal Code g Act Cap 77 Laws of the Federation of Nigeria, 1990 and section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) considered – Section 18(2) Banks and h Other Financial Institutions Decree No. 25 of 1991 – Grant of credit facilities without security – Penalty therefore – Fraudulent grant of credit facilities by bank to customer – Breach of section 516 Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 – Sentencing after convic- i tion – Failed Banks (Recovery of Debts) and Financial Mal- practices in Banks Decree No. 18 of 1994 (as amended) and Banks and Other Financial Institutions Decree No. 25 of 1991 – Relevant considerations j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 701 a Failed Banks Tribunal – Trial in absentia under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks Decree No. 18 of 1994 (as amended) b Facts First accused person was a major shareholder of Alpha Mer- chant Bank Plc, (hereinafter called the “defunct bank”) and c was a non-executive director. The second accused was the managing director/chief executive of the defunct bank and was a bosom friend and business associate of first accused. The second accused was also the relationship manager of the d account of the first accused. The third accused joined the bank in 1990 as general manager and later became executive director, responsible for overseeing the bank’s forex transactions. The fourth and fifth accused were general and assis- e tant general managers. The fourth accused was Head of Corporate banking, whilst the sixth accused was a staff in the Financial Control and Planning Division. Between 1988–1993, three customers of the defunct bank f Dubic Industries Limited, Udina Mix Farms Limited and D.U. Chemicals Limited enjoyed forex allocation and utilisations from the defunct bank. It transpired that the two companies in which first accused had interest over-utilised g forex without putting any Naira cover in place first as required by the defunct bank’s regulations. This meant that they enjoyed the forex utilisation without paying for them, thereby making same a credit facility. However, mandatory steps such as opening credit file for the customers were not h taken; in fact the customers never really applied for the forex utilisation. The forex facility granted to Dubic Industries Limited i amounted to US$2,962,062.89. In order not to attract regulatory attention, when monthly returns were rendered to the CBN/NDIC, the defunct bank’s management instructed the fifth and sixth accused persons to understate the indebtedness of the customers by making month end entries in their j accounts and reversing same back on the first day of the [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

702 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. following month. The entries were transferred to a block for a suspended debit account. After the Nigeria Deposit Insurance Corporation on regulatory examination discovered the irregularities, the accused b persons were charged to the Zone II of the Failed Bank’s Tribunal. The prosecution called ten witnesses in proof of its case. No case submissions made on behalf of the first and third–sixth accused persons were overruled. Both the first c and second accused were at large and were therefore tried in absentia. Whilst two witnesses testified on first accused’s behalf, second defendant neither led evidence nor was he represented by Counsel. The third–fifth accused persons tes- d tified for themselves respectively without calling witness. The sixth accused however rested his own case on that of the prosecution. e Held – 1. An undisputed fact in civil proceedings is deemed to be true and correct. The same also applies in criminal proceedings. In this case it was not disputed that as at the f time the forex was over utilised, it was not paid for in Naira. 2. The entries and reversals were part of management policy to mislead or tell lies to the Central Bank of Nigeria g or Nigeria Deposit Insurance Corporation. Whilst there was no financial loss to the bank as a result of the entries and reversals, the fifth and sixth accused persons acted under instruction in effecting same. h 3. Each loan/credit facility granted by defunct bank is expected to have a credit file containing some documents such as application for the facility, application appraisal memorandum, approval memorandum duly signed, offer i letter etc. Absence of all these including lack of security for an amount over N50,000 for both Udina Mix Farms Limited and D.U. Chemicals Limited show common design to allocate and utilise forex unlawfully. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 703 a 4. The instruction is a major policy of the defunct bank upon which its life depended because if the correct state of the affairs of the bank were sent to Central Bank of b Nigeria, the regulatory authority might decide to take a second look at the continued operation of the bank. The acts of making entries and reversals on the accounts of Udina Mix Farms Limited and D.U. Chemicals Limited c by the fifth and sixth accused persons were done in the process of carrying out instructions. 5. Obedience of unlawful orders is not a defence to a charge of conspiracy but in this situation where the prin- d cipal offenders (the Management) were not charged for the same offence, the fifth and sixth accused could not be convicted of conspiracy as they (the accused persons) could not have conspired with themselves. e 6. Conspiracy can be inferred from overt acts. In view of the abundant evidence of interaction between first and second accused and the mere fact of and allocation utilisation of forex by the companies of the first accused f without having Naira in place, an inference of common design between first–fourth accused persons is justified. 7. The third accused is shown to have joined the defunct bank in October, 1990. This fact notwithstanding by vir- g tue of exhibit 41 series (deal slips of forex acquisition by Dubic Industries Limited) prepared by him, he joined in the conspiracy that started between first and second accused persons since 1988, in the course of which fourth h accused person joined when he went to Corporate Bank- ing Division. The first, second, third and fourth accused persons are guilty in several of the counts as charged. 8. Per curiam i “The Court has a duty to sound it loud and clear that those who embark on destroying edifices that have been the only hope of the ordinary struggling workers should not go unpunished. By becoming distressed the defunct bank has caused sorrow to many and the Court would take this j into consideration to impose a sentence that will serve as [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

704 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

deterrent to others (id est, intelligent people wanting to use a their intelligence to cause sorrow to others).” First, second, third and fourth accused persons convicted, fifth and sixth discharged and acquitted. b

Cases referred to in the judgment Nigerian c American Cyanamid Co v. Vitality Pharmaceutical Ltd (1991) 2 N.W.L.R. (Part 171) 15 at 28 Clark v. The State (1986) 4 N.W.L.R. (Part 35) 381 at 394 d Daboh v. State (1977) 5 S.C. 197 at 222 Iriri v. Erhurhobara (1991) 2 N.W.L.R. (Part 173) 252 at 262 Onochie v. The Republic (1966) N.M.L.R. 307 e

Foreign R v. Clayton (1943) 33 Cr. App. R. 113 f R v. Greenfield (1973) 1 W.L.R. 151

Nigerian statutes referred to in the judgment Banks and Other Financial Institutions Decree No. 25 of g 1991, sections 18(2), 18(3),18(9), 19(1) Criminal Code Act Cap 77 Laws of the Federation of Nige- ria, 1990, sections 438, 516 h Evidence Act Cap 112 Laws of the Federation of Nigeria, 1990, section 20 Failed Banks (Recovery of Debts) and Financial Malprac- tices in Banks Decree No. 18 of 1994 (as amended), sections i 3(1)(b), 3(1)(c), 3(1)(d)

Counsel For the state: Dr S. Mosugu j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS)

Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 705 a For the first accused person: Mr P. Amaran (with him Mr O. Jolaoso for Prof. S.A. Adesanya, SAN) For the third accused person: Mr Bankole Aluko (with him b Messrs. A. Adegbonmire, Mordi and R. Odusola) For the fourth accused person: Prof. C.O. Olawoye (with him Messrs. A. Akintunde, O. Ibrahim, B.C. Udemadu and S. Okuwobi) c For the fifth accused person: Prof. Taiwo Osipitan (with the Messrs. I. Obrutu, S.D. Jatta and Mrs B.A. Adeyinka For the sixth accused person: Mr L.B. Lawal-Akapo (with d him Chief A.A. Mohammed) Judgment OPE-AGBE J: By an amended charge filed pursuant to an e order of this Tribunal made on the 25th October, 1995, the first, second, third, fourth, fifth and sixth accused persons were charged with the following offences:– Count 1 f That you Lord Chief Udensi Ifegwu (now at large), Jimi Adebisi Lawal (now at large), Tony Nnachetta, Jeff Fayomi, while being directors and or Managers of Alpha Merchant Bank Plc (now in liquidation) at Lagos, between 30th June, 1988 and 1st October, 1993 conspired to commit g a felony, to wit, fraudulently granting credit facilities to Dubic Industries Limited without lawful authority in contravention of rules and regulations of the said Alpha Mer- chant Bank Plc and the regulatory authorities (CBN/NDIC) and thereby committed an offence punishable under section h 516 of the Criminal Code Act Cap 77 Laws of the Federa- tion 1990 to be read with section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Financial Malprac- tices Decree No. 18 of 1994 (as amended). i Count 2 That you Ezekiel Adebayo Ajetunmobi and Adesina Oni- keku while being Managers and or Staff of Alpha Merchant Bank Plc (now in-liquidation) at Lagos, between 30th June, 1988 and 1st October, 1993 conspired to commit a felony, j to wit, with intent to mislead the Central Bank of Nigeria [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 706 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

dishonestly forged credit vouchers in favour of Udina Mix a Farms Limited a customer of the said Alpha Merchant Bank Plc – a Company in which Lord Chief Udensi Ifegwu who is also a director of the said bank has a substantial interest – and thereby committed an offence punishable under section b 516 of the Criminal Code Cap 77 Laws of the Federation of Nigeria, 1990 to be read with section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Financial Mal- practices Decree No. 18 of 1994 (as amended). c Count 3 That you Ezekiel Adebayo Ajetunmobi and Adesina Oni- keku while being Managers and or Staff of Alpha Merchant Bank Plc (now in-liquidation) at Lagos, between 30th June, d 1988 and 1st October, 1993 conspired to commit a felony, to wit, with intent to mislead the Central Bank of Nigeria dishonestly forged credit vouchers in favour of D.U. Chemicals Limited a customer of the said Alpha Merchant Bank Plc in which Lord Chief Udensi Ifegwu a director of e the said Bank has a substantial interest and thereby committed an offence punishable under section 516 of the Criminal Code Act Cap 77 Laws of the Federation of Nigeria, 1990 to be read with section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Financial Malpractices De- f cree No. 18 of 1994 (as amended). Count 4 That you Ezekiel Adebayo Ajetunmobi and Adesina Oni- keku while being Managers and or Staff of Alpha Merchant g Bank Plc (now in-liquidation) at Lagos, between 30th June, 1988 and 1st October, 1993, at Lagos while in the employ- ment of Alpha Merchant Bank Plc (now in liquidation) fraudulently made false accounting entries by dishonestly h understating the indebtedness of D.U. Chemicals Limited – a company in which Lord Chief Udensi Ifegwu – a director of the said bank has a substantial interest – with intent to mislead and did mislead Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation on the actual indebt- i edness unlawfully granted to the customer and thereby committed an offence punishable under section 438(b) of the Criminal Code to be read with section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Financial Malpractices Decree No. 18 of 1994 (as amended). j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 707 a Count 5 That you Ezekiel Adebayo Ajetunmobi and Adesina Oni- keku while being Manager and or Staff of Alpha Merchant b Bank Plc (now in-liquidation) at Lagos, between 30th June, 1988 and 1st October 1993 at Lagos while in the employ- ment of Alpha Merchant Bank Plc (now in liquidation) fraudulently made false accounting entries by dishonestly understating the indebtedness of Udina Mix Farms Limited c – a company owned by Lord Chief Udensi Ifegwu – a director of the said bank with intent to mislead and did mislead Central Bank of Nigeria and the Nigeria Deposit Insurance Corporation on the actual indebtedness unlawfully granted to the customer and thereby committed an offence punish- d able under section 438(d) of Criminal Code to be read with section 3(1)(b), (c) and (d) of the Failed Banks (Recovery of Debts) and Financial Malpractices Decree No. 18 of 1994 (as amended). e Count 6 That you Ezekiel Adebayo Ajetunmobi and Adesina Oni- keku while being Manager and or Staff of Alpha Merchant Bank Plc (now in-liquidation) at Lagos, between 30th June, f 1988 and 1st October, 1993, fraudulently forged credit vouchers with intent to mislead and did mislead the Central Bank of Nigeria on the indebtedness of D.U. Chemicals Ni- geria Limited to Alpha Merchant Bank Plc – a company owed by Lord Chief Udensi Ifegwu – a director of the said g bank and thereby committed an offence punishable under section 24(5)(d) of the Banks and Other Financial Institu- tions Decree No. 25 of 1991. Count 7 h That you Ezekiel Adebayo Ajetunmobi and Adesina Oni- keku while being Manager and or Staff of Alpha Merchant Bank Plc (now in-liquidation) at Lagos, between 30th June, 1988 and 1st October, 1993, fraudulently forged credit i vouchers with intent to mislead the CBN on the actual indebtedness of Udina Mix Farms Limited to Alpha Merchant Bank Plc (now in liquidator) owned by Lord Chief Udensi Ifegwu – a director of the said bank and thereby committed an offence punishable under section 24(5)(d) of the Banks j and Other Financial Institutions Decree No. 25 of 1991. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 708 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Count 8 a That you Jimi Adebisi Lawal (now at large), Tony Nnachetta and Jeff Fayomi while being Managers of Alpha Merchant Bank Plc (now in-liquidation) at Lagos between 30th June, b 1988 and 1st October, 1993, granted credit facilities to Dubic Industries Limited in the sum of US $2,962,062.89 (Two Million, Nine Hundred and Sixty-two Thousand Sixty-two Dollars, Eighty-nine Cents) (sic) now equivalent to N242,889,156.98 (Two Hundred and Forty-two Million, Eight Hundred and Eighty-nine Thousand, One Hundred and c Fifty-six Naira, Ninety- eight Kobo) without lawful authority in contravention of the rules and regulations of Alpha Mer- chant Bank Plc (now in liquidation) and the regulatory authorities (CBN/NDIC) and hereby committed an offence punishable under section 18(2) of the Banks and Other Fi- d nancial Institutions Decree No. 25 of 1991. Count 9

That you, Jimi Adebisi Lawal, (now at large), Tony e Nnachetta and Jeff Fayomi while being Managers of Alpha Merchant Bank Plc (now in-liquidation) at Lagos between 30th June, 1988 and 1st October, 1993, granted credit facilities to Dubic Industries Limited in the sum of US $2,962,062.89 (Two Million, Nine Hundred and Sixty-two f Thousand Sixty-two Dollars, Eighty-nine Cents) (sic) now equivalent to N242,889,156.98 (Two Hundred and Forty- two Million, Eight Hundred and Eighty-nine Thousand, One Hundred and Fifty-six Naira, Ninety- eight Kobo) without security in contravention of the rules and regulations of g Alpha Merchant Bank Plc (now in liquidation) and the regulatory authorities (CBN/NDIC) and thereby committed an offence punishable under section 18(2) of the Banks and Other Financial Institutions Decree No. 25 of 1991. h Count 10 That you Lord Chief Udensi (now at large) between 30th June, 1988 and 1st October, 1993, at Lagos while being a director of Alpha Merchant Bank Plc (now in-liquidation) i and also a director of Dubic Industries Limited was connected with the granting of credit facilities totalling US $2,962,062.89 (Two Million, Nine Hundred and Sixty-two Thousand Sixty- two Dollars, Eighty-nine Cents) (sic) now equivalent to N242,889,156.98 (Two Hundred and Forty-two Million, j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 709 a Eight Hundred and Eighty Nine Thousand, One Hundred and Fifty-six Naira, Ninety- eight Kobob only) to Dubic In- dustries Limited without declaring your personal interest in the said facility to the then Board of directors as required by b section 18(3) of the Banks and Other Financial Institutions Decree No. 25 of 1991 and thereby committed an offence punishable under section 18(9) of the same Decree. The prosecution called ten witnesses in proof of its case. A c no case submission made on behalf of each of the first, third, fourth, fifth and sixth accused persons was overruled and while the first accused person did not personally lead evidence from the witness box as he is being tried in absentia, d two witnesses testified on his behalf in defence of the charge against him. The second accused person who is also being tried in absentia neither led any evidence nor was represented by e Counsel. Each of the third, fourth and fifth accused persons testified in defence of the charge preferred against each of them. They called no witnesses. The sixth accused person rested f his case on that of the prosecution. At the conclusion of the accused persons’ case learned Counsel for the accused persons (the second accused person excepted) and the learned Counsel for the prosecution filed into the Tribunal and ex- g changed written addresses. The prosecution’s case is bipartite. The one dealt with offences charged in counts 1, 8, 9 and 10 involving the first, second third and fourth accused persons while the other h dealt with offences charged in counts 2, 3, 4, 5, 6 and 7 involving the fifth and sixth accused persons. The evidence adduced by both sides i.e the prosecution and i the defence was long winded. A witness was in the witness box for fourteen days, some others for lesser days. In an affidavit sworn to by one Rotimi Odusola in support j of the application for extension of time to submit written [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 710 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. address on behalf of the third accused person, the legal prac- a titioner in paragraph 9 averred as follows:– “A further constraint which we find presently relates to the evidence led viva voce delivered by 15 witnesses (10 for the prosecu- b tion and 5 for the defence) over a period of six hours of daily sitting from the 11th day of September, 1995 till 7th day of February, 1996 totalling about 60 days of testimony.” The addresses by learned Counsel are more or less books, c this is understandable considering the calibre of learned Counsel appearing in the case if I may borrow the words of one of the Counsel in this case; there are three professors of law, doctors of law and experienced legal practitioners de- d fending the accused persons. With six accused persons it is like trying six cases in one. With this judgment I would have written four major judgments in this proceedings not to talk of innumerable rulings. e However, in spite of all that have been stated above, a number of facts remain undisputed in this case. An issue of fact arises where a fact is maintained by one party and is controverted by the opposite party. Every dis- f puted question of fact is usually in issue in every proceedings. A fact is therefore said to be undisputed if it is unchallenged and uncontroverted by the adversary or opposite party or if the opposite party by his own evidence actually g confirms the fact already given in evidence or is silent where he should react to the statement of fact given in evidence. In civil proceedings such an undisputed fact is deemed to be true and correct. h I believe the same applies in criminal proceedings. See on this the cases of:– (i) American Cyanamid Company v. Vitality Pharma- ceutical Limited (1991) 2 N.W.L.R. (Part 171) 15 at i 28 F; (ii) Oyibo Iriri and others v. Eseroraye Erhurhobara and another (1991) 2 N.W.L.R. (Part 173) 252 at 262 C; j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 711 a (iii) Section 20 Evidence Act, Cap 112 Laws of the Fed- eration of Nigeria, 1990. It is not in dispute:– b “(1) that Alpha Merchant Bank Plc before it went into liquidation was incorporated in 1988. See Evidence of Aminu Dikko, the Company Secretary/Legal Adviser of Alpha Merchant Bank (PW1) and exhibit ‘B’ Certificate of Incor- c poration. (2) that Alpha Merchant Bank Plc. (hereinafter referred to as the defunct bank) was an authorised dealer in foreign currency. See exhibit ‘5’ – copy of licence to carry on banking business and the evidence of Alhaji Ibrahim Ofoagbe Ga- d ruba, Acting Deputy director Central Bank of Nigeria (CBN) seconded to Credite Bank Nigeria Limited as Execu- tive director (PW6). He testified that ‘Alpha Merchant Bank’ was an authorised dealer.” e PW1 on 12th September, 1995 testified as follows:– “I am aware that Alpha Merchant Bank has authority to deal in foreign exchange. I see exhibit ‘A’ paragraph 5 minutes of directors meeting held on 16/6/88. The sub-paragraph deal with banking licence, forex authorised dealership licence.” f Also in answer to suggestion put to Adekunle Adewoye Fagbure, AGM Credit and Legal of the defunct bank who still works for the defunct bank (PW9) by Mr Bankole Aluko learned Counsel for the third accused person under g cross-examination. PW9 stated as follows:– “Exhibit ‘41–41e’ cover the period 27th March to 4th September, 1991, it is correct that at the time, Alpha Merchant Bank was h authorised by the banking authorities to allocate forex to its customers.” (3) that the first, second, third, fourth, fifth and sixth accused persons were directors/ managers of the defunct bank. PW1 i in his examination-in-chief stated as follows:– “I know Jimi Lawal. He was the managing director of Alpha Merchant Bank Plc from 1988 to 1993. I know one Mr Macaulay Iyayi. He was the pioneer managing director of Alpha Merchant Bank Plc. During the time of j Iyayi, second accused was the Executive director of the [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 712 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Alpha Merchant Bank. I know Tony Nnachetta, third a accused. He was general manager of Alpha Merchant Bank Plc. I know fourth accused Jeff Fayomi, he too was general manager in Alpha Merchant Bank Plc. I know fifth accused Ezekiel Ajetunmobi, he was a general b manager in Alpha Merchant Bank Plc. I know sixth accused Adebayo Onikeku. I am not sure about his desig- nation but he worked in Alpha Merchant Bank Plc.” With regard to the first accused person, PW1 stated as fol- c lows:– “I know Lord Chief Udensi Ifegwu first accused. He was a director of Alpha Merchant Bank Plc from 2/6/88 to sometime in 1993.” d See also evidence of PW9 and the organogram of the defunct bank exhibit 20. All the accused persons through their Counsel did not challenge above evidence under cross- examination but in fact further confirmed the evidence in e their evidence in defence, the first and second accused persons excepted. With regard to the first accused PW1 stated under cross-examination as follows:– “It is correct that first accused is a non-executive chairman of Al- pha Merchant Bank Plc. He has never been a chairman of the f bank.” It was not disputed that he was a director of the defunct bank though non-executive director. See exhibits C–C3 particulars of directors obtained from the Corporate Affairs Com- g mission, Abuja wherein the names of Mr Jimi A. Lawal and Lord Chief D.U. Ifegwu are reflected as directors of the defunct bank. In exhibit 13, Copy of letter of the first accused to the h Governor of CBN he stated in paragraph 1a as follows:– “By virtue of the investments made by my associates and me in the equity of Alpha Merchant Bank Plc., I was elected a non- executive director on the board of the Bank.” i It is therefore not in dispute that first accused was a director of the defunct bank:– (4) that the banking licence of the defunct bank was revoked by publication in the Official Gazette of the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 713 a Federal Republic of Nigeria No. 9 Volume 21 of 8th September, 1994. See exhibits D–D1 titled “Revoca- tion of Licence – Alpha Merchant Bank Plc., United b Commercial Bank Limited; (5) that an Interim Management Board took over the management of the defunct bank. See exhibit 13 (supra) Para. 1c and the evidence of accused persons; c (6) that the first accused person maintained accounts with the defunct bank through his companies some of which were Dubic Industries Limited (DIL), Udina Mix Farms Ltd, D.U. Chemical Ltd and Af- d rica Pulp and Paper Mills Ltd; (7) that the first accused person over-utilised foreign exchange for which he did not provide equivalent naira cover for the amount. The prosecution contended e that it was to the tune of US$2,962,062.89 while the defence contended that it was to the tune of US$1,955,064.43. The evidence of PW9 and the admission in evidence of ex- f hibits 48–48a and ’49, Telex from Bankers Trust Company, London and Telex from BIAO Afribank Hamburg show utilisation of forex by Dubic Industries Limited. In his evidence of 6th October, 1995 PW9 stated as fol- g lows:– “First accused was informed about the unauthorised overdraft in respect of at least some of the companies. I believe he was informed orally. Copy of letter dated 26/10/92 addressed to first ac- h cused was tendered and admitted in evidence as exhibit ‘51’. The letter is dated 26/10/92 from the defunct bank to the managing director Dubic Chemicals Ltd. It is headed Unauthorised Overdraft Account 0012204D0002901 and signed by one Adani Leigh, Loans and Advances Department and Solomon Abekhe Manager i Loans and Advances Department. The body of the letter reads as follows:– ‘We refer to your above mentioned account and wish to inform you that your outstanding balance (which arose due to forex allocations) currently stands at N927,435,51DB as at j 26/10/92. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 714 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

We request that you forward to us your cheque for the a above amount to regularise the account’.” By exhibit 52 the fourth accused person also referred to the deficit dollar position of Lord Chief Ifegwu, the first ac- b cused. The letter is undated. Photocopies of three cheques of Dubic Industries Limited, Union Bank, Aba payable to the defunct bank would suggest that they are post-dated cheques. They are dated 30th March, 1992, 30th April, 1992 c and 29th May, 1992. The letter of fourth accused addressed to Jimi, the second accused reads as follows:– “Dear Jimi, d Please find enclosed photocopies of cheques received from Lord Chief Ifegwu. Apart from the deficit Dollar position, he is owing us about N24 million and I should be grateful if you will push him to do better than this. Sorry to bother you on two other issues:– (1) Nike’s unemployment. e (2) Ezobi’s indebtedness. I need my money. (Signed)” There is nothing in the above letter to suggest it is from the f fourth accused but PW9 through whom it was tendered and admitted in evidence in his testimony stated as follows:–

“Someone showed concerns about the account being overdrawn. g Mr Fayomi was concerned because he wrote to Jimi, second accused. I saw photocopy of the writing. The document shown to me is what I saw. It has an attachment.”

Dr Mosugu sought to tender it. It was admitted as exhibits h 52–52a without objection from all learned defence Counsel. In his evidence on 6th February, 1996 under cross- examination by Dr Mosugu the fourth accused stated as follows:– i “I see exhibit 52. It is correct I wrote Jimi Lawal to put pressure on Lord Chief to reduce the dollar deficit. The dollar deficit appears in exhibit 88, the dollar deficit is the sum of US$1,955,064.43 being the over-utilisation on all Lord Chief’s account combined. Ex- hibit 88 and 88b reflect this.” j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 715 a Also under cross-examination by Prof. Olawoye for the fourth accused person on 10th January, 1996 the third accused person stated as follows:– b “I believe our objective when we went for that meeting was to re- trieve the dollars that were allocated to the first accused or to have him buy dollars for the bank as it were. The primary position was that Lord Chief Ifegwu has over-utilised the dollar he is entitled to, that was the problem that was the position then.” c PW9 on the other hand consistently in the evidence-in-chief and under cross-examination stated that exhibit F which he prepared shows utilisation of forex by the first accused through his companies. The first accused himself in exhibits d 38–38a letter dated 26th October, 1993 addressed to the defunct bank headed “Outstanding Indebtedness to Alpha Merchant Bank Plc” confirmed Dubic Industries Limited indebtedness in the sum of US$2,962,062.89 and another e sum of US$251,180 bringing the total to US$3,213,242.89. In exhibit 39–39a also headed “Group Indebtedness to Al- pha Merchant Bank Plc”. The first accused admitted a global shortfall of US$1,955,064.45 which quote “we are anxious f to settle in good faith provided that the major unsettled disputed issue of naira foreign exchange rate can be agreed.” At page 2 paragraphs 5, the company through the first accused stated as follows:– g “Please once we reconcile the above matters, we will effect payments without further delay, you will also note that, to show our goodwill on our part, we gave the bank already N5,000,000 as part payments, pending final agreement with you.” h For non-payment of the overutilised forex I once again refer particularly to page 9 under the heading – “Indebtedness to Alpha Merchant Bank Plc”. It reads as follows:– “As you well know and as discussed briefly at page 6 of this letter, i as soon as the Interim Management Board of Alpha Merchant Bank Plc. informed me of various foreign exchange transfers that were not debited to our accounts, we set about reconciling my companies’ account relationships with the bank. During the process of this reconciliation, it was discovered that several transac- j tions, spread over a five-year period, had been effected without the [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 716 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

corresponding naira debits being passed through my companies’ a accounts etc.” Kenneth Chimaroke Uwadiwe Ogbonna (DW1) stated as follows on 13th December, 1995 in his examination-in- b chief:– “It is correct when we got exhibit ‘F’ we wrote exhibit ‘G’ and having made two previous payments we made a further 16.5Million was paid. N16.5 Million represents the settlement in c respect of the overutilisation that we have been in correspondence. The over-utilisation as itemised in exhibit ‘F’ it is correct com- prises principal and interest” etc. Mark Pammaj Sodo CSP attached to Anti Fraud section, FIIB, Alagbon Close, Ikoyi, Lagos (PW3) in his examination in- chief on 14/9/95 stated that he was d assigned to investigate large scale fraud and stealing by the first and second accused persons in connivance with the third, fourth, fifth and sixth accused persons. Amongst other evidence he stated as follows:– e ‘On 1/11/94 first accused person walked into my office and said that he had made a payment of N16.5Million to Alpha Merchant Bank in redemption of money collected by the first accused person from the bank. He wanted to make a statement to that effect to me’.” f The statement was admitted as exhibit U. The first accused had earlier made a first statement admitted by consent as exhibits P–P1. Continuing his evidence PW3 stated under cross-examination by Prof. Adesanya, SAN the first ac- g cused’s Counsel:– “We asked for the document relating to the loan. There was no documents showing that he applied for any loan, I made inquiries whether he applied for loan from other sources but there are no h documents but there are documents to show that he collected money which he did not pay for. The money was given to him in dollars but he did not pay the naira equivalent. I was shown documents which show that dollars were sold to him but he did not pay the naira equivalent.” i See also exhibits 39–39a (supra). The point being made here is that it is not in dispute that as at the time the forex was over-utilised it was not paid for in naira. I shall examine the reasons adduced for this lapse later on in this judgment. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 717 a The undisputed facts highlighted above relate in the main to the first leg of the prosecution’s case. With regard to the second leg, the following facts are also undisputed:– b (1) that the decision making bodies in the defunct bank are the board of directors committee and the Management Commit- tee. Audu Kwasau Abashiya (PW4) chairman of the defunct bank cross-examined by Mr Lawal-Akapo for the sixth accused person stated as follows:– c “Final decisions in Alpha are taken by the Board. It is the highest decision making body in Alpha. It is com- posed of the MD and five other directors some could be executive and some could be non- executive.” d (2) that there were month-end entries in vouchers and reversals. PW9 in his examination in chief stated as follows on 6/10/95:– “I see exhibits ‘16’ and ‘17’ vouchers relating to month- e end entries and their reversals at the beginning of such months . . . I cannot identify the signatures in exhibits ‘16’ and ‘17’ or who made them. As at the close of business on the f day any of the credit entries were made it does not show a true state of the account.” (3) that the month-end entries and reversals was the result of a deliberate and conscious policy of the management. g PW9 cross-examined by Prof. Osipitan on 20th October, 1995 stated as follows:– “I see exhibits ‘16’ and ‘17’. They are credit and debit vouchers. They are Alpha’s vouchers. They are credit vouchers – entries and h reversals. I see exhibit ‘61’. My statement to the police. I agree with you that the entries and reversals contained in exhibits ‘16– 16f’ and ‘17–17a’ were made by the makers as a result of Man- agement’s instruction and approvals. It is correct that the entries and reversals did not involve any loss. Alpha did not incur any fi- i nancial loss as a result of the entries and reversals. Alpha was not defrauded.” Earlier in his evidence under cross-examination by Prof. Osipitan for the fifth accused person, Yemi Ogunjemilusi, j Superintendent of Police in the Fraud section Federal [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 718 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Intelligence Investigation Bureau (“FIIB”) Alagbon, Ikoyi a PW2 stated as follows:– “It is correct that there were entries and reversals. The bank did not sustain any loss in monetary terms.” b Cross-examined by Mr Lawal-Akapo for the sixth accused person PW2 stated as follows:– “There was no property loss.” In his statement to the police – Exhibits S–S1 – the sixth ac- c cused person confirmed making the entries in order to reduce the debit balances on the accounts on the first day of the month and reversing the entries out of the account on the first day of the following month in compliance with man- d agement directives through the Financial Controller and that the entries do not in any way involve the movement of cash or has any bad effect on the profit of the bank. It was just mere paper work with the instruction and authority of the e Management through the Financial Controller Mr Ezekiel Adebayo Ajetunmobi i.e. the fifth accused person. In his statement, the fifth accused person confirmed that he is aware that monthly entries are raised to reduce loan portfo- f lios but he did not remember giving specific instructions that the entries in question be raised. In his reply to no case submission on behalf of the fifth and sixth accused persons which Dr Mosugu incorporated in his g written address, the learned Counsel on submissions made on 20th November, 1995 on Counts 2, 3, 4, 5, 6 and 7 conceded the following:– (i) that Counts 2, 3, 4, 5, 6 and 7 are many counts that should h have been compressed into two counts; (ii) that there seems to be no financial losses to Alpha Merchant Bank as a result of the charge in Counts 2, 3, 4, 5, 6 and 7 and that no money or moneys was moved in the entries; i (iii) that from the evidence on record both oral and documentary it was part of Management Policy at Alpha at the time to tell lies to CBN or NDIC the regulatory authorities; (iv) that both the customers Udina Mix Farms Ltd and D.U. Chemicals as well as the Board of directors of Alpha might j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 719 a not know about this figure manouvres and for that matter third and fourth accused persons even though part of the Management might also not know; b (v) that the fifth and sixth accused persons acted under instructions and anybody in their positions might not have done otherwise. But learned Counsel queried whether there was financial gain to either the fifth or sixth accused persons or both of them as a consequence and whether anybody in c their positions might have done otherwise. Consequent upon the undisputed facts referred to above, the prosecution’s case is that in the overutilisation of foreign exchange (dollars) the first, second, third and fourth accused d persons conspired together to grant credit facilities to Dubic Industries Ltd without lawful authority and in contravention of the rules and regulations of the defunct bank and the regulatory authorities CBN/NDIC and that in granting the first e accused credit facilities to the tune of $2,962,062.89 the first accused as a director of the defunct bank and a director of Dubic Industries Ltd was connected with the granting of the credit facilities to Dubic Industries Ltd without declaring his f personal interest in the said facility to the then board of directors of the defunct bank as required by the appropriate law. g With regard to the second leg of the prosecution’s case and having regard to the concessions of the learned prosecuting Counsel, I am of the humble view that counts 3, 4, 5 and 6 could be subsumed in Counts 2 and 7 and the facts of the allegations contained in the said counts should be used as h materials to establish the prosecution’s case. I am therefore in agreement with the submissions of Dr Mosugu, the prosecutor that the counts should have been compressed into two. With the concessions that the entries and reversals was part i of management’s policy to tell lies to CBN or NDIC, that there was no financial loss to the defunct bank as a result of the entries and reversals, and that the fifth and sixth accused persons acted under instruction, the issues relating to the j fifth and sixth accused persons have been considerably [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 720 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. narrowed down to the contents of their statements which the a prosecution tagged as confessional statements. The defences of the first, third, fourth, fifth and sixth accused persons in brief could be classified as set out at pages b 7 to 9 of the written address on behalf of the prosecution namely:– (i) Computer failure. (ii) Pressure of work. c (iii) Backlog of postings. (iv) Non-integrity of exhibits ‘29’ and ‘34’ and other computer print-outs of Dubic’s statement of accounts. (v) Failure of prosecution to supply certain documents re- d quested for under subpoena. (vi) The bank’s mistake or error which led to dollar over- utilisations. (vii) Non-application for dollars or credit facilities. e (viii) Obeying superior orders. (ix) Charge as formulated incurably bad. I want to go about the prosecution’s and accused persons’ case by identifying facts common to both parties apart from f the undisputed facts already highlighted in this judgment and then relate them to the issues of law canvassed by the opposite parties. The starting point would have to be the deal slip – Exhibits g 41–41e – otherwise referred to as the 41 series. There is a misconception by one or two learned defence Counsel about what I said in the ruling on no case submissions with regard to the 41 series. I never conveyed the im- h pression that they signify utilisation but even if as a result of typographical error such word appeared, the third accused person from whose department deal slips originated stated on 12th January, 1996 under cross-examination by Dr Mo- i sugu as follows:– “Allocation and utilisation go hand in hand in the forex process, they are two sides of a coin.” The third accused was commenting on a deal slip. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 721 a If the full text of the ruling on deal slip was carefully read then it will be appreciated that I was talking of sale of foreign exchange not utilisation but then one cannot completely b divorce a deal slip from utilisation. One cannot utilise what one has not bought. I am saying this in the context of forex as it relates to deal slip. If that happens something must have gone wrong. So if one says c deal slips signify utilisation one cannot be too far from the truth. Page 13, last paragraph to page 14, paragraph 1 of the ruling read as follows:– “Above questions arise from information contained in the deal d slips – Exhibits ‘41–41a’ to ‘41e’ minus exhibit ‘41d’ and exhibits ‘48–48a’ telex message from Bankers Trust Company, London and exhibit ‘49’ telex message from BIAO Afribank Hamburg showing that utilisation of the funds – foreign currency – has been e effected. Exhibits ‘41–41a’ to ‘41e’ minus exhibit ‘41d’ were approved by the third accused person as testified to by PW9. Exhibit ‘41’ shows that Alpha Merchant Bank sold the foreign ex- f change stated therein to the customer Dubic Industries Ltd . . . etc. The source of the fund is by auction. The other deal slips contain similar information as to name of the customer, who sold, foreign currency and amount, rate, naira amount, dollar equivalent, the naira account to debit, whom to pay the foreign currency, the g source, dealers name and who approved. Exhibits ‘48–48a’ show on the face of it that Dubic Industries Limited is the importer and that Alpha Merchant Bank Lagos transferred the money.” h The full text on the 41 series show sale of or acquisition of or purchase of forex by Dubic Industries Limited. In starting with the 41 series, I need to emphasise the im- i portance of deal slips in the process of forex allocation. cross-examined by Dr Mosugu on 8th February, 1996 the fourth accused person stated as follows:– “I see exhibit 41 series. I agree that each one of the exhibit ‘41’ se- j ries is a complete forex transaction.” [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 722 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

In other words the sum of US$2.44Million contained in all a the 41 series had been sold to, purchased by, acquired by Dubic Industries Limited. The prosecution’s case as testified to by PW1 Aminu b Dikko, Company Secretary/Legal director of the defunct bank amongst other evidence included the tendering of the board of directors minutes book of the defunct bank. It was admitted as exhibit A. c PW1 stated that as far back as 1988 it was brought to the Board’s attention that D.U. Chemicals was being given facility at which point the interest of Chief Ifegwu was noted. d With regard to Dubic Industries, documents were brought to his attention showing that the company had benefitted from forex disbursement of about US$1.9million without paying the naira value. PW1 stated that there are procedures in the defunct bank for granting facilities to anybody or compa- e nies. Any customer applying for a credit facility usually submits a letter to that effect in writing. The letter will go before the managing director (“MD”) who will subsequently forward such a letter to the Credit Department for appraisal f and once the application is appraised and found to be viable it will be sent for the necessary approval signatures subject to the credit limits of each approving officer or body. g PW1 stated further that Dubic Industries case is a forex transaction and a customer who wishes to buy forex is usually supposed to deposit the naira equivalent to such amount before any foreign currency is allocated or remitted for such h use in which case this indebtedness to the company should not have arisen at all. There was no prior deposit of naira equivalent of the forex by Dubic Industries before the transaction. According to PW1 in banking term it is called unauthorised facility. The enjoyment of the credit facility by i Dubic Industries was not approved by the board of directors and to the best of his knowledge the facility was not presented to the board of directors and forex facility was not secured by first accused, and he did not recall that first j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 723 a accused presented the request for forex facility in writing. PW1 stated that the MD, second accused had to give approval for the facility considering the magnitude of the b amount involved. The procedures manual for the grant of facility was approved at the thirty-fourth board of directors meeting held on 12th December, 1991 but there was non-compliance with c the procedure in the manual as far as granting facility to Dubic Industries was concerned. PW1 stated that he did not think there was a naira deposit before the facilities in dollars was given to Dubic Industries, d Cross-examined by Prof. Adesanya, SAN for the first accused person, PW1 stated that it is correct that a director only discloses his interest when he applies for a loan, that he e has no evidence that first accused applied for financial indulgence amounting to US$1.9Million, that he has no evidence oral or written that first accused or any of his companies applied for loan amounting to block foreign exchange, f that he is not aware that first accused had about 280 entries of forex transactions with the bank between 1989 and 1992. The following documents were tendered through PW1 under cross-examination by Prof. Adesanya:– g (i) Statement of account in respect of Dubic Industries Limited admitted as exhibits ‘E–E6’; (ii) Copy of letter dated 21/12/93 by the defunct bank signed by A.A. Fagbure with attachments admitted as exhibits ‘F–F5’; h (iii) Copy of letter dated 12/1/94 from Dubic Industries Limited to the MD/CE of the defunct bank signed by first accused admitted as exhibits ‘G–G5’; (iv) Copy of letter dated 24/2/95 from Dubic Industries Limited i addressed to NDIC admitted as exhibits ‘H–H3’. PW1 stated that to the best of his knowledge the bank never wrote, challenging the assertion of first accused in exhibit G, assertion which includes an allegation that the bank failed to j debit his account. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 724 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Cross-examined by Mr Bankole Aluko for the third ac- a cused, PW1 stated that third accused was not a member of the defunct bank in June, 1988, he did not join the bank till October, 1990 and when he joined the defunct bank, he b joined as head of treasury division, and throughout the period he (PW1) was in the defunct bank, the third accused worked in the treasury division alone. PW1 stated that at the defunct bank the loans and advances c department was not in the treasury division, it fell under Corporate Banking Division (“CBD”) and third accused was never at Corporate Banking Division, he was never a member of the Board Credit Committee whose function was to d consider and approve all credit proposals that were in excess of the MD’s limit. The following documents were tendered through PW1 under cross-examination by Mr Bankole Aluko:– e “(i) Copy of minutes of Management Credit Committee held on 18/3/93 admitted as exhibit ‘J–J2’; It is minutes of the Committee held on 18/3/93; (ii) File on Management Credit Committee admitted as exhibit f ‘K’. It gives an indication of the matters to be considered between the time of application for a credit and its grant but not the procedure; (iii) Minutes of the Extra-ordinary Management Committee g meeting held on 20/7/93 admitted as exhibit ‘L–L8’. accused was the Chairman of the committee and Mr A. Fag- bure and himself (PW1) were members; they both attended the meeting which took place on 20/7/93 just before the defunct bank was taken over by the CBN; h (iv) Copy of memo dated 28/5/95 admitted as exhibit ‘M–M4’ exhibit ‘M2’ shows indebtedness of each director.” PW1 stated that credit facility is any financial accommodation that is given to a customer of a bank which could be in i form of direct loan of money or other financial facility like continuing facility. The witness agreed with Counsel that the ascendancy of third accused from assistant general manager in 1990 to executive director in 1993 was based on merit. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 725 a He has no recollection of any occasion when the third accused or the Treasury Division on which he headed was queried or indicted. PW1 agreed with Counsel that the third ac- b cused was never an account officer, a relationship officer, a supervisor, a manager or person with any relationship whatsoever with any of the first accused person’s companies. Cross-examined by Prof. Olawoye for the fourth accused c person, PW1 stated as follows:– (1) that his report of irregularities to the board did not include Dubic Industries account; (2) that the reaction of the board was limited to admonishing d management but he continued to give periodic warnings in writing and at board meetings verbally; (3) that the inability of the board to solve the problems was due to the fact that most of the directors were indebted to the bank and the debts were either irregular or not secured in e which case the board will not have the moral courage to insist on stringent measures necessary to stop the abuses; (4) that other reasons may be that the system was not perfectly in place; f (5) that the board credit committee did not meet more than four occasions from 1989 to 1993. The committee’s function was to consider and approve credit facility within certain limits; g (6) that meetings were not summoned because there was no directive from the chairman to him to summon meetings; (7) that procedure manual was codified and approved around December, 1991 and that absence of procedure manual led to some of the problems; h (8) that because each employee came with his own banking experience and procedure coordination could not be easy and agreed that lack of coordination may lead to errors without criminal motives; i (9) that many of the directors were customers of the bank, if any transaction relating to any director was being considered it was not unusual that they insist that the transactions be carried out in a more shorter period than it would have been done for other customers and it is possible that under j such pressure mistakes would occur; [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 726 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

(10) that first accused is a big customer of the bank but he can- a not describe second accused as a big customer of the bank but he has companies which are customers of the bank; (11) that first accused is also a shareholder in the bank but can- b not say if he is the biggest shareholder of the bank; (12) that second accused was in good relationship with the first accused in the bank, that they have business relationship together, they are both directors in Alpha Merchant Bank Plc and Alpha Properties Ltd and Alpha Sofitel Ltd. c Cross-examined by Prof. Osipitan for the fifth accused person, PW1 stated as follows:– (1) that the fifth accused person who joined the defunct bank in 1990 worked in the Financial Control and Planning De- d partment since and not in any other department, was not involved in the granting of loan or any facility or in approval or remittance of forex; (2) that his report of unauthorised lending’s to the board of di- e rectors contained in exhibit ‘A’ did not include Dubic In- dustries, Udina Mix Farms Ltd, and D.U. Chemicals Ltd; (3) that fifth accused was not involved with the disbursement of funds to customers both in naira and forex; f (4) that he has no reflection in exhibit ‘A’ that the board has cause to admonish the fifth accused in respect of the performance of his duties; (5) that there was shortage of staff, they were over worked and g that some of the staff had their leave commuted to money because the bank could not allow them to go on leave; (6) that under staffing in the defunct bank will result in backlog of entries and some staff being over worked and mistakes are bound to occur; h (7) that by the liquidity squeeze and mop-up operations embarked upon by the CBN, substantial amount was removed from the defunct bank to the CBN but he could not say if it was N169 Million; i (8) that the defunct bank had placements made with it by other Merchant Banks that had excess funds and agreed following exhibit ‘N’ page 35 paragraph 1 that the liquidity squeeze and mop-up operations adversely affected the funds other banks placed with the defunct bank; j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 727 a (9) that from all he has stated there is nothing that connects the fifth accused with the failing or ailing of the defunct bank. The routine examination of the defunct bank carried out by b NDIC in 1992 and the report of NDIC on the examination was tendered through, PW1 and admitted as exhibit N. Cross-examined by Mr Lawal-Akapo for the sixth accused person, PW1 stated as follows:– c (1) that the sixth accused person was not a member of any of the board credit committee and management committee of the defunct bank; (2) that the sixth accused worked in the Financial Control De- d partment and that the department has nothing to do with the grant or approval of loan facilities, that the sixth accused is not the head of Financial Control Department and that the sixth accused is not in a position to influence the refusal or grant of loan; e (3) that the decision making bodies in the defunct bank were top management committees; (4) that the revocation of licence of the defunct bank was not brought about as a result of report contained in exhibit ‘N’; f (5) that no benefits were conferred on persons whose duties were to effect reversal of errors in the statement of account; (6) that there is nothing in his evidence to link the sixth accused to the collapse of the defunct bank. g I have gone to great lengths to set out the evidence of PW1 and the cross-examination because basically the cross- examination and answers of the other prosecution witnesses followed the same pattern i.e. whether or not the first ac- h cused applied for any loan or facility and if he did not could he have disclosed his interest in the companies. By consent of all learned Counsel, the statements of the accused persons volunteered to the police were admitted as i follows:– (i) statement of Lord Chief D.U. Ifegwu as exhibit ‘P–P1’; (ii) statement of Tony Nnachetta as exhibit ‘Q’; (iii) statement of Ezekiel Ajetunmobi as exhibit ‘R–R2’; j (iv) statement of Adesina Onikeku as exhibit ‘S–S1’. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 728 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

PW2, Yemi Ogunjemilusi earlier referred to in this judgment a while I was highlighting some undisputed facts stated under cross-examination by all learned defence Counsel that the statements accused persons volunteered were not as a result b of questions and answers session. Statement of J.E. Fayomi was admitted as exhibit O–O2. Audu Kwasau Abashiya, physician (PW4) a shareholder, non-executive director and later chairman of the board of c directors of the defunct bank tendered report Mr Fagbure gave each board member, the report dated 23rd April, 1993 was admitted as exhibits X–X37. Letter he wrote to the then acting MD third accused regarding $1.9Million was ten- d dered and admitted as exhibit Y. Copy of a letter dated 26th June, 1993 signed by him and some board members addressed to the Commissioner of police was tendered and admitted in evidence as exhibit Z. e Copy of letter by the second accused dated 29/6/93 was tendered and admitted as exhibits 1–1a and 1b. Benson Ogunleye, Inspector of Police, attached to the anti- f fraud section FIIB Alagbon (PW8) identified petition by the chairman and other board members of the defunct bank to the Inspector-General of Police – Exhibit T. On the strength of exhibit T. Jimi Lawal, second accused, was arrested. The statement he volunteered was tendered through PW8 and g admitted in evidence as exhibits 15–15a and 15b. The witness stated that he requested for vouchers of Udina Mix Farms and D.U. Chemicals which the sixth accused referred to in his statement – exhibit S–S1 and he was given, the h eleven vouchers for D.U. Chemicals and two for Udina Mix Farms were tendered and admitted in evidence as exhibits 16–16a–16j and 17–17a. Cross-examined by Chief Duro Ajayi for the fifth accused, i PW8 stated that the fifth accused was not with him when he was taking the statement of the sixth accused. He did not know the signature of the fifth accused and whether it was on exhibits 16–16j and 17–17a or not and he did not investigate j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 729 a who signed exhibits 16–16a–16j and 17–17a. There was a loss to the defunct bank but he did not know how much. Cross-examined by Mr Lawal-Akapo for the sixth accused b person PW8 stated that exhibits T–T1 formed the basis of police investigations into this matter, he agreed that there is no mention of vouchers in exhibits T–T1. c Adekunle Adewoye Fagbure (PW9) referred to by learned defence Counsel as the prosecution’s star witness whom I have earlier referred to in this judgment tendered the report of Peat Marwick and it was admitted as exhibit 19 the report was not received by Dr Abashiya’s board who commis- d sioned it but by the Interim Management Board of the defunct bank. Testifying on exhibit 20 the organogram of the defunct e bank PW9 stated that the first accused person is a member of the board. The second accused person is a member of the board as well as the MD. The third accused was the then protem executive director (Financial and Admin). The fourth f accused was the general manager (Financial Control and Planning Division) AGM (CBD). The fifth accused was assistant general manager (Financial Control and Planning Di- vision). The sixth accused was a staff in the Financial Con- g trol and Planning Division, being a Deputy Manager his name and position will not be reflected in exhibit 20. PW9 stated that the MD is the general overseer of the entire activities of the bank. Apart from overseeing the activities of the head of AGM (Financial Control and Planning) who also h reports to him, the third accused person also oversees the activities of AGM (CBD) and SM (Treasury Services) they all report to him on their day to day activities. The third accused as substantive head of treasury was in control of i sourcing local and foreign currency for the defunct bank and investing any excess not required by the bank as at the date in question. The fourth accused person as GM (CBD) was the head of the bank, he managed all bank accounts and the j customer’s accounts. The division is also in charge of loans [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 730 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. and advances in the bank. The customers’ current accounts, a overdraft account, domiciliary account, term loan account are managed by the Corporate Banking Division. PW9 stated that there is something in Alpha Banking par- b lance known as a Block Account. It is used for foreign currencies and the account shows allocated foreign currencies and how they are utilised and it qualifies as one of the accounts in Alpha. The block account statement is not given to c customers under normal circumstances. Corporate banking has control for block accounts. Corpo- rate banking in the defunct bank also is responsible for transfers of foreign currencies to corresponding banks ac- d counts and where this affects a customer the amount will be reflected in the block accounts of the customer. PW9 stated that Treasury Department i.e. the treasurer in consultation with the MD allocates foreign currency to customers. e The computer unit where all postings relating to transactions in the bank is inputed into the computer, is under the Control of Department of Financial Control and Planning. All entries raised by the various departments concerning any f transactions are sent to the financial control and planning. The department also sends monthly returns and quarterly returns to CBN. With regard to the board of directors of the defunct bank, g PW9 stated that the board was expected to hold regular meetings as convened by them. The board is expected to set and issue policy guidelines to the management of the defunct bank, it is expected to ensure that the bank is ade- h quately staffed with qualified people to run the affairs of the bank, it is expected to approve facilities above N5 million. PW9’s reply to query issued to him at the instance of the MD for embarrassing him before the board was tendered and i admitted in evidence as exhibit 21. Report on Review of Loans and Advances by Mr Fagbure dated 13th April, 1993 was tendered and admitted in evidence as exhibit 22. Proce- dure Manual for Credit and Marketing was tendered and j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 731 a admitted in evidence as exhibit 23 while the Procedure Manual for Treasury and Financial Services Division was tendered and admitted in evidence as exhibit 24. PW9 stated b that prior to exhibits 23 and 24 there was some procedure in place in the defunct bank. The document Inter Office Memorandum dated 23rd March, 1989 was tendered and admitted in evidence as exhibit 25. PW9 stated that when he c got to the defunct bank he met exhibit 25, the manuals of Cooper and Lybriand and Arthur Andersen on the ground. He stated that there is procedure in the defunct bank for granting credit facilities to customers and for getting forex allocation. d The witness narrated the procedure for obtaining credit facility which is more or less the same procedure as given in evidence by PW1. e File on Dubic Industries Ltd was tendered and admitted in evidence as exhibit 26 while the file on Udina Mix Farms Ltd was tendered and admitted in evidence as exhibit 27. CTC of Form CO7 of Udina Mix Farms Ltd was tendered f and admitted in evidence as exhibits 28–28a. PW9 stated that Dubic Industries Ltd maintains a current account in the defunct bank which most of the time is used in purchasing foreign currency. Once a customer purchases foreign cur- g rency from the defunct bank, the bank opens a block account for the customer. There are two accounts opened for Dubic Udina Mix Farms. Dubic Udina Mix Farms also maintained a current account, it has also a block foreign currency ac- h count opened for it. D.U. Chemicals Ltd also maintained current account and block exchange account. PW9 stated that exhibit E is Dubic Industries Ltd US dollar block account while exhibit W is Dubic Industries cur- i rent account in naira. The original of exhibits W–W15 was tendered and admitted in evidence as exhibit 29. It is CTC of Dubic Industries Ltd current account in naira. Current account of Udina Mix Farms was tendered and admitted in j evidence as exhibit 30. Current account of D.U. Chemicals [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 732 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Industries Ltd was tendered and admitted in evidence as ex- a hibit 31. PW9 stated that from exhibit E the US dollar block account of Dubic Industries, the company purchased foreign b currency from the defunct bank. From exhibit 30 Udina Mix Farms enjoyed credit facility which was overdrawn at certain point. From exhibit 31 D.U. Chemicals enjoyed credit facility which was overdrawn at certain point. From exhibit c 31 D.U. Chemicals enjoyed credit facilities from the defunct bank. From exhibit 29 Dubic Industries enjoyed credit facilities from the defunct bank. d The witness stated that reconciliation is done when there are two disagreeing figures. Reconciliation exercise carried out by Mr Fayomi the fourth accused was tendered and admitted in evidence as exhibits 32–32a to 32e. PW9 stated that he placed total reliance on the reconciliation. Memo e dated 11th November, 1993 by Mr Fagbure to the MD and the signed copy of exhibits 32–32e were tendered and admitted in evidence as exhibits 33–33a to 33h. The original of exhibits E–E6 was tendered and admitted in evidence as ex- f hibit 34. Alpha Merchant Bank account with CBN was tendered and admitted in evidence as exhibit 35. The original of exhibit g 33a the signed reconciliation account by fourth accused which is contained in a file headed Lord Chief Ifegwu and the document with other documents was tendered and the file was admitted as exhibit 36. Copy of letter by Mr Fag- h bure dated 18th November, 1993 to the first accused was tendered and admitted in evidence as exhibits 37–37a. The witness stated that the figure $2.9Million came about from Mr Fayomi’s reconciliation and he placed total reliance on the exercise performed by Mr Fayomi. The figure of i $1.9Million in exhibit Y letter from Dr Abashiya was the result of the merger of four separate accounts of the first accused, the merger resulted in the figure $1.9Million but there is a column inside exhibit 36 which shows a shortfall of j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 733 a $2,496,732.89 and $287,170 yet to be negotiated on LC 227/91 dollars 178,160. If the three figures are added together we get the amount of $2.9Million. b The first accused person’s letter dated 26th November, 1993 in response to exhibits 37–37a was tendered and admitted in evidence as exhibits 38–38a. After exhibits 38–38a first accused wrote another letter the c following day. Copy of the letter dated 27th November, 1993 was tendered and admitted in evidence as exhibits 39– 39a. d PW9 stated that first accused paid some amount following correspondences between the defunct bank and first accused and the MD instructed him to get a break down of the amount due and calculate interest and merge the four ac- e counts as per first accused’s request and he did. The memo he sent to the MD dated 22nd November, 1993 was tendered and admitted as exhibits 40–40a. Deal slips 003354, 003287, 00312, 003708 and 003709 f were tendered and admitted as exhibits 41–41a–41e. Exhibits 41–41e minus exhibit 41d were approved by the third accused person. PW9 stated that the instructions on the deal slips are debit current account of Dubic Industries in g five and Udina Mix Farms in one. He traced all the debits to Dubic Industries account and Udina Mix Farms with the exception of one which has the instruction “funds already utilised to be sourced later”. It is exhibit 41e and he was able to h trace it also to the various accounts. PW9 led evidence to show the entries in the Dubic and Udina Mix accounts and observed that the entries increased the overdraft in the account. i It was observed that debit entries on 2nd April, 1991 and 16th April, 1991 were reversed out of the account on 19th April, 1991 thereby reducing the overdraft facility but the entries posted into the credit block account were not equally j reversed out of the block account and thereby making it to [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 734 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. utilise $1Million without paying for it. If the reversals have a been equally reversed out of the credit dollar block account it would have made it impossible for Dubic Industries to have utilised the $1Million without paying for it. Rather b what was done was that the debit entry in the current account was taken to an account called suspended debit account maintained by the defunct bank – exhibit 42. PW9 stated that a suspended debit account or suspense ac- c count is a temporary account in which transactions whose origin could not be determined at that point in time is placed. It is a temporary account until it is determined where it will go by normal accounting or banking parlance. d Any entry placed in the suspense account must be investigated and reversed out of it within a period of two weeks or maximum of one month, however in Alpha, entries are sometimes left there for years. e PW9 stated that the effect of having this entry in suspense account is that the bank is losing interest or income, that income could have been accruing to it if the money debited f was not so debited. The bank is losing the liquidity the use of the fund which it could have had if the customer who was allocated foreign currency had paid the naira equivalent. PW9 stated that the two postings stayed in suspended debit g till 31st October, 1991 when they were reversed out from debit. He later found out that Alpha Sofitel current account was debited. Alpha Sofitel maintains a current account with the defunct bank. The Alpha Sofitel Hotels Ltd account with h Alpha Merchant Bank was tendered and admitted as exhibit 43. The debit and credit vouchers dated 19th April, 1991 and the batching envelope were tendered and admitted as exhibits 44–44a and 44b and exhibits 45–45a–45m. i Mr Fayomi, the fourth accused approved all the vouchers except exhibits 45g, 45j, 45l. An analysis sheet showing the movement of the deal slips to its final resting place in Sofitel current account prepared j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 735 a by PW9 was tendered and admitted in evidence as exhibit 46. Alpha Sofitel current account was tendered and admitted in evidence as exhibit 47. b Exhibits 45, 45a, 45b relate to deal slips 3287, 3312 and 3354. Exhibit 45f relates to deal slip 3708. Deal slip 3609. Exhibit 41d – relates to Udina Mix Farms Ltd It shows that on 16th July, 1991, $500,000 was allocated to Udina Mix c Farms Ltd at the rate of N10.87 per dollar, naira equivalent N5,434,350, the instruction was to debit the customer’s account with the naira. One Solomon Abekhe a staff of treas- d ury approved the voucher. On 23rd July, 1991 Udina Mix Farms Ltd current account was debited with the naira equivalent of $500,000 allocated. On 31st November, 1991 Udina Mix Farms current account e was credited and Alpha Sofitel Hotel current account was debited. Both deal slips 3708 and 3609 naira equivalent of dollar allocated were reversed from the company’s current account directly to Alpha Sofitel Hotel current account. In- f terest was charged on all the forms from the dates of the original entries to 31st November, 1991, the current account of Sofitel Hotel was debited for the interest. g Exhibit 34 Dubic Industries Ltd is the dollar block account; exhibit 29 is naira current account of Dubic Industries Ltd, exhibit 42 is suspense account. On 2nd April, 1991, deal slip 3287 for $500,000 was h posted under credit column for $500,000 and at the close of business that day the amount was $530,230.24 credit. On 16th April, 1991, deal slip 3312 for $500,000 was allo- i cated and $500,000 was credited that day bringing the balance to $582,327.89 credit. On 26th April, 1991, deal slip 3354 for $500,000 was allocated and $500,000 was credited bringing the balance at the j close of business that day to $522,888.89 credit. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 736 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

On 12th September, 1991, deal slip 3708 for $339,985.14 a was allocated and $339,985.14 was credited bringing the balance at the close of business to $572,036. b On 31st October, 1991, deal slip 3609 for $500,000 was allocated and $500,000 was credited at the close of business bringing the balance to $3,047,430.82 this means that he has over-utilised dollars to that amount and he has to buy over c $3 Million to bring his account with the bank to credit. The total dollars allocated to Dubic Industries Ltd and Udina Mix Farms Ltd and deal slip 3709 utilised traced to Alpha Sofitel amounted to $2,448,998.86. d The shortfall of $43,124.18 is reflected in exhibit 50. Further to the undisputed facts earlier referred to in this judgment and having waded through the labyrinth of evi- e dence in the defence of accused persons I will just refer to relevant aspects of their testimonies. As it is very apparent the first accused person did not lead evidence in person, DW1 Kenneth Chimaroke Uwadiwe f Ogbonna testified on his behalf. He could not give an answer to some issues exclusively within the knowledge of the first accused. g He could not say to whom Alpha Sofitel refunded part of $3.35Million he said first accused told him he loaned to Al- pha Sofitel. h He could not say whether the loan to Alpha Sofitel was made in lump sum or piecemeal. He does not know who prepares first accused’s annual personal account. He does not know what happens to letter brought to Dubic i Industries Ltd where the bearer requires proof of service. He is not aware that Dubic Industries Ltd and the defunct bank exchanged correspondence on the debt conversion transaction. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 737 a He does not know of any contractual documents or loan documents on the $3.35Million from first accused to Alpha Sofitel. b He does not know if the defunct bank is a party to the loan between first accused and second accused. DW1 stated that he was aware of how Dubic Industries Ltd paid the $2.9Million in naira cover. Exhibits G–G5 has the c total tabulation of how the over-utilisation was liquidated. Confronted with Appendix A of exhibit 36 the witness does not know what Sofitel paid for and he would not know d what it was all about and he was not aware that Alpha Sofitel paid for the over-utilisation. He could not lay hands on their record where N30 Million, N50Million was given in bailing out the defunct bank. He e does not know what happens at the Annual General Meeting or board meeting of the defunct bank. He does not know one Chief Amobi, he is not familiar with the name. He does not know if first accused was ever f given bail by the police on this issue. first accused did not tell him that he reported to the board of the defunct bank that second accused cheated him of N74 Million. He does not remember that first accused told him that he first accused g told the board of the defunct bank about the debt conversion programme. The first accused did not tell him that he told the board of the defunct bank that he overutilised dollars to the tune of $2.9Million because he did not know until they h started communicating with him both verbally and in writing but he would not know which communication came first verbal or in writing. The witness stated that first and second accused persons are good friends and trusted friends and be- i ing trusted friends it is possible they are good business partners and oral or verbal communication between trusted friends may not be known to third parties like him. He does not know if first and second accused persons agreed on j over-utilisation of forex. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 738 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The witness stated that exhibits 77, 78, 80 and 81 were a documents tendered to show that first accused loaned $3.3Million to Alpha Sofitel and the source of the fund but the relationship between first accused and Alpha Sofitel has b nothing to do with the defunct bank. I shall refer to the evidence of Akeem Adeyemi Eg- berongbe a graduate in Economics who says he is fairly comfortable in banking transactions in Nigeria and has c worked in many banks on the issues he led evidence on. With regard to the third accused person and with particular reference to the 41 series the third accused stated that he approved the allocations. He then tendered documents to show d flow chart for forex admitted in evidence as exhibits 85–85a and 87–87a. He testified that he was a member of management from October, 1990 until the Interim Management Board took over management of the defunct bank. e Third accused stated that he prepared the 41 series because it was his duty to prepare deal slips and provision is made for it in exhibit 24 which has been in use since 1991. f A deal slip according to him is allocation of forex to a customer and before a deal slip is raised the MD and his committee would have vetted the application for forex, and the application is backed with funds. Cross-examined by Dr Mosugu the third accused stated that if the bank exercises its g option to provide whole funding or part funding that will be credit facility. The fourth accused person in his defence, contrary to the h evidence of third accused, stated that procedure manual was not in Alpha even though it should have been, the result was that there were different people with different ideas conflicting. He however stated that exhibit 23 and exhibit 24 were approved in 1991 but there was no procedures manual for i Corporate Banking Division. Testifying further on deal slip, the fourth accused stated that a client or customer buying forex would have met his accounts officer, undergone some process in treasury and thereafter a deal slip is issued. It is j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 739 a upon the receipt of the deal slip that the duty of his division begins. Exhibit 32, summary prepared by the fourth accused was tendered and admitted in evidence as exhibits 88–88a to b 88d. The document showed that the total amount utilised by Dubic was $12,290,675.74 and that forex allocated or purchased was $9,328,612.85. There was a shortfall of $2,962,062.89 but it is based on a wrong premise because c utilisation made by Udina Mix had been included. If however the utilisation made by Udina Mix is removed, Dubic will be in credit. The net global deficit of Dubic In- dustries Limited would still remain $1,955,064,43 deficit. d The fourth accused person stated that the six deal slips were paid for by a customer of the defunct bank Alpha- Sofitel Hotels. It was the accounts officer and the principal relationship manager of the first accused who informed his e department that Sofitel Hotels was to pay for the forex. He did not know from where Sofitel got the money. The fourth accused stated that ordinarily the bank without any arrangement would not have allowed first accused to overdraw his f account but because the bank’s record were not up to date that caused the shortfall. I shall refer to some of the evidence later in this judgment. g The fifth accused person in his defence stated that the overdrawn posting of Dubic Industries Limited in the defunct bank was not forwarded to CBN as part of the monthly returns. h He confirmed that month end entries are passed into other companies’ accounts. It was a directive of the management committee and no staff of Alpha while still in the employ- ment of Alpha can refuse to implement the decision of the i management committee. Cross-examined by Dr Mosugu, fifth accused stated that a suspense account is an account in which transactions that have not been finalised are recorded. The bank does not j charge interest on suspense account. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 740 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

I have carefully considered the evidence adduced by the a opposite parties and the written addresses of learned Coun- sel. As earlier stated in this judgment the starting point is the exhibit 41 series. It is said that exhibit 41 series is a com- b plete foreign exchange transaction. What this implies is that all the conditions precedent to the acquisition or purchase of foreign exchange with regard to exhibit 41 series had been complied with. The conditions precedents as testified to by c PW1, PW9 and confirmed by the third and fourth accused persons and DW2 apart and other conditions is that the customer must have applied for the foreign exchange and he must have in place the naira equivalent of the foreign cur- d rency requested. According to DW2, “it has to be cash and carry basis your naira current account has to be debited before you are given forex allocation, it has been like that since. Since FEM came you cannot have forex without lodgement of the naira value. If you do not have the naira e cover there is no way you can be allocated dollars. The bank will not make a request for you to CBN if you do not have the naira cover in your account. You cannot have overutilised dollar if you do not have naira for allocation, you can- f not spend what you do not have.” DW2 is the expert called by first accused in defence of his case. g By his evidence the over-utilisation of forex under the 41 series is an impossibility but the facts on the ground is that it is a reality. How did it happen? h While PW1, PW9 and third accused person in their evidence stated that there are procedures for forex acquisition, the fourth accused stated that there are no procedures. Ac- cording to third accused in his evidence on 8 January, 1996 quote “exhibits 41–41e could not have come into existence i without a written request by DIL i.e. Dubic Industries Lim- ited. Specifically on exhibits 41–41e there are written requests because these underlining documents are also available for CBN’s forex inspectors”. This evidence makes the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 741 a flow chart – exhibits 85–85a and 87–87a irrelevant in the context of exhibits 41–41e which represents complete forex transactions. b It is undisputed that first accused did not have naira cover in place before the allocation of forex contained in the deal slips exhibit 41 series to him. It is in evidence that the first accused is a non-executive di- c rector of the defunct bank and that will qualify him to be a member of the board of directors of the defunct bank with second accused. He is also the highest shareholder in the defunct bank and with the second accused is a director of Al- d pha Sofitel Hotels Limited and both of them are signatories to its account. They are both directors of Alpha Properties Ltd. The second accused is the relationship manager to the accounts of the first accused. According to the third accused e person the first accused has a culture of coming to the bank once in a while, he goes to the MD because the MD is his principal relationship manager and from there his requests are met, messages from the MD’s office are sent forwards and backwards to the various units to service first accused’s f requests while he waits in the MD’s office. There is a certain intensity hyperactivity in his visit, he may try to do twenty or thirty things on that visit. Ordinarily he does not deal with the staff concerned directly. I quote what the fourth accused g has to say on the same issue – Lord Chief as a major customer of the bank would ordinarily deserve the attention of the MD and I believe sincerely that that would hold sway in any bank, however with him sitting in Jimi Lawal’s Office h and Jimi Lawal either because he wants to get rid of Lord Chief in his office quickly or to satisfy an important customer would insist on a transaction that has a circle of three hours being completed in three minutes, this used to put a lot of pressure on the staff when he insisted on a telex in three i or four minutes who could argue with Jimi. Most of the time Jimi will call me to pass on the message to ensure that the same urgency that he has handed to me is passed to the staff who is handling the transaction and several times he con- j tacted the officer directly. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 742 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

Of Jimi Lawal second accused, the fourth accused has this a to say “I think second accused took over as chief executive towards the end of 1989 but by 1991 he was chief executive Officer. As manager or senior manager of operations de- b partment I worked directly with him. Jimi was autocratic, he was a man who always wants to have his way. When Jimi insists that he is CEO of the bank it is like saying I am the General Officer Commanding (‘GOC’). He would insist that the buck stops at his desk”. The fourth accused under cross- c examination by Dr Mosugu stated that he had known Jimi Lawal as far back as 1976 or 1977 when they were working in the same bank – Union Bank. At that time second accused was a clerk and he fourth accused a post between a clerk and d a manager he maintained this superior position over second accused until second accused left Union Bank but they continued to maintain contact for the next ten years, the contact was both business and personal because when second ac- e cused got to England, he joined Union Bank, England. By 1988 he had returned to this country and he got to know about the defunct bank through second accused. It was the second accused who in fact invited him to join the defunct f bank and he left Union Bank by retirement to join the defunct bank. The above facts between first accused and second accused as business and trusted friends on the one hand and the sec- g ond and fourth accused persons as business and long standing friends on the other hand would not constitute an agreement to do an unlawful act or a lawful act by unlawful means. But there are some other facts which have to be considered along with above facts namely:– h (1) The departments connected with forex transactions are treasury and financial services division and corporate banking division and the two departments must co-operate entries coming from one to the other. i (2) The second accused is the relationship Manager of the first accused person. A relationship manager is the overall coordinator of an account. It is through him that the bank communicates with first accused. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 743 a (3) The treasurer third accused allocates forex in consultation with the MD. See exhibit 67. (4) In arguments in the MD’s office on analysis done by a b member of staff from the corporate banking division showing that first accused did not have enough balance the staff would back down. One wonders what the stand of the second accused as the MD who along c with the third and fourth accused persons constitute the heart of the bank did on such occasions. Did he also back down? (5) This constant arguments led to the reconciliation ex- d ercise carried out by the fourth accused. The result was exhibits 32–32e, 33–33h and 36. Reconciliation is done when there are two disagreeing figures. This is the definition given by PW9. According to DW1 e reconciliation of accounts in accounting terms means bringing together under a common umbrella accounts from various sources so that it would make meaning. Reconciliation according to the fourth accused is a f process of identifying the disparity or divergence between two positions. fourth accused stated that first accused was saying that he still had credit dollar balance to utilise, his (fourth accused) staff was saying g otherwise that the account was in debit, hence the reconciliation exercise. Based on this definition of reconciliation, the fourth accused was shown exhibits 33d–33h and asked what figures he rec- h onciled. In other words what figure did first accused put forward that has to be reconciled with the figure available to the defunct bank, fourth accused stated that he cannot remember the figures he reconciled. fourth accused went on as i follows:– “To the best of my knowledge the contention was not over deficit and surplus, the contention was over the quantum of surplus available. Lord Chief wanted to effect a remittance and whilst my department insisted he did not have enough balance Lord Chief in- j sisted he had adequate balance to meet the remittance hence [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 744 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

reconciliation. It is correct the two balances were different i.e. my a department’s and that of Lord Chief but our figure must have been lower than that of Lord Chief hence the dispute. I did not show the two differences in exhibits 33d–33h. Yes, you will be right to refer to exhibits 33d–33h as an analysis of allocation and utilisation. b Exhibits 33d–33h is not a misnomer even though the two balances are not stated”. The exercise in exhibits ‘33d–33h’ is not reconciliation but as rightly suggested to the fourth accused an analysis of allocations and utilisations on the companies of the first accused c and this led to the deficit of $2,962,062.89 on Dubic as found by the fourth accused. PW9 then wrote to first accused demanding for the said amount plus interest bringing the sum demanded as $3,233,197.03 as at 30/9/93. See exhibit ‘37’ letter dated 18/10/93 addressed to first accused. first accused signed letter dated d 26/10/93 in reply to exhibit ‘37’. The letter was tendered and admitted as exhibits ‘38–38a’. It reads as follows:– Dubic Industries Ltd Ref. No. DIL/EO/320/93, 26/10/93 The managing director, Alpha Merchant Bank PLC. 188 Awolowo Road, Ikoyi, Lagos. e Dear Sir, Re: Outstanding indebtedness to Alpha Merchant Bank Plc. We confirmed receipt of your letter dated 18th October, 1993 which content were noted and our reply as follows:– f (1) We humbly request you to furnish us your printed statement of our naira a/c from the date of opening till date. This will facilitate our urgent reconciliation of our a/c with the bank. (2) As per your attached US Dollar statement of our a/c with g you and our cross checking confirmation shortfall of USD2,962,062,89 of the same a/c. (a) We now request you to debit also the shortfall of ref. letter of APPM ref. APPM/EU/321/93 amounting to USD252,180. The above shortfall brings total to h USD3,213,242.89. (b) We also request you to credit the surplus of USD869,692.62 and USD388,485.82 ref. letter UMF/EU/319/93 from Udina Mix Farms Ltd and ref. let- i ter DUC/EU/318/93 from DU Chemicals Ind. Ltd. After the total CR/DR that brings us the total shortfall of USD1,955,064.45. All the above reference letters are enclosed. Please the delay in payment of this has been the faults on the part of the bank not to have debited us the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 745 a foreign exchange rate the CBN sold the money to them, which was between N8.92 to 10 per USD1. After repeated request and protest and demands the bank refused to debit us the rate that the allocation was given to them. b Having said all this and seeing problems which the bank found itself, we humbly request you to use your good of- fices and IMB directors to accept the settlement of this shortfall at the above rate. We have already shown good c will to pay N5M as part payment which the bank has already. Thanks for your usual co-operation. Yours faithfully, d for DUBIC IND. LTD. Signed: LORD CHIEF D.U. IFEGWU, Chairman.” First accused followed exhibits 38–38a with another letter dated 27th November, 1993 admitted in evidence as exhibits e 39–39a. Extracts of the letter have been reproduced earlier on in this judgment. The first accused did not contest the figure of $2,296.062.89 but he requested for a merger of all his accounts an action which had earlier been done by fourth f accused and which he referred to in exhibits 38–38a, how he got the figure of $1.95 million the shortfall of the merger is a guess I cannot attempt. There is exhibit 67 the defunct bank allocation file 1991 for foreign currency. Page 117 reads as g follows:– Alpha Merchant Bank Ltd. Inter Office Memorandum From: Tony Nnachetta – AGM – TFSD h To: Executive Director Date: January, 3rd 1991 Ref. Bids Outstanding Please find attached the list of Foreign Exchange Bids out- i standing as at 31st December, 1990. I recommend that the asterisked bids be allocated since they have Naira in place and also Giocen Technical ($11,000) be allocated for relationship purposes. Total allocation would then amount to j $1,060,424.41. Please approve. Sgd. Tony Nnachetta” [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 746 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

See also pages 132–133. At page 133 third accused sent a memo to one Tunde Kasim:– (1) Increase Dangote to $200,000 i.e. another deal slip for $50,000. That is the original value of their bid. b (2) same for Dubic $334,000 i.e. $114,000 additional. On both cases, ensure naira is in place for both allocation and additional allocation – please. (sgd.) 19/12/90.” The memo is on the letter headed paper of Tony Nnachetta c AGM (T and FSD). I have earlier on referred to the second, third and fourth accused persons as the heart of the bank. Let us consider a situation like this:– d If a customer who applies for forex has not got naira in place to cover an equivalent amount required in forex, would the third accused recommend the customer for allocation? If however he does, will the MD not query the recommendation or direct the third ac- e cused to obtain naira cover for the forex. If however the MD is silent and or the application is approved and a deal slip is prepared and sent to the fourth accused would he not ask questions. If he does not would he not have bought the forex with the funds of the bank. It has been stated in evidence that the treasury and corporate f banking have to cooperate entries coming from each department. The fact that the first accused did not apply for credit facility but was granted forex which he utilised is itself evidence of an agreement between those who should have applied g checks and balances to prevent such from happening. If he did not apply and he was granted, when even those who applied did not get, a situation which fourth accused referred to as the fact of life is evidence of agreement. It is a fact of life h that someone who did not apply could over-utilise more than a hundred times and someone who applied and has naira in place could not even get once to utilise. A number of reasons were given why the over-utilisation i happened, namely, computer failure, heavy work load, backlog of postings etc. When asked, apart from the first accused, to name just one person who over utilised as a result of these constraints which was responsible for the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 747 a over-utilisation by first accused, the fourth accused could not name one person. It is possible to have inaccurate figures as a result of any of these reasons but it should not be in re- b lation to one customer who is a business associate of the MD and the head of corporate banking who is also a bosom friend and business associate of the MD to the exclusion of other customers and in recurring manner. c Section 3(1)(b), (c) and (d) of Decree No. 18 of 1994 provides as follows:– “3(1) The Tribunal shall have power to:– (b) try the offences specified in Part III of this Decree; d (c) try the offences specified in the Banks and other Fi- nancial Institutions Decree 1991 and the Nigeria De- posit Insurance Corporation Decree 1988 and (d) try other offences relating to the business or operation e of a bank under any enactment.” Part III – Offences and Penalties provides as follows:– “19(1) Any director, manager, officer or employee of a bank who:– f (a) knowingly, recklessly, negligently, wilfully or otherwise grants approves the grant or is otherwise connected with the grant or approval of a loan, an advance, a guarantee or any other credit facility or g financial accommodation to any person; (i) without adequate security or collateral, contrary to the accepted practice of the bank’s regulations, or h (ii) with no security or collateral where such security or collateral is normally required in accordance with the bank’s regulations, or (iii) with a defective security or collateral, or i (iv) without perfecting, through his negligence or otherwise, a security or collateral obtained; or (b) grants, approves the grant or is otherwise connected with the grant or approval of a loan, an ad- j vance, a guarantee or any other credit facility [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 748 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

which is above his limit as laid down by law or any a regulatory authority or the bank’s regulations; or (c) grants, approves the grant or is otherwise connected with the grant or approval of a loan, an ad- b vance, a guarantee or any other credit facility to any person in contravention of any law for the time being in force, any regulation, circular, or procedure as laid down, from time to time, by the regulatory authorities or by the bank; or c (d) receives or participates in sharing, for personal gratification, any money, profit, property or pecuniary benefit towards or after the procurement of a loan, and advance, a guarantee or any other credit facility from any person whether or not that person d is a customer of the bank; or (e) recklessly grants or approves a loan or an interest waiver where the borrower is known to have the ability to repay the loan and interest, is guilty of an e offence under this Decree. PW5, Egheomhanre Emmanuel Eyieyien, a staff of NDIC on secondment as executive director of Merchant Bank of Africa Ltd stated that sometime in June/July, 1993 the man- f agement of NDIC received a petition from Chief Omisade one of the directors of the defunct bank. Copy of the petition dated 12th May, 1993 was tendered and admitted as exhibit 3. g After investigation they issued a report, Copy of the report was tendered and admitted as exhibit 4. The witness stated that each overdraft loan or any credit facility granted by the bank is expected to have a credit file h which should contain some documents but the memoranda relative to the companies owned by the first accused were not made available to them. Such documents include:– (1) an application letter from the debtor asking for the i facility; (2) a memorandum appraising that facility which must be done by an officer of the bank on whether the facility should be granted; j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 749 a (3) an approval memorandum signed by competent designated officers of the bank in line with the bank’s policy; b (4) an offer letter written by the bank to the debtor stating we are ready to offer you the facility and the condition under which it will be offered; (5) an acceptance letter by the prospective debtor ac- c cepting the offer and the condition; (6) copies of securities pledged; (7) if it is an overdraft facility a statement of account d showing movement of that account after the facility has been granted; (8) it will contain call memoranda and copies of correspondences with the debtor. e PW5 stated that the consequence of failure to have a credit memoranda is that there is no approval letter, it shows that the facility was unauthorised and being a director related facility, first accused was a director of Alpha Merchant Bank f and they expect that since the amount was more than N50,000 in line with BOFID to find evidence of specific security and where to find it is in the file and they expect that the director would have declared his interest at the meeting g of the board of directors. They reviewed the board minutes book, there was no evidence that that was done. The Deputy Governor of CBN and the MD of NDIC in company of other members of the CBN called the entire board of Alpha Mer- h chant Bank to deliberate on the report. The witness referred to exhibit 4 Appendix 10 headed list of directors and their indebtedness to the bank “. . .” Dash means it was not approved. There was no evidence that deposit was pledged for i the account since there was no credit file when they examined the bank. Cross-examined by Mr Oyetibo, PW5, stated that a facility which could be credit facility is an extension of money by j a bank to person or persons, it could be authorised or [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 750 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. unauthorised. PW6, Alhaji Ofoagbe Garuba, earlier referred a to in this judgment testified that CBN ensures that banks be- have well by issuing credit and monetary guidelines every financial year to guide the operators of banks also regula- b tions of forex and foreign trade transactions, they are always issued every January at the beginning of every financial year. Those for 1990 and 1991 were tendered and admitted as exhibits 6 and 7. Copy Foreign Trade and Exchange Pol- c icy Measures for 1990 and 1991 were tendered and admitted as exhibits 8 and 9. Report issued on routine examination of Alpha Merchant Bank was tendered and admitted as exhibit 10. d With regard to Count 1 of the charge, the first, second, third and fourth accused persons are directors/managers of the defunct bank. It is in evidence that first accused overutilised forex which fell within the period 1988 till 1993 but e specifically 1991 when the 41 series came into existence. The second, third and fourth accused persons played some parts in the allocation and utilisation of the forex allocation under the 41 series. f All learned Counsel have adequately espoused the law on conspiracy. I do not think I can do better. I need to add that conspiracy can be inferred from overt acts. In the case of g Clark and another v. The State (1986) 4 N.W.L.R. (Part 35) 381 at 394 H it was stated as follows:– “I think it is well recognised in law that it is not necessary that it should be proved that the appellants met to concoct the scheme h which led to the theft of the subject matter aircraft, nor is it necessary that they should have originated the conspiracy. If a conspiracy is already formed, and a person joins it afterwards he is equally guilty. (See Daboh and another v. The State (1977) 5 S.C. 197 at 222 . . . etc. I believe that the essential ingredient of the of- i fence lies in the bare engagement and association to do an unlawful thing which is contrary to or forbidden by law, whether that thing be criminal or not, whether or not the accused person has knowledge of its unlawfulness. It is, of course necessary to constitute the offence that there should be a criminal purpose common to j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 751 a all the conspirators. (See R v. .Clayton (1943) 33 Cr. App. R. 113).” May I add that there are cases when it is permissible to in- b clude the count of conspiracy with that of the commission of the substantive offence for example where conspiracy can be inferred from the facts and circumstances of the commission of the substantive offence, particularly where available evi- c dence of the commission of the substantive offence is not direct, count of conspiracy may quite properly be joined with that of the commission of the substantive offence or where the principal culprits are not before the court. See d case of R v. Greenfield (1973) 1 W.L.R. 151 and Onochie v. The Republic (1966) N.M.L.R. 307. There is abundant evidence of the interactions between first and second accused persons before this tribunal both e oral and documentary. See exhibits 11, 12, 13, 15, P–P1, U, 38–38a, but they have not come forward to state their own side of the case more so when they have been called upon after the no case submission to defend themselves. I have f also highlighted the facts from which a common design could be inferred from the acts of the first, second, third and fourth accused persons from the mere fact of the allocation and utilisation of the foreign exchange to first accused when g he had no naira in place. In doing this I accept the definition of what amounts to a facility as given by PW5, PW9 and fourth accused. A situation in which first accused utilised forex in the way shown in this case can have no other defini- h tion other than that he was granted unauthorised and unsecured facility. The third accused is shown to have joined the defunct bank in October, 1990, this fact notwithstanding, exhibits 41 se- i ries are shown to have been prepared by him and by that act he joined in the conspiracy that started between the first and second accused persons since 1988 in the course of which fourth accused joined when he went to Corporate Banking j Division. It has been shown that the second, third and fourth [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 752 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. accused persons are managers in the defunct back and from a what has been stated earlier on in this judgment the facility granted to the first accused was unauthorised. In the same vein the first accused who in his statement to the police ex- b hibits P–P1 and U admitted over-utilising forex failed to declare the nature of his interest as he did in the case of an earlier interest declared in the case of D.U. Chemicals. Even after the overutilisation was brought to his notice he c still did not declare his interest. PW4, Dr Audu Kwasau Abashiya, the last chairman of the board of directors under cross-examination by Mr Lawal-Akapo on 15th September, 1995 stated as follows:– d “It will be regular for an employee to carry out a board’s decision assigned to him. Decisions of committees are recommendations to the board which then takes a decision which is passed down for implementation.” e PW6, Acting Deputy Governor, CBN on secondment to Credite Bank Nig. Ltd as executive director under cross- examination by Mr Odedele on 22nd September, 1995 stated as follows:– f “It is perfectly in order for a junior worker to carry out orders that flow from top management. In fact that is what we expect.” PW7, Eunice Nnneka Mgbojikwe, a bank examiner with NDIC under cross-examination by Mr Lawal-Akapo on 26th g September, 1995 stated as follows:– “sixth accused was not one of management staff introduced to us when we got to Alpha Merchant Bank.” The fifth and sixth accused persons made statements that h they made the entries and reversals under circumstances which could be described as carrying out lawful instructions in the course of their normal duties. The Vouchers, exhibits 16 and 17, were acts done in the i process of carrying out the instruction. The instruction itself is a policy of the defunct bank. It is a major policy on which the life of the bank depended because if a correct state of the affairs of the bank were sent to the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 753 a CBN, the regulatory authority might decide to take a second look at the continued operation of the bank. It is for this reason that I do not agree with one of the concessions of Dr b Mosugu that the board of directors and second and third accused persons might not know about the entries and reversals. The policy to make entries and reverse such entries was a c major policy thrust of the defunct bank and such policy must have been taken by the highest decision making body of the bank. Apart from this it was a decision of the management. It follows that the offender is the management, the fifth and d sixth accused persons merely carried out the orders. In the interest of justice those that should be standing in the dock for this offence are the board of directors and management. The fifth accused gave the names of the Management Com- e mittee as Mr Jimi Lawal, Dr U.S.H. Maigida, Marsha Zoaka, Dr, Santuraki, Mr Gabriel Ogbua, Mallam Bibja Bala, Mr Kunle Fagbure PW9 the star witness, Mr Aminu Dikko PW1 the company Secretary/Legal Adviser, Mr Orji Orji, fifth ac- f cused himself, Mr Tony Nnachetta, and Mr Jeff Fayomi. These are the people who formulated the policy, they should be the persons to be charged along with the fifth and sixth accused persons. g Obeying unlawful orders is not a defence under all circumstances but in the circumstances of this case where the principal offender has not been charged, the question is with whom did sixth accused conspire? The second, third and h fourth accused persons are not charged in counts 2, 3, 4, 5, 6 and 7 and even if they were they do not constitute the management committee or the board of directors committee. I uphold the submissions of Prof. Osipitan and Mr Lawal i Akapo on the points canvassed in their addresses but more importantly to me, I cannot in justice and good conscience find the fifth and sixth accused persons guilty. I accordingly find the fifth accused person not guilty on each of counts 2, j 3, 4, 5, 6 and 7 and he is acquitted and discharged on each of [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 754 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. those counts. Similarly, I find the sixth accused person not a guilty on each of counts 2, 3, 4, 5, 6 and 7 and he is acquitted and discharged on each of the counts. I find the charge against each of the first second third and fourth accused per- b sons proved beyond reasonable doubt and I find each of them guilty as follows:– First accused guilty on Counts 1 and 10. Second accused guilty on Counts 1, 8 and 9. c Third accused guilty on Counts 1, 8 and 9. Fourth accused guilty on Counts 1, 8 and 9. Tribunal: d Judgment read. Prof. Adesanya: The first accused has never been involved in any criminal act. He has not been indicted in any court as regards an of- e fence in bank or banking. It is on record that he has paid the naira equivalent of the principal amount which the AMB accepted, throughout each witness accepted that what is in dispute is principle of interest. If he had paid interest in all f probability this prosecution would not have arisen. It is on record that he is one of the biggest customers of Alpha Mer- chant Bank and also one of the largest shareholders of Alpha Merchant Bank. He did not participate in the day to day ex- g ecutive running of the bank. I believe that since there is positive moral turpitude concerning the working of the bank any sentence should be in terms of monetary penalties and to direct that account be taken as to the total amount in dispute h less the amount already paid by him and a medium be worked out as to what should be the appropriate interest. Conduct of the accused before the prosecution and during trial are relevant factors. Before prosecution he has voluntarily paid N16.5 million and during the trial and up to the trial i kept disputing the amount of interest claimed and the principle whether interest should be paid. Every sentencing must have a purpose the purpose of prosecution is to recoup what prosecution considers he is owing them i.e. to take away j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 755 a from him money by way of interest. If Your Lordship decides to impose a monetary fine the amount of interest in dispute would be the focus. b Under the Decree you have power to impose fine. Mr Bankole Aluko: In determining the nature and quantum of the sentence that c should be imposed in this particular case there are several reasons why we urge Your Lordship to temper justice with mercy. All the offences under which third accused is charged are punishable under section 18(2) of Decree No. 25 of 1991. Those offences are not punishable under Decree d No. 18 of 1994 whose section 20 empowers the tribunal to imprison without the option of a fine. Section 18(2) is a case in which Your Lordship has a dis- e cretion to fine third accused and not to consider term of imprisonment. There is no finding that third accused got one penny in Your Lordship’s judgment. I refer to section 3(1)(c) of Decree No. 18 of 1994. It is the punishment prescribed under Decree No. 25 of 1991 and only that punish- f ment that this tribunal has vires to impose. The Decree says that trial should be commenced and completed within 21 days of initiation, the third accused voluntarily surrendered himself before this Honourable Tribunal and trial com- g menced on 23rd August, 1995 today marks the 210th day that he has been in detention at Ikoyi Prison to attend to this prosecution. Your Lordship should take into account that persons like h himself who voluntarily came for prosecution and who has already been detained for 210 days when the law says it should be 21 days deserve the milk of human kindness of this tribunal. Your Lordship’s judgment quoted some i witnesses who stated that the ascendancy of third accused is based on merit, I rely on that and PW1’s evidence that he was never queried or indicted for any negligence, derelic- tion of duty talk less of a criminal or moral indictment j of any kind. third accused had attained the pinnacle of his [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 756 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R. profession of attaining the CEO albeit in an acting capacity. a He was the person CBN recommended after second accused was pushed out. We therefore appeal to this tribunal passionately not to b taint or smear his sterling record built up for over a period of more than 20 years with any stigma that will destroy him as it were. c Third accused is a man with a wife and children of tender years, he also has aged parents who he is responsible for. The wife has been here every day of the trial and he has not set his eyes on the children since 23rd August, 1995. He is a d person of some esteem professionally. Your Lordship can caution and discharge him. If Your Lordship is desirous of imposing a fine I will urge Your Lordship to impose a fine lesser than the maximum of e N100,000 provided by the Decree. This is not a case in which the court should consider a custodial sentence at all. If Your Lordship should make a prison sentence I urge Your Lordship to give credit for the detention from 23/8/95 till f date. We urge Your Lordship to give concurrent fines in respect of three counts. Prof. Olawoye: g Our plea for fourth accused will be premised on four grounds. On Count 1 it is my humble submission that the reference to section 3 of Decree No. 18 of 1994 is intended to invest Your Lordship with jurisdiction. In counts 8 and 9 h no reference was made to section 3 of the Decree. The reason for that is clear BOFID specifically makes provision for jurisdiction. The addition of section 3 is to give Your Lordship jurisdic- i tion. Punishment prescribed in section 18(2) of BOFID is N100,000 fine or three years’ imprisonment. My humble interpretation of that provision is that the primary punishment is fine. j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 757 a The offences of BOFID are technical offences. In considering sentence I urge Your Lordship to consider the imposition of a fine. The criminal Code is clear where a fine is im- b posed along with prison term it is not assumed the fine will be paid – referred to section 390(2) of the Criminal Proce- dure Act gave a table of imprisonment in lieu of fine. It is made subject to any written law. The written law is BOFID c it says three years or N100,000. What I am urging in Your Lordship is that the fine is primary punishment envisaged by BOFID and prison term is annexed in case of default. Refer- ence to seven years imprisonment is qualified. Since they d are convicted under Counts 8 and 9 the charge of mounting conspiracy have been obviated. The conspiracy if it must be separately punished must not attract a grater sentence than the substantive offence itself. Under the scheme of the e Criminal Procedure Act there is a general dispensation or jurisdiction to impose fine in lieu of the general law stipulated thereon – refer to section 382(1) Criminal Procedure Act I submit that this dispensation is appropriate in this by f the Decree. This is not a case in which the court should consider a custodial sentence at all. If Your Lordship should make a prison sentence I urge Your Lordship to give credit for the detention from 23rd August, 1995 till date. We urge g Your Lordship to give concurrent fines in respect of three counts. The fourth accused was asked specifically whether he derived any benefit from the transaction, he said no and the no h was not controverted. If he is guilty of any lapse it is lack of courage to resist Jimi Lawal. Your Lordship will see that fourth accused was forthright in his evidence. It is difficult to work at Alpha, all the directors were at daggers drawn. i The fourth accused has learnt his lesson he has been detained since 19th August, 1995. The stress the family has been put through; the trauma of his young children. I urge Your Lordship to take all these factors into consideration in j the interest of justice. [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J 758 Nigerian Banking Law Reports [1994 – 1996] 6 (PART I) N.B.L.R.

The punishment under Failed Banks Decree No. 18 of a 1994 should not be retrospective, the commencement date is 9th November, 1994 and the period of the offence is between 1988 and 1993. If Your Lordship is considering a b term of fine I urge Your Lordship to take the period in prison into consideration. Dr Mosugu: As regards section 382(1) Criminal Procedure Act it is c subject to other provisions. Where a provision imposes imprisonment you cannot impose fine. What third and fourth accused persons should say is that they have not benefitted, those who benefitted have left the country. d There is provision; it is schedule 2 sections 9 and 10 particularly section 10. Counts 8, 9 and 10 are under BOFID which gives option of e fine N100,000 or three years but Count 1 is under 516 of the Criminal Code no option. That there has to be imprisonment is minimum that it need not be up to seven years. Tribunal: f One thing that struck me throughout this proceedings is that these are highly intelligent minds – by these I mean third and fourth accused persons and even from the letters tendered on behalf of the first and second accused persons g who are absent one can see the degree of intelligence dis- played in the letters but most unfortunately all the energies exhibited in the intelligence have been channelled to wrong uses. In so channelling their intelligence to wrong uses they h have further eroded the confidence of the ordinary depositor in banks. I am moved by the pleas of learned Counsel but I have a duty to sound it loud and clear that those who embark on de- i stroying edifices that have been the only hope of the ordinary struggling worker should not go unpunished. By becoming distressed Alpha Merchant Bank has caused sorrow to many and it is in this light that I want to approach the j [1994 – 1996] 6 N.B.L.R. (PART I) (FAILED BANKS TRIBUNAL, ZONE II, LAGOS) Ope-Agbe J Federal Rep of Nigeria v. Lord Chief Udensi Ifegwu and Others 759 a issue of sentence and impose a sentence that will serve as deterrent on intelligent people who would want to use their intelligence to cause sorrow to others. b For the first accused I impose the following sentence:– Count 1, 5 years. Count 10, N100,000 or 3 years. c Second accused:– Count 1, 5 years. Count 8, 3 years. Count 9, 3 years. d First and second sentences to run concurrently, Third accused:– Count 1, 3 years. e Count 8, N50,000 or 2 years. Count 9, N50,000 or 2 years. Fourth accused:– f Count 1, 3 years. Count 8, N50,000 or 2 years. Count 9, N50,000 or 2 years. g With regard to third and fourth accused persons sentence in Count 1 to start running from the date of their arrest 23rd August, 1995 and 17th August, 1995, respectively. For third and fourth accused Counts 8 and 9 to run concurrently.