Does a bank have an absolute power to consolidate the accounts of its customer?

UBA Plc v. Salman [2019] 2 NWLR (Pt. 1656) 304 at 325, paras. C-F, per Uwa, JCA:

“There is no doubt in law that a banker may consolidate the accounts owned by a customer in his own right, unless precluded by agreement, express or implied from the course of business from doing so, in order to ascertain and treat as the balance, the amount standing to the credit of the customer. It is a prudent way open to the banker to assess the financial worth with it of that customer. It is a different thing where a banker opens two accounts for a customer, one in the customer’s own name and the other in a business name or in the name of an incorporated body under his aegis or control: See British and French Bank Ltd v. Opaleye (1962) 1 All NLR 26; (1962) 1 SCNLR 60.”

Notes:

What happened in the above case was that the Respondent operated three accounts with the Appellant – one of which was a savings account. The other two accounts which were the current and loan accounts were tied to a loan which he obtained from the Appellant. The Respondent’s case was that on 12/3/2012, he tried to withdraw the sum of N300,000 from his savings account but was refused by the Appellant on the ground that he had not redeemed the loan he took from the bank. The Appellant claimed that after the deduction of the Respondent’s debt, the Respondent did not have up to a balance of N300,000 in his remaining two accounts. From the evidence before the Court, it was clear that there was no lien on any of the Respondent’s accounts as at 12/3/12 when his withdrawal slip/cheque was dishonoured. The Respondent’s account had the sum of N1,090,644.11 which was moved by the Appellant on 19/3/2013. Aggrieved, the Respondent sued the Appellant and Judgment was entered in his favour. Dissatisfied, the Appellant appealed to the Court of Appeal.

In dismissing the appeal, the Court of Appeal held that the appellant had no reason to have refused the payment because the alleged consolidation or lien on the Respondent’s current and loan accounts did not take place until 19/3/2013 and that the exercise of lien over the Respondent’s account was a mere afterthought.

The Court further relied on the statement of the law by Uwaifo, JSC in Joe Golday Co. Ltd. v. Co-Operative Development Bank Plc (2003) LPELR – 1617 SC quoted above. The reasoning of Uwa JCA in application of the principle was quite impressive. His Lordship was of the view that:

“In the present case, there was an implied agreement that the accounts could not be consolidated by the appellant for the purpose of recovering its loan. The DW1 the Appellant’s witness under cross-examination admitted that the loan granted to the Respondent was for asset financing and that the collateral for the loan are the assets and the salary account of the Respondent. The assets are vehicles of which the spare keys were deposited with the Appellant. Also, that as at 17th August, 2016 when he testified, the Appellant had not written any demand letter to the Respondent to pay his debt. I agree with the submissions of the Learned Counsel to the Respondent that, where no demand had been made on the Respondent to pay, the Appellant’s right of lien had not accrued. The Bank is entitled to combine two or more accounts kept by a customer, unless precluded by agreement, express or implied, from the course of business from so doing. The conditions of the offer of the asset finance facility were clearly stated in Exhibit D5 which included the asset to be registered in the joint names of the Bank and the customer, submission of the original documents and spare keys of the assets (two vehicles), clauses, 10 and 11. In Exhibit D6, the Respondent also had an undertaking that he would not close his account No. 00550020030223 with the Appellant. The DW1 also admitted that Exhibit D7 defined the Appellant’s right to recover its loan and the Respondent’s obligation to pay. There is nothing on record to show that the Appellant had the right of lien or the power to consolidate the Respondent’s accounts. Exhibit D7 tendered by the Appellant’s witness specified how the loan granted to the Respondent will be liquidated.”

Upon a careful consideration and without any equivocation, his Lordship further clarified when he held thus:

“I hold that there is an implied agreement between the Appellant and the Respondent that the accounts of the Respondent shall not be merged for the repayment of his debt.”

FULL JUDGMENT

UWA, J.C.A. (Delivering the Leading Judgment): The appeal is against the Judgment of the Kwara State High Court presided over by A.S. Oyinloye, J. delivered on the 25th day of January, 2017.

The respondent as claimant at the trial Court claimed against the appellant by a writ of summons taken out on the 19th day of July, 2013 for the following reliefs:

“(1) A Declaration that the dishonor of the claimants withdrawal slip is null and void and a flagrant breach of the Defendant’s contractual duty to the claimant.
(2) A sum of N5m (five Million Naira) only being the general damages for breach of contract, negligent (sic) and loss of reputation.”

The background facts are that the respondent operated the following accounts with the Appellant:

(1) Current account with account number 1011721601 (Exhibit D1)
(2) Loan account with account number 0055C100014988 (Exhibit D3A)
(3) Savings account with account number 2052907171 (Exhibit D2)

On the part of the Appellant, it was made out that the Respondent owed the Appellant in his Current and Loan Accounts but had money in his savings Account. The Respondent in his pleadings at the trial Court made out that on 12th March, 2012, he wanted to withdraw the sum of N300,000.00 (Three Hundred Thousand Naira) from his savings account but was not allowed by the Appellant. The respondent admitted having collected a loan of N3,710,000.00 (Three Million Seven Hundred and Ten Thousand Naira) from the Appellant which he has not repaid and that as at 12/3/12 he was still owing the Appellant over N1 Million (One Million Naira) and had about N1,093,347.50 in his savings account. The Appellant alleged that after the deduction of the respondent’s debt to the appellant, the respondent did not have up to a balance of N300,000.00 (Three Hundred Thousand Naira) outstanding in his two accounts. Also, that the respondent had agreed to pay back N500,000.00 (Five Hundred Thousand Naira) as part payment for the loan.

At the close of the trial, judgment was given in favour of the Respondent with N500,000.00 (Five Hundred Thousand Naira) awarded as general damages against the Appellant. The appellant was dissatisfied with the judgment of the trial Court, thus this appeal.

The Appellant distilled Seven (7) issues for the determination of the appeal thus:

  1. “Whether the failure of the learned trial judge to consider and pronounce on the sole issue formulated by the Appellant before the Court was/is a denial of the Appellant’s right to fair hearing and whether the decision of the learned trial judge is a nullity. (Ground 1).
    2. Whether the learned trial judge was wrong in law to have raised the issue of retrospective consolidation of the Respondent’s accounts suo motu without calling upon the parties to address him on the point. (Ground 2)
    3. Whether the Appellant was/is right in the circumstances of this case on appeal to disallow the Respondent from withdrawing money from his savings account when he is indisputably heavily indebted to the Appellant in his current and loan accounts. (grounds 3, 4, 6, 8, 11,12 and 13)
    4. Whether Exhibit D7 was wrongly relied upon by the trial Court and whether the decision of the trial judge would have been different if he had not relied on Exhibit D7 (Grounds 5 and 7).
    5. Whether the learned trial judge misapprehended the case of the Respondent and defence of the Appellant and whether the said misapprehension has occasioned a miscarriage of justice (Ground 9).
    6. Whether the Respondent has failed to proved (sic) his case before the trial Court and his case ought to have been dismissed. (Grounds 10 and 16)
    7. Whether the general damages of N500,000 (Five Hundred Thousand Naira) awarded by the trial Court to the Respondent was wrongful and has occasioned a miscarriage of justice. (Grounds 14 and 15)”

The Respondent on his part adopted the issues as formulated by the Appellant.

In arguing his first issue, the learned counsel to the Appellant submitted that what gave rise to the suit at the lower Court was the appellant’s refusal to allow the respondent withdraw money from his account with the Appellant. The Appellant made out that the Respondent was indebted to the Appellant in other accounts operated by the Respondent which gave rise to the lien on the Respondent’s savings account. It was alleged that the learned trial judge failed to consider and pronounce on the sole issue for determination formulated by the Appellant but, that the trial Court formulated three issues suo motu for determination. It was submitted that the failure of the learned trial judge to consider and pronounce on the sole issue for determination formulated by the appellant is a denial of the Appellant’s right to fair hearing under Section 36(1) of the 1999 Constitution (as amended). It was argued that Courts are bound to consider all issues placed before them. See Akpan v. F.R.N.[2012] 1 NWLR (Pt. 1281) 403 at 421, Paras. C-D, Ezeugo v. State [2013] 9 NWLR (Pt. 1360) 508 at 581 Para. A and Ekunola v. CBN [2013] 15 NWLR (Pt. 1377) 224 at 266 Para. E.

It was submitted that the decision of the trial Court is a nullity for failure of the Court to consider and pronounce on the sole issue formulated by the Appellant. Further, that the three issues formulated by the trial Court evaded the sole issue formulated by the appellant and that the failure of the trial Court to call on the parties to address it on the fresh issue constitutes a denial of the Appellant’s right to fair hearing. It was argued that the three issues formulated by the trial Court did not answer the sole issue formulated by the Appellant before the trial Court. See Anambra State Govt. v. Asha [2013] 3 NWLR (Pt. 1341) 236 at 256 Para. A. We were urged to nullify the proceedings before the trial Court.

On the Appellant’s second issue, it was submitted that in the pleadings and the evidence of the parties, the issue of retrospective consolidation of the accounts of the Respondent was not raised. It was argued that the issue of retrospective consolidation of accounts was raised for the first time by the learned trial Judge in his Judgment. Further, that the parties were not invited by the trial Court to address the Court on the above issue raised by the learned trial Judge. See C.K. & W.M.C. Ltd. v. Akingbade (2016) 5 SC 156 at 183, [2016] 14 NWLR (Pt. 1533) 487; Nurudeen Adewale Arije v. FRN [2014] NCLR 5318 at 30 Paras. B- F, H. B. Adejumo v. David Hughes and Company Limited (1989) NCLR 1604 at 18-19, Paras. D-A. We were urged to declare the proceedings a nullity. It was concluded on this issue that the appellant was denied a fair hearing and we were once again urged to set aside the entire proceedings. See Anambra State Government v. Asha [2013] 3 NWLR (Pt. 1341) 236 at 256 Para. A. On the third issue, the Appellant argued that it placed a lien on the Respondent’s savings account such that he could not withdraw money from it. It was submitted that the Respondent breached the agreement with the Appellant when he transferred his salary account, which was for the repayment of the loan to other banks. It was submitted that the Respondent had proposed repaying the loan by monthly installment of N500,000.00 (Five Hundred Thousand Naira). It was submitted that the Respondent admitted defaulting in repaying the loan, thus the lien on his savings account. See Pharma Limited v. Alhaji Salisu Hussaini & Anor. (2013) NCLR (2469). Situations or conditions under which a lien will arise were highlighted while reliance was placed on the case of Faslat Adepoju v. The State (2014) NCLR 4411.

Further, that since the Respondent admitted his indebtedness to the Appellant, the appellant had a right to disallow the withdrawal from his savings account. Also, that the Respondent failed to prove that he is entitled to withdraw any money from his account in the circumstances of his indebtedness to the Appellant and having defaulted with the repayment. It was argued that the appellant by banking principle of consolidation had the right in law in the circumstances to consolidate or combine the accounts of the Respondent to ascertain the amount credited to the Respondent as a customer. See British and French Bank Ltd v. Opaleye (1962) 2 NSCC 21, Allied Bank v. Akabueze (1997) 6 SCNJ 116 at 135 LINES 22-29 and Joe Golday Co. Ltd. v. CDB Plc [2003] 5 NWLR (Pt. 814) 586 at 611 Paras. B-C. Also, Fidelity Bank Plc v. Okwuowulu [2013] 6 NWLR (Pt. 1349) 197 at 224 Paras. B-D. It was concluded on this issue that what the Appellant did to the Respondent’s accounts is acceptable and a standard practice in the banking industry to treat the debtor customer’s accounts as one, placing a lien on the savings account of the Respondent and consolidating his accounts. See Joe Golday Co. Ltd (supra). We were urged to hold that the Appellant had the right to disallow the Respondent from withdrawing money from his account while owing the appellant in two other accounts.

The fourth issue is whether the trial Court wrongly relied on Exhibit D7, the purported agreement between the parties which was said not to have been executed and which ought to have been discountenanced by the trial Court. See, Ezeugo v. Anambra State [2013] 9 NWLR (Pt. 1360) 508 at 581, Para. C. It was submitted that parties cannot by consent concede to an inadmissible evidence as admissible. See Ezeugo v. Anambra State  (supra), also, FBN Plc v. Tsokwa [2004] 5 NWLR (Pt. 866) 271, Mobil Oil Nig. UNLTD v. Rabiu (2003) FWLR (PT. 149) 1546, lawson v. Afani Cont. & Co Ltd [2002] 2 NWLR (Pt. 752) 585 Ratio 17; Yero v. Union Bank of Nigeria [2000] 5 NWLR (Pt. 657) 470, Owena Bank (Nig) Plc v. Punjab National Bank [2002] 5 NWLR (Pt. 658) 635 Ratio 4 and Raimi v. Akintoye [1986] 3 NWLR (Pt. 26) 97. It was concluded on this issue that the decision of the trial Court would have been different if it had not wrongly relied on Exhibit D7. We were once again urged to set aside the judgment of the trial Court.

The appellant’s issue five alleged that the appellant’s defence was not considered by the trial Court, that is, that the appellant exercised its right of lien on the respondent’s savings account before it subsequently consolidated the current account, savings and loan accounts because the respondent was indebted to the appellant. It was submitted that there was nothing retrospective in the consolidation of the accounts. It was also argued that the trial Court did not properly evaluate the evidence before it. We were urged to evaluate the evidence before the trial Court. The Judgment of the trial Court was said to be perverse.

The Appellant’s sixth issue also faulted the evaluation of the evidence before the trial Court. It was alleged that the Respondent failed to prove his case before the trial Court and that the case ought to have been dismissed. See Olakunle Elias v. Omobare (1982) S.C.C. 25 at 46. Also, Olusanya v. Osinleye [2013] 12 NWLR (Pt. 1367) 148 at 171 Paras. F-G S. C. and Lagos State Govt. v. Toluwase [2013] 1 NWLR (Pt. 1336) 555 at 580 Para. B-F.

In the Appellant’s seventh issue, the damages awarded by the trial Court was said to be wrongful. It was alleged that the Respondent abandoned his claim for damages in his final address, pages 149 to 153 of the records. It was argued that no specific sum was claimed as general damages and no evidence was led to prove same. Reference was made to paragraphs 8 and 9 of the Respondent’s pleadings to the effect that a vital witness was not called to testify to prove general damages. It was argued that the Respondent pleaded negligence without giving the particulars of the negligence and without leading evidence to prove the duty of care, breach of that duty and the damage suffered. It was submitted that the learned trial Judge somersaulted when he held that the Respondent was entitled to only nominal damages not being a trader/businessman but went ahead and awarded general damages having held that the Respondent failed to prove any actual damage. It was also argued that where there is no breach of contract, there could not be any award of damages. See Oceanic Bank International Plc v. Abeokuta Commercial & IND. Company Limited.

On the other hand, without conceding that the Respondent is entitled to nominal damages, it was submitted that the sum awarded is ridiculously high and cannot be termed “nominal damages” as held by the trial Court at page 228 of the printed records of appeal. On definition of nominal damages, reference was made to The Shell Petroleum Development Company Ltd v. Anthony Nwabueze (2013) NCLR 2149. Also, Akinwunmi Giwa v. Hon. Ola Jones (2014) NCLR 3527 PP. 39-40, Paras. E-E. We were urged to set aside the award of general damages. See, Ahmed v. CBN [2013] 2 NWLR (Pt. 1339) 524 at 541-542 Paras. G-C. Where this Court listed instances when an award of general damages by the trial Court could be set aside.

On the part of the Respondent, the learned counsel to the Respondent adopted and relied on his brief of argument filed on 17th August, 2017 but deemed properly filed and served on 27/9/17 as his argument in this appeal in urging us to dismiss the appeal. The learned counsel adopted the issues as formulated by the appellant and responded in the order the issues were argued by the learned counsel to the appellant. In responding to the first issue, it was submitted that the sole issue formulated by the appellant at the lower Court was covered by the three issues formulated by the learned trial judge and did not amount to abandonment of the issue formulated by the appellant. The learned counsel to the respondent conceded to the appellant’s right to place a lien on the account of the respondent in this case, the savings account, on which Exhibit “A” was issued which was consolidated with the loan account, reference was made to Exhibit “3”, page 85 of the printed records.

It was submitted that the trial Judge’s issues one and two are not lien issues but a variation of the sole issue formulated by the appellant. It was argued that the Court can formulate issues for determination if the one formulated by the parties are not precise or capable of resolving the conflicts between the parties. See S. B. Plc v. D. V. (Nig.) Ltd (2004) All FWLR (Pt. 758) 945 at 961 Paras. C-D. Also, Akpan v. The State (2001) FWLR (56) 755 at 961, Paras. C-D, Nwuke v. Union Bank (2009) All FWLR Pt. 530 and Fed. Min. of Health and Anor. v. Comet Shipping Agencies Ltd. (2002) 4 5 SC 110 at 120-121. It was concluded on this issue that the trial Court did not formulate any new issue.

On the second issue, it was submitted that retrospective consolidation of the Respondent’s accounts was not raised suo motu by the trial judge. Without conceding that the appellant had a right to consolidate the Respondent’s accounts, it was submitted that, as at the presentation of Exhibit “1” on the 12th March, 2012 the accounts had not been consolidated but was consolidated on 19th March, 2013, thus the consolidation could not have been retrospective. Further, that retrospective consolidation of accounts was not an issue raised suo motu by the trial judge but, an issue highlighted by the Respondent flowing from the cross-examination of the DW1, page 191 of the printed records of appeal.

In respect of issue three, it was submitted that the Appellant had no right to disallow the Respondent from withdrawing money from his savings account. It was argued that the bank was duty bound to honour the customer’s cheque on presentation when the customer has sufficient amount in his account to cover the cheque, where the bank fails to honour its customer’s cheque, the bank would be liable to the customer in damages. See F.B.N. v. Moba Farms Ltd (2005) 1120 at 1140; Diamond Bank Ltd v. Partnership Investment Co. Ltd (2010) All FWLR (Pt. 512) 1098; Agbanelo v. U.B.N. Ltd (2000) FWLR (Pt. 512) 2197 and U.B.N. Plc v. Chimaeze (2014) All FWLR (Pt. 734) 48 at 72-73. It was argued that the appellant did not controvert or contradict the fact that it refused to honour the payment of the sum of N300,000.00 which the respondent tried to withdraw from his account with a withdrawal slip. See Onyeakagbu v. African Dev. Insurance Co. Ltd (2005) All FWLR (Pt. 289) 1379 at 1881 Paras. F-B. It was argued that as at 12th March, 2012 when the payment was refused, the appellant had no reason to have done so. It was submitted that the lien over the Respondent’s account was an afterthought. It was also argued that the case of Pharma Ltd. v. Alhaji Salisu Hussaini & Anor (supra) and Faslat Adepoju v. The State (supra) relied on by the appellant are inapplicable. It was conceded that a banker may consolidate the accounts of its customer in its own right unless precluded by express or implied terms of agreement in course of business from doing so. See Fidelity Bank v. Okwuowulo (2012) All FWLR (Pt. 644) 151 at 167-168. It was further submitted that the evidence of the DW1 under cross examination was to the effect that the collateral for the loan are the assets and the salary account of the respondent. Further, that no demand to pay had been made by the appellant before its refusal to pay the money the respondent wished to withdraw from his savings account on 12th March, 2012. It was argued that the appellant could only recover its loan by the terms as contained in Exhibit D7 and allied documents at pages 125 to 130 of the printed records of appeal. It was submitted that these documents did not give the appellant, the right of lien or the power to consolidate the accounts of the respondent. It was submitted that the cases of Joe Golday Co. Ltd v. C.D.B Plc (supra) and Fidelity Bank v. Okwuowulu (supra) cited by the appellant are not applicable.

On the fourth issue, it was submitted that Exhibit D7 was pleaded in the Appellant’s amended statement of defence, pages 114 to 130 of the records and in support of its case. Being a document that was pleaded and relevant to the fact in issue it must be admitted and acted upon by the Court. It was submitted that since the appellant tendered Exhibit D7, it was her duty to ensure that it was properly executed, failure was argued to be the fault of the appellant and the appellant cannot resile from it. It was argued that a party should not be allowed to benefit from its own wrong, in this case Exhibit D7 which was not executed was said to be the fault of the appellant. See Teriba v. Adeyemo [2010] 11 NWLR (Pt. 1211) 242 at 263-264 Paras. F-A and A.G. Rivers State v. A.G. Akwa Ibom State [2011] 8 NWLR (Pt. 1248) at 186-187. It was submitted, (without conceding that Exhibit D7 was wrongly relied upon by the trial Court) that the testimony of DW1 under cross examination was clear to the effect that the collateral for the loan were the two vehicles, the spare keys were with the appellant as well as the salary account of the appellant. The trial Court was said to have properly relied upon Exhibit D7.

On the fifth issue, it was submitted that the right to place a lien and the right to consolidate the accounts are one and the same. It was submitted that the respondent is not challenging the Appellant’s right of lien or the right to consolidate the accounts of a customer indebted to it but rather that as at the time of presentation of Exhibit “1’, the accounts of the Respondent had neither been consolidated nor any lien placed on it. The respondent agreed he was owing the appellant some money at the time he presented Exhibit “1” but, no lien or combination of the Respondent’s accounts had taken place. Therefore, consolidation of the accounts or lien is not a defence that would justify the Appellant not honouring the Respondent’s mandate to pay. We were urged to hold that no miscarriage of justice has been occasioned.

Under issue six, it was submitted that the crux of the respondent’s case at the lower Court is that his mandate to pay was wrongly refused by the Appellant vide Exhibit “1” the withdrawal slip. It was submitted that this was not denied by the Appellant but only stated that it was justified in doing so because the Respondent was owing, which is an admission of the Respondent’s allegation against the appellant which was an admission of the respondent’s allegation against the appellant which requires no proof. See Section 75 of the Evidence Act, Oyewinle v. Iragbiji (2004) All FWLR (Pt. 73) 1536 at 1576, and S.B. Nig. Ltd v. N.D.I.C. (2014) All FWLR (Pt. 758) 985 at 1013-1014 amongst others.

Further, that the averment of the respondent in his statements on oath were not controverted. See Onyeakagbu v. African Dev. Insurance Company Ltd (2005) All FWLR (Pt. 289) 1379 at 1394 and G.E.I.O. (Nig.) Ltd v. Q.O. & G.S. (2016) All FWLR (Pt. 838) 842 at 864 Para. G.

On the seventh and last issue, it was submitted that the respondent’s claim for damages was not abandoned, that is the claim of N5 Million Naira (Five Million Naira) as damages for the breach of contract between him and the appellant. Reference was made to paragraph 12 (2) of the amended statement of claim, page 75 of the records. Also, paragraph 8 of the Respondent’s statement on oath was referred to, to the effect that the act of refusal to pay the respondent was done in the presence of a business partner who had previously held him in high esteem. Further, that paragraphs 8 and 9 of the statement on oath of the respondent at page 18 of the records were unchallenged and uncontroverted because the respondent was not cross examined on it. See Oredola Okeya Trading Co. v. B.C.C.I. (2015) All FWLR (Pt. 806) P. 284 at P. 296 Para. D and C.B.N. v. Okojie (2015) All FWLR (Pt. 807) P. 478 at P. 501, Para. F.

Further, the learned counsel to the respondent defined damages as the sum of money which a person wronged is entitled to receive from the wrong doer as compensation for the wrong. It is money claimed by or ordered to be paid to a person as compensation for loss or injury, assessment of damages is based on pleadings and the evidence adduced. See Ahanonu v. Chukwuemezie (2016) All FWLR (Pt. 829) 1008 at P. 1035 Para. F-G, U.B.N. Ltd v. Chimaeze (2014) All FWLR (Pt. 734) 48 at 71 Paras. B-C. Further, that where the claim for damages by the respondent was not challenged by the appellant, the lower Court was right to have granted same. Also, that it is at the discretion of the Judge to determine the quantum of damages to be awarded in a given case. We were once again urged to dismiss the appeal.

In his reply brief, the learned counsel to the appellant argued that the points on consolidation of the Respondent’s account and the retrospective consolidation of the Respondent’s accounts are new points which were not canvassed at the lower Court and needed the leave of this Court sought and granted before these issues could be argued on appeal. See Ekwenugo v. The FRN & Anor (2000) FWLR (Pt. 63) 99 at 117 and Attorney General Oyo State v. FairlakesUkpong v. Commissioner for Finance and Economic Development Akwa Ibom State (2007) All FWLR (Pt. 350) 1246 amongst others. We were urged to discountenance the new issues canvassed in the Respondent’s paragraphs 4.05-4.08, 5.02-5.05, 8.04 and 10.01-10.09 of the Respondent’s brief of argument.

On the power of the Court to formulate issues suo motu, it was submitted that the trial Court ought not to have formulated issues outside the pleadings and the evidence of the parties. Also, that the issues formulated by the trial Court did not clarify the issues formulated by the parties in the case that led to the appeal.

Further, that the case presented by the Respondent at the lower Court was for an alleged breach of contract and not consolidation of the Respondent’s account by the Appellant. Also, that the Respondent could not in law make use of the alleged movement of money from the Respondent’s savings account to the loan account on 19th March, 2013 when the event of this date was not pleaded by the respondent. It was argued that Exhibit D7 not having been executed by the parties is an inadmissible document which cannot be admitted in evidence even by consent of the parties. See Dr. Kenneth Ojo v. Abt Associates Incorporated & Anor (2014) NCLR 3768 PP. 33 – 34 Paras. E-A. We were urged to discountenance the argument and submissions under issue six (6) as lien is a defence in law and does not constitute an admission.

Further, that once the Court fails to restrict itself to issues joined by the parties in their pleadings, the Court is said to have misapprehended the nature of the case which has led to a miscarriage of justice. We were urged to set aside the decision of the trial Court and hold that the appellant is not liable to the Respondent.

I will determine the issues formulated by the appellant, adopted by the Respondent in the same order in which they were argued. Under issue one, the appellant alleged that the learned trial judge failed to consider and pronounce on the sole issue formulated by the Appellant before the trial Court, which resulted in a denial of fair hearing. The sole issue formulated on behalf of the appellant as defendant in the lower Court is:

“Whether having regard to the admission of the claimant that he is owing the Defendant more than the money that the claimant had in his savings account, the Defendant was right in law to have placed a lien on the savings account of the claimant and to disallow him on 12th March, 2012 to withdraw money from his savings account.”

While the respondent as claimant raised the following two issues:

  1. “Whether the Defendant was not wrong to have dishonoured the claimant’s mandate to pay when the latter had over and above the amount in Exhibit “1” in his savings (sic) account.
    2. Whether the defendant is liable to pay damages to the claimant for its refusal to honour the claimant’s mandate to pay?”

From the above issues formulated by the parties for determination, the learned trial judge reformulated the following issues:

  1. ”Whether the Defendant can combine/consolidate a customer’s Account?
    2. Whether the consolidation done in this case has the support of the law?
    3. Whether general damages ought to be awarded?”

Looking at the issues formulated by the learned trial Judge, being challenged, the trial Court’s issues one (1) and two (2) cover the sole issue formulated by the appellant for determination as well as those formulated by the Respondent in his issue one. The trial Court’s third issue is similar to the Respondent’s second issue. It is trite that the Court has the power to formulate issues for determination in a case before it or to reformulate the issues for determination if the ones formulated by the parties are not precise or capable of resolving the conflicts between the parties. The essence is to clarify the issues to be determined in respect of the parties, even at the appellate level. It is settled law that the Court can adopt the issues framed by either of the parties, modify or reframe the issues formulated for determination by the parties. See Unity Bank Plc & Anor vs. Bouari (2008) 2 SCM 193; (2008) LPELR – 3411 SC at PP. 21 – 22, Paras. A-B; Emeka Nwana v. FCDA & Ors. (2004) 7 SCM 25; Kayode v. State (2016) LPELR – 40028 (SC) PP. 8 – 9, Paras. C-A. In Unity Bank Plc & Anor (supra) the Supreme Court made it clear that the essence of a Court reformulating issues by a party or parties or counsel is to give precision and clarity to the issues for determination. See also Musa Sha (Jnr) and Anor. v. Da Rap Kwan & 4 Ors (2000) 5 SCNJ 101. It is wrong therefore for the appellant to have argued that the trial Court raised new issues and resolved same without calling on the parties to address it on the alleged new issues. The first issue is resolved against the Appellant.

The second issue alleged that the learned trial judge raised the issue of retrospective consolidation of the respondent’s account suo motu without calling the parties to address him on it. I am of the view that the issue of retrospective consolidation of the respondent’s account is not a new issue raised suo motu by the learned trial judge. It is an issue that arose from the cross examination of the DW1 to the effect that as at the time the respondent’s withdrawal slip, (Exhibit “1”) was presented for payment, he had a balance of N1,090,644.14 in his savings account. (See Exhibit “2”) which money was moved from the savings account to the loan account on 19th March, 2013 as shown in Exhibit “3” (the respondent’s bank statement of the loan account) covering the period between 1st April, 2012 to 24th April, 2013, and that on 19/3/13, the respondent’s money was moved from his savings account to the loan account by the Appellant as evidenced by Exhibit “3”. This issue was addressed by the respondent’s learned counsel at page 151, paragraph 4.6 of the printed records to the effect that the consolidation of the respondent’s account was done on 19/3/13, whereas it was on 12/4/12 that Exhibit “1” was presented for payment and was dishonoured. The issue was not a challenge of the consolidation of the accounts but as at when Exhibit “1” was presented, it was dishonoured when the respondent had enough funds in his account yet to be consolidated. The learned trial judge at pages 218, 219, 220 and 221 merely pronounced on the submissions of the learned counsel to the respondent as well as evaluating the evidence of the DW1 in respect of the consolidation of the accounts which was the reason given by the appellant for not paying the sum of N300,000.00 that the respondent wished to withdraw from his account. The learned trial judge did not raise the issue of retrospective consolidation suo motu and decided on it. Both parties raised it in course of the trial. The second issue is resolved against the Appellant.

On the third issue, the question is whether the Appellant was right in the circumstances of this case to disallow the Respondent from withdrawing money from his savings account when he is indebted to the appellant in his current and loan accounts?
No doubt banker/customer relationship existed between the parties and the respondent had taken out a loan tied to his current and loan accounts. The respondent’s grouse is that the appellant did not honour the request to pay him the sum of N300,000.00 he wished to withdraw from his savings account, Exhibit “1” from his savings account on 12/3/12 when he had enough funds in his account. The bank is duty bound to pay its customer’s money on request as long as the customer has enough funds to cover the cheque or withdrawal slip. To do otherwise would be a breach of the appellant’s duty to pay the respondent his money when requested. The appellant did not deny the act of refusal to honour the respondent’s withdrawal slip through which the sum of N300,000.00 was to be paid. On the duty of a bank/banker to honour a customer’s cheque, the Supreme Court in the case of First African Trust Bank Ltd v. Partnership Investment Company Ltd (2003) LPELR – 1280 (SC) at P. 41, Para. A-E, his Lordship Iguh, JSC held thus:

“Now, a banker without doubt, is bound to pay cheques drawn on him by a customer in legal form provided he has in his hands at the time sufficient and available funds for the purpose or provided the cheques are within the limits of an agreed overdraft. See London Joint Stock Bank v. Macmillan and Arthur (1918) AC 777 at 789 H.L.; Joachimson v. Swiss Banks Corporation (1921) 3 KB 110 at 127; Union Bank of Nigeria Ltd. v. Nwoye [1996] 3 NWLR (Pt. 435) 135. It needs be emphasized that there must be sufficient funds to cover the whole amount of the cheque presented for in the absence of special arrangement, there is, as a general rule, no obligation on the banker to pay any part of a cheque for an amount exceeding the available balance. The banker only contracts with the customer to honour cheques when he has “sufficient” and “available” funds in hand. See, Carew v. Duckworth (1869) LR 4 EXCH. 313; Joachimson v. Swiss Bank Corporation (supra).
Similarly, in UBN Plc v. Chimaeze (2014) LPELR – 22699 (SC) at P. 43, Paras. A-F; (2014) All FWLR (Pt. 734) 48 at 72-73; [2014] 9 NWLR (Pt. 1411) P. 166 his Lordship, Ariwoola, JSC emphasized that:

“It is the duty of the banker to its customer to honour and pay cheques drawn on it by the customer as long as it has in its possession at the material time, sufficient and available in customer’s account and a cheque is presented but, payment is refused, the holder is entitled to treat the cheque as dishonoured, even if requested to represent. See Ide Chemists Limited v. National Bank of Nigeria Limited (1976-1984) 3 NBLR 111 at 118. In Allied Bank (Nig.) Limited v. Akubueze [1997] 6 NWLR (Pt. 509) 374; (1997) 6 SCNJ 166 this Court held, inter alia, that a bank is bound to honour cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque in respect of the relevant account and that refusal to honour the cheque will amount to a breach of contract which would render the banker liable in damages. In the same vein, in Union Bank of Nigeria Limited v. Nwoye [1996] 3 NWLR (Pt. 435) 135, this Court held that 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.”

The appellant did not contradict the evidence of the respondent that he had up to the sum of N300,000.00 (Three Hundred Thousand Naira) as at 12/3/12 when he presented the withdrawal slip that was not honoured by the appellant. I hold that the appellant had no reason to have refused the payment because the alleged consolidation or lien on the respondent’s current and loan accounts did not take place until 19th March, 2013 as per Exhibit 3. I agree with the submissions of the learned counsel to the respondent that the exercise of lien over the respondent’s account was an afterthought. No doubt, the bank is permitted to exercise its power of lien over their customer’s account or to consolidate accounts. The respondent’s case is clear to the effect that there was no lien on any of his accounts as at 12/3/12 when his withdrawal slip/cheque was dishonoured. The DW1 (Oyebanji Adegboye) the only witness called by the appellant in his evidence before the trial Court admitted that as at 12th March, 2012, the respondent’s account had the sum of N1,090,644.11 which was moved on 19th March, 2013. On the other hand, the bank’s power to consolidate the accounts of its customer depends on the agreement or understanding express or implied from the course of business between the parties. In Joe Golday Co. Ltd v. Co-Operative Development Bank Plc (2003) LPELR – 1617 (SC) P. 26, Paras. B-E, his Lordship Uwaifo, JSC on the bank’s power to consolidate different accounts kept by a customer held that:

“There is no doubt in law that a banker may consolidate the accounts owned by a customer in his own right, unless precluded by agreement, express or implied from the course of business from doing so, in order to ascertain and treat as the balance, the amount standing to the credit of the customer. It is a prudent way open to the banker to assess the financial worth with it of that customer. It is a different thing where a banker opens two accounts for a customer, one in the customer’s own name and the other in a business name or in the name of an incorporated body under his aegis or control: See British and French Bank Ltd v. Opaleye (1962) 1 All NLR 26; (1962) 1 SCNLR 60.”

See also Zenith Bank Plc v. Omenaka & Anor (2016) LPELR – 40327 (CA) PP. 28-29, Paras. C-B and Fidelity Bank Plc v. Mr. Francis Okwuowulu & Anor (2012) LPELR – 8497 (CA) PP. 26-27, Paras. D-A; (2013) 6 NWLR (Pt. 1349) 197; (2012) All FWLR (Pt. 644) 151 at 167 – 168. In the present case, there was an implied agreement that the accounts could not be consolidated by the appellant for the purpose of recovering its loan. The DW1 the appellant’s witness under cross-examination admitted that the loan granted to the respondent was for asset financing and that the collateral for the loan are the assets and the salary account of the respondent. The assets are vehicles of which the spare keys were deposited with the appellant. Also, that as at 17th August, 2016 when he testified, the appellant had not written any demand letter to the respondent to pay his debt. I agree with the submissions of the learned counsel to the respondent that, where no demand had been made on the respondent to pay, the appellant’s right of lien had not accrued. The bank is entitled to combine two or more accounts kept by a customer, unless precluded by agreement, express or implied, from the course of business from so doing. The conditions of the offer of the asset finance facility were clearly stated in Exhibit D5 which included the asset to be registered in the joint names of the Bank and the customer, submission of the original documents and spare keys of the assets (two vehicles), clauses, 10 and 11. In Exhibit D6, the respondent also had an undertaking that he would not close his account No. 00550020030223 with the Appellant. The DW1 also admitted that Exhibit D7 defined the appellant’s right to recover its loan and the respondent’s obligation to pay. There is nothing on record to show that the appellant had the right of lien or the power to consolidate the respondent’s accounts. Exhibit D7 tendered by the appellant’s witness specified how the loan granted to the respondent will be liquidated.
In Akubueze’s case (supra), it was decided that the banker has a right to refuse to honour a request for withdrawal on the account on which the customer is owing not other accounts as was done in this case where the appellant failed to honour a cheque to be paid from the respondent’s savings account not the loan account. Also, in Golday’s case (supra) a customer’s accounts cannot be consolidated to recover a debt where (it is precluded by agreement express or implied from the course of business, as in this case, considering the contents of Exhibits D5 and D7. I hold that there is an implied agreement between the appellant and the respondent that the accounts of the respondent shall not be merged for the repayment of his debt. The third issue is resolved against the Appellant.

Under issue four, the appellant challenged the trial Court’s reliance on Exhibit D7 in that it was not executed and that the trial Court ought not to have relied on it. It is worthy of note that the appellant pleaded Exhibit D7 in paragraph 2 of its Amended Statement of Defence which was tendered through the appellant’s sole witness as a document relevant and in support of its case. Exhibit D7 is the loan agreement between the appellant and the respondent to ensure that the loan is repaid. Exhibit D7 is the appellant’s document and it is the duty of the appellant to ensure that it is properly executed as rightly argued by the learned counsel to the respondent. The execution of Exhibit D7 is one of the terms of the loan granted to the respondent, clause 5 in Exhibit D5. The failure to execute Exhibit D7 is the default of the Appellant who tendered it to back up its case, as the agreement that binds the parties in respect of the loan. The non-execution of the document should be blamed on the Appellant. Therefore, the appellant cannot turn around to challenge the utilization by the trial Court of the same document it failed to ensure its execution. I hold that the appellant who tendered Exhibit D7 in proof of its case ought not to question the validity or legality of the document. In A.G. Rivers State v. A.G. Akwa Ibom State [2011] 8 NWLR (Pt. 1248) at 186 – 187 Paras. E-A, the Apex Court on whether a party can rely on a document and question the legality of same document held thus:

“A party cannot rely or take the benefits of the contents of a document and at the same time turn round to question the legality of the same document. It is the rule of equity that one cannot approbate and reprobate.
Fakorede v. A.G., Western State 1972 1 All NLR (Pt. 1) PG. 178; Agidigbi v. Agidigbi [1992] 2 NWLR (Pt. 221) 98 Ladega v. Durosimi (1978) 3 SC 91.
It is a doctrine of justice and equity that it would be unjust and inequitable to blow hot and cold – this principle finds expression in the Latin maxim “Allegans Contraria Non Est Audiendus.” Tika-Tore Press Limited v. Abina & Ors. (1973) 1 All NLR (Pt. 11) 244; Ude v. Osuji [1998] 13 NWLR (Pt. 580) 1; Amavo Ltd v. B.T.M. Ltd [1991] 8 NWLR (Pt. 207) 37; Iga v. Amakiri (1976) 11 SC 1; Okonkwo v. Kpajie (1992) NSCC (Pt. 1) 349; [1992] 2 NWLR (Pt. 226) 633; Adeyemo v. Ida & Ors. [1998] 4 NWLR (Pt. 546) 504; Ravafric & Far Eastern Ltd v. John Chief Antenake & Ors. (1958) WRNLR 92; Oyeyemi v. Commissioner for Local Government, Kwara State [1992] 2 NWLR (Pt. 226) 661; W.A.E.C. v. Akinkunmi [2002] 7 NWLR (Pt. 766) 327; Iloabachie v. Iloabachie [2000] 5 NWLR (Pt. 656) 178.”

The Appellant at the trial tendered Exhibit D7 in support of its case but, turned around to argue that the trial Court ought not to have utilized the same Exhibit because it was not executed, which is clearly blowing hot and cold. It is trite that the Courts would not allow a person to benefit from his own wrong. In the case of Terba v. Adeyemo [2010] 11 NWLR (Pt. 1211) 242 at 263-264 Paras. F-A his Lordship, Tabai, JSC in this respect held that:

“A person cannot benefit from his own wrong. In its adjudicatory functions, the Court has a duty to prevent injustice in any given circumstance and avoid rendering a decision which enables a party to escape from his obligation under a contract by his own wrongful act or otherwise profit by his own wrongful act. In support of this, I rely on: Ekanem v. Akpan [1991] 8 NWLR (Pt. 211) 616; Adedeji v. National Bank (Nig.) Ltd [1989] 1 NWLR (Pt. 96) 212Ibekwe v. Maduka [1995] 4 NWLR (Pt. 392) 716; F.B.N. PLC v. May Med Clinics [1996] 9 NWLR (Pt. 471) 195; Seriki v. Are [1999] 3 NWLR (Pt. 595) 469.”

Exhibit D7 was tendered by the DW1 on behalf of the appellant as defendant as a document that defined the rights of the defendant and the obligations of the claimant (respondent) in respect of the loan. The appellant is wrong to turn around to fault the utilization of Exhibit D7 by the trial Court and terming same as illegal not having been executed. On the other hand, the evidence of the DW1 was clear to the effect that the collateral for the loan granted to the respondent are the two vehicles, the spare keys with the appellant and the salary account of the respondent. The appellant did not counter this as the evidence came from the appellant as defendant. The fourth issue is resolved against the appellant.

I will resolve issues five and six together as the issues challenge the evaluation of evidence by the trial Court. The respondent at the trial Court did not refute the fact that the appellant has a right to merge accounts of a customer that is indebted to it or to hold a lien over the account or accounts of the customer. The respondent’s case is that as at the date of presentation of Exhibit “1”, the accounts of the respondent had neither been consolidated nor a lien placed on them. The respondent did not deny owing the appellant as at the date Exhibit “1” was dishonoured. The accounts were consolidated on 19th March, 2013. The right to consolidate the accounts cannot be a defence of the appellant dishonouring the withdrawal slip, Exhibit “1”. The merger/consolidation cannot have a retrospective effect on the appellant’s mandate to pay, the refusal was therefore wrong. At page 191 of the printed records of appeal, the DW1 testified as follows:

“As at 12/03/2012, the amount standing to the credit of the claimant in Exhibit “2” is N1,090,644.14.
On 19/03/2013, the claimant’s money was moved from savings account to the loan account as evidenced by Exhibit 3. The loan granted to the claimant was for asset finance and the collateral for the loan of the claimant are 2:
(1) The Asset bought itself and
(2) Domiciliation of the claimant’s salary in our Bank. The assets purchased with the loan were 2 buses. The spare keys to the said 2 Buses are still with the defendant…
Exhibit D7 defines the rights of defendant and the obligations of the claimant in respect of the loan…
Before the claimant’s money was moved from savings Account to the Loan Account on 19/03/13, the defendant had not written a demand letter to the claimant.”

The evidence of the DW1 says it all. The respondent’s mandate from the above testimony was wrongly refused by the appellant. The appellant did not contradict the case put up by the respondent but, only made out that it was justified because the respondent was owing the appellant as at when Exhibit “1” was presented for payment. I hold that the learned trial judge properly evaluated the case as presented by both parties before arriving at his decision. Issues five and six are resolved against the appellant.

Under the seventh issue, the appellant alleged that the award of general damages to the respondent as claimant was wrongful. I would start with the meaning, nature and scope of general damages as given by the Supreme Court. In Cameroon Airlines v. Otutuizu (2011) LPELR – 827 (SC) 31, Paras.. C-D, his Lordship Rhodes-Vivour, JSC defined it thus:

“General damages are thus losses that flow naturally from the adversary and it is generally presumed by law, as it need not be pleaded or proved. See UBN Ltd v. Odusote Bookstores Ltd. [1995] 9 NWLR (Pt. 421) 558. General damages is awarded by the trial Court to assuage a loss caused by an act of the adversary.”

Similarly, in UBN Plc. v. Alhaji Adams Ajabule & Anor. (2011) LPELR – 8239 (SC) 32, Paras. C-D, his Lordship, Fabiyi, JSC held that:

“General damages are said to be damages that the law presumes and they flow from the type of wrong complained about by the victim. They are compensatory damages for harm that so frequently results from the tort for which a party has sued, that the harm is reasonably expected and need not be alleged or proved. They need not be specifically claimed. They are also termed direct damages; necessary damages.”

General damages are those which the law implies in every breach of contract. They are compensatory and need not be alleged or proved. As stated above, they need not be specifically claimed. They are for losses that flow from the adversary and awarded by the trial Court to assuage a loss caused by the adversary. See also the case of Wahabi v. Wilfred Omonuwa (1976) LPELR – 3469 (SC) 17, Paras. C-D; 4 SC (REPRINT) 62; (1976) ANLR 285. The respondent gave evidence to the effect that the act of dishonouring his withdrawal slip of N300,000.00 (Three Hundred Thousand Naira) was done in the presence of his business partner who had held him in high esteem. This evidence was not contradicted or challenged. General damages on the other hand are awarded as compensatory for the harm or damage done. The Court having held that dishonouring the respondent’s mandate to honour his withdrawal slip on 12/3/12 when he had enough funds in his savings account was a breach of the appellant’s contract with the respondent, he was entitled to the general damages claimed.

In respect of the quantum, the appellant alleged the amount awarded by the trial Court was ridiculously high. To this, I would be guided by legal authorities from the Apex Court, to the effect that general damages are as such as the Court would award in the circumstances of a case, in the absence of any yardstick which to assess the award except by presuming the ordinary expectations of a reasonable man. See Lar v. Stirling Astaldi Ltd. (1977) 11/12 S.C. 53; Omonuwa v. Wahabi (supra) and Yalaju-Amaye v. Associated Registered Engineering Contractors Ltd & Ors (1990) LPELR – 3511 (SC) P. 47, PARAS B – E; [1990] 4 NWLR (Pt. 145) 422; (1990) 6 SC 157.

In respect of quantum of general damages, general damages are those damages which the law, on its own, presumes or implies in every breach and every violation of a legal right. They flow naturally from the acts complained of and so the quantum need not be pleaded or proved as the damages are generally presumed by law. They are also always claimed at large since they are implied by law. Therefore, the manner or way in which general damages are quantified in our Courts, is by use of the objective test of the opinion or judgment of a reasonable man in the circumstances of a particular case. Every case is considered with its surrounding circumstances in determining the quantum of general damages. See Incar v. Benson Transport (1975) 3 SC, 117; Lar v. Stirling Astaldi Ltd. (1977) 11 – 12 SC, 53; Udofel Limited & Anor. v. Skye Bank Plc (2014) LPELR – 22742 (CA) and Rockonoh Prop. Ltd. v. Nitel Plc [2001] 14 NWLR (733) 468 at 493. In UBN Plc v. Ajabule (supra) at 27, Paras. B-D, at p. 178 paras. B-D, his Lordship Mohammed, JSC summed up the issue as to quantum in the following words:

“It was settled law that general damages are always made as a claim at large. The quantum need not be pleaded and proved. The award is quantified by what in the opinion of a reasonable person is considered adequate loss or inconvenience which flows naturally, as generally presumed by law, from the act or conduct of the Defendant. It does not depend upon calculation made and figure arrived at from specific items. See Odulaja v. Haddad (1973) 11 S.C. 357; Lar v. Stirling Astaldi Ltd (1977) 11 – 12 S.C. 53 and Osuji v. Isiocha (1989) 3 NWLR (Pt. 111) 623.”

On this note therefore, I hold that the award of general damages of N500,000.00 (Five Hundred Thousand Naira) to the Respondent by the learned trial judge is not perverse, also considering the fact that the respondent had claimed N5 Million Naira. The seventh issue fails and is resolved against the appellant.

All the issues having been resolved against the appellant, I hold that the appeal is without merit, I dismiss it in its entirely and affirm the decision of the trial Court. I award costs of N50,000.00 (Fifty Thousand Naira) in favour of the Respondent.

BARKA, J.C.A.: I was opportuned to have read in draft the Judgment just read by my learned brother CHIDI NWAOMA UWA JCA. I agree with every aspect of my Lord’s reasoning and conclusions including the award of damages made. I also agree with all orders made including that as to costs.

UGO, J.C.A.: I had the privilege of reading in draft the Judgment of my learned brother CHIDI NWAOMA UWA J.C.A. I agree with every aspect of it except the damages, particularly the quantum of damages awarded the respondent, which the lower Court fixed at N500,000.00. I am of the “view that that award was not only made on wrong principles, it is also outrageously high and erroneous and unreasonable having regard to the circumstances of the case. I note too that the trial judge himself had held in his judgment, rightly or wrongly, that the nature of the case is such that respondent cannot get more than nominal damages since he is neither a trader nor businessman. I quote His Lordship in the concluding part of his judgment at pages 228 to 229 of the records where he held thus:
“However, it is the law in this area of our jurisprudence that the status of the claimant/customer will determine the measure of damages.
“It has also been recognized that a customer/claimant gets only nominal damages if he is not a trader or businessman and if unable to prove actual damage that he sustained. See the decision in Access Bank Plc. V. M.F.C.C. supra at pages 476- 477. 
“In strict fidelity to the binding case law, I have carefully gone through processes filed by the claimant and paragraph 1 of the statement of claim gave out the status of the claimant when it was couched thus:
“The claimant is an honourable Member of the Kwara State House of Assembly and a legal practitioner of high repute.”
“From the above, I hold, with ease, that on the showing of the claimant himself, he is not a trader or businessman; I will therefore hold that the claimant is entitled to general damages but only a nominal one.
“In the circumstance of this case but on a final note, I discountenance the consolidation of the accounts of the claimant done by the defendant and I award to the claimant general damages assessed in the sum of 500,000.00 (Five Hundred Thousand Naira only) against the defendant for breach of contract.” (Italics mine)
It is most worthy of note that His Lordship stated specifically that the award was for breach of contract. That is even as respondent’s claim for damages of N5M was for:
2. A sum of 5M (Five Million Naira) only being the general damages for breach of contract, negligence and loss of reputation.
By awarding damages for only breach of contract, it follows that His Lordship took it that respondent did not prove negligence and loss of reputation and so didn’t merit award of damages on those grounds.
Respondent did not cross-appeal nor file a respondent’s notice pursuant to Order 9 Rule 2 of the Rules of this Court to urge us to sustain the award on those grounds, and that means this Court cannot grant the damages awarded him by the lower Court on unproved negligence in the conduct of appellant or loss of reputation suffered by respondent. That is the clear purport of Order 9 Rule 3 of the Court of Appeal Rules 2016 and the cases of Badmus v. Abegunde (1999) LPELR- 705 (S.C.) (Uwaifo J.S.C.) p. 12; Kayili v. Yilbuk [2015] 7 NWLR (Pt. 1457) 26 at 86 (Kekere-Ekun, J.S.C.); Orji v. Zaria Ind. Ltd (1992) 1 NWLR (Pt. 216) 124 at 128 (Akpata, J.S.C); The State v. Aibangbee & Anor. (1988) 2 NSCC 192 at 2019 ( Eso, J.SC.). In any event, by failing to cross-appeal, respondent concedes by implication that negligence and loss of reputation were not proved by him and the lower Court in order in awarding him damages for only breach of contract.

And coming to the said sole basis of the award of N500,000.00 as nominal general damages for ‘breach of contract’, it must first be pointed out that the term general damages is relative to awards for torts; it has no place in the consideration of award of damages for breaches of contract where the relevant term is simply damages. There is only one measure/principle guiding award of damages for breach of contract, namely, restitution of the claimant to the position he would have been, in money terms, had the contract not been breached. That principle/measure is called restitutio in integrum in Latin.

That is the time-honoured position of the law established by the case of Hadley v. Baxendale (1854) 9 EX 341 which has since become part of our common law. The principle of restitutio in integrum does not admit of award of even a Kobo more than what the claimant is proved to have actually lost from the breach as anything else is restitutio in oppulentiam (award of a windfall), which is not permitted: See Okongwu v. NNPC (1889) NWLR (Pt. 115) 296 at 309 paras. F-G (per Nnaemeka- Agu J.S.C.). See also Universal Vulcanizing (Nig.) Ltd v. Ijesha United Trading & Transport Company Ltd (I. U. T. T. C.) [1992] 9 NWLR (Pt. 266) 388 at 412 where it was stated (Kutigi J.S.C., as he then was) that:

“The object of awarding damages for breach of contract is to put the injured party, so far as money can do it, in the same position as if the contract had been performed. The injured party can never get more in damages than the loss which he has suffered. In fact, the injured party may sometimes even get less than the loss he has suffered under the exclusion principle of remoteness of damages as laid down in Hadley v: Baxendale (1854) 9 EX 341; (See also Koufos v. C. Czarnikow Ltd. (The heron 11) (1969) 1 A.C 350 H.L. Conttrill v. S & L. Building Society (1960) 1 WLR 753). Therefore, if the party injured has suffered (or proved) loss, he may win his action as in this case because breach of contract is actionable per se but he will get only nominal damages.” (Italics mine.)

In fact, as far back as 1972, the Supreme Court in Petetson Zochonis & Co. Ltd. v. Ogedengbe (1972)3 S.C. 94 at 98-99 (reconfirming its earlier decision in Swiss-Nigerian industries Ltd v Oanilo Boqo S.C.14/70 decided on 3/7/70) not only made the above position clear but also the inaptness of importing the tort terms of general and special damages into cases of breach of contract, saying:

“In the preparation of the claim for as well as in the consideration of an award in consequence of a breach of contract, the measure of damages is the loss flowing naturally from the breach and is incurred in direct consequence of the violation. The damages recoverable are the losses reasonably foreseeable by the parties and foreseen by them at the time of the contract as inevitable if one of them broke faith with the other. In the contemplation of such a loss there can be no room for claims which are merely speculative or sentimental unless these are specially provided for by the terms of the contract. It is only in this connection that damages can be properly described as “special” in the conception of contractual awards and it must be borne in mind that damages normally recoverable are based on the normal and presumed consequences of the breach complained of. Thus the terms “general” and “special” damages are normally inapt in the categorization of damages for the purposes of awards in cases of breach of contract. We have had occasion to point this out before (see Agbaje v. National Motors Ltd. S.C.20/68 dated 13th March, 1970) and we must make the point that apart from I damages naturally arising from the breach. No other form of general damages can be contemplated. “We think therefore that the argument of learned counsel for the defendants that the further award of £500 as general damages in this case could not be supported is well founded and it must be set aside.”

Towing the same line, it was again said (Karibi-Whyte, J.S.C) in Okongwu v. N.N.P.C. (1989) 4 NWLR (PT. 115) 296 at 315 that:

“These principles have been adopted by our Courts and applied in Nigerian Produce Marketing Board v. Adewunmi (1972) 1 All NLR (Pt. 2) 433 at p. 438; P.Z. & Co. Ltd. v. Ogedengbe (1972) 1 All NLR (PT. 1) 202 at 205-206. In NPM Board v. Adewunmi (supra) the Supreme Court referred with approval to its earlier decision in Swiss-Nigerian Wood Industries Ltd v. Danilo Boggo SC. 14/70 delivered on 3rd March, 1970 where it was stated, The terms “general” and “special” damages are normally inapt in the categorization of damages for the purposes of awards in cases of breach of contract. We have had occasion to point this out before (see Agbaje v. National Motors LtdS.C.20/68 dated 13th March, 1970) and we must make the point that apart from damages naturally arising from the breach, no other form of general damages can be contemplated.”

Incidentally, the major source of the flaw in the damages of N500,000.00 awarded by the trial Judge arose from this misconception that the principles guiding award of general damages for tort, for instance that award of general damages are at large, also apply to cases of breach of contract. Here, respondent’s case here is that he was only disallowed from withdrawing the sum of N300,000.00 in his account with appellant. The trial Judge also found that he only proved breach of contract and was entitled to even only nominal damages, so what is the justification for the award of a whopping sum of N500,000.00 which is almost twice what he was prevented from withdrawing? Can that be seriously called restitution within the principles here set out? I will hasten to say that it is even arguable whether the said sum of N300,000.00 respondent was disallowed from withdrawing can be properly called a ‘loss’ at all as to merit damages for breach of contract by way of restitution, more so when it is realised that the lower Court first granted respondent his first declaratory relief for nullification of combining of the said account with his loan account, which means his N300,000.00 continued to remain safely in his account. And assuming, without conceding at all, that respondent even actually suffered loss for which he could be properly awarded damages for breach of contract as restitution, the question still remains whether the trial judge was right in awarding him N500,000.00 damages when His Lordship also agreed that he was only entitled to ‘nominal damages.’ Can N500,000.00 be by any imagination nominal damages for loss of N300,000.00? Damages of N500,000.00 is with all due respect to His Lordship, a most outrageous and disproportionate award in the circumstances of this case. An occasion which warrants award of only nominal damage cannot be turned to a windfall of damages. See Badmus v. Abegunde (1999) 7 SCNJ 76 @ 106; (1999) LPELR-705 (S.C.) where the Supreme Court (Uwaifo J.S.C.) said (at p.17, LPELR) that:

 “I do not mean to suggest that an occasion which warrants only nominal damages can legitimately be turned into a mere benevolent award disproportionate to the real purpose of nominal damages award.”

Much as an appellate Court respects award of damages by a trial Court and will not intervene simply on the ground that it would have awarded a different sum if it were to be the trial Court itself, it will intervene, and has a duty to intervene, where it is clearly shown, as is apparent in this case, that the trial Court acted on wrong principles of law, or that the amount awarded is outrageously high (or ridiculously low), or that the amount was an entirely erroneous and unreasonable estimate having regard to the circumstances of the case. See Guardian Newspapers Ltd v. Ajeh [2011] 10 NWLR (Pt. 1256) 574 @ 603; Zik’s Press Ltd v. lkoku (1951) 13 WACA 188; Williams v. Daily Times (1990) 1 SC 23; [1990] 1 NWLR (Pt. 124) 1 at 49, 55; Oduwole & Ors v. Prof Tam David-West (2010) 3-5 SC (pt. 111) 183 at 195, [2010] 10 NWLR (Pt. 1203) 598; British Airways v. Atoyebi [2014] 13 NWLR (Pt. 1424) 253 at 287-288 & P. 289 (S.C.). Badmus v. Abegunde supra.

In the light of all the foregoing, I am of the opinion, and hold without the slightest hesitation, that the ‘nominal’ ‘general’ damages’ for breach of contract due the respondent, if awardable at all, should not have been more than N10,000.00 (Ten Thousand Naira) only. As shown earlier in this judgment, it was said in Universal Vulcanizing (Nig.) Ltd v. ljesha United Trading & Transport Company Ltd (I.U. T. T.C.) (1992) 9 NWLR (Pt. 66) 388 at 412 (Kutigi J.S.C., as he then was) that breach of contract is actionable per se and attract award of nominal damages. The principle of stare decisis enjoins me to follow decisions of the apex Court without question.

They bind us. In the result, and for reasons given above, I set aside the general damages of N500,000.00 awarded respondent by lower Court and substitute it with N10,000.00 (Ten Thousand Naira) nominal damages only. The appeal having succeeded in part as found by me. I also order that parties bear their costs.

Appearances:

Adedayo Adediji, Esq. with him, Adedapomola Lawal and H.O. Omonibi – for the Appellant.

Babatunde Olomu, Esq. with him, M.T. Imam Fulani, A.D. Ahmed, S.Y. Afolabi and S.Y. Ajumobi – for the Respondent.



Stephen Azubuike
Author: Stephen Azubuike
Stephen is a Legal Practitioner, Consultant, Mediator and Social Entrepreneur. He has successfully argued cases from the High Courts of various jurisdictions to the Appellate Courts. Desirous of implementing new legal solutions, he founded Stephen Legal, a firm in the business of providing innovative legal insights and easy solution in this information age. Stephen also serves as a volunteer at Prof. Pat. Utomi’s Centre for Values in Leadership in Lagos, given his passion for capacity building and leadership development.
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