Chartered Bank Limited V. First African Trust Bank Limited & Ors. (2005)

LawGlobal-Hub Lead Judgment Report

KUMAI BAYANG AKAAHS, J.C.A.

This is an appeal which was filed by the Plaintiff against the judgment of the Federal High Court, Lagos delivered on 3/6/99 by Justice T.A. Odunowo in Suit No. FHC/L/CS/86/94 dismissing the suit against the 1st Defendant. By its Particulars of Claim dated 26th January, 1994 which were repeated in paragraph 21(i – iii) of the Statement of Claim the Plaintiff claimed against the Defendants jointly and severally as follows:

a. The sum of N5,242,507.73 being money had and received by the Defendants from the Plaintiff without lawful justification, which the Defendants have failed, refused and/or neglected to pay despite repeated demands by the Plaintiff.

b. Interest on the said sum of N5,242,507.73 at the rate of 85% per annum from in June 1993 to 31st December, 1993 and at 21% per annum from 1st January, 1994 until the whole debt is liquidated.

c. Further reliefs.

The Plaintiff and the 1st Defendant filed and exchanged pleadings with the 15th Defendant amending its Statement of Defence. The 2nd Defendant did not file any Statement of Defence despite the fact that it was served with the Writ and Statement of Claim and did not participate in the proceedings. The Plaintiff called one witness who testified on its behalf while the 1st Defendant called two witnesses. Several exhibits were tendered. Judgment was entered in favour of the Plaintiff against the 2nd Defendant as per paragraph 21 of the Statement of Claim dated 18th May, 1994 but the claim against the 1st Defendant was dismissed. Aggrieved by this decision the Plaintiff filed his Notice of Appeal against the two Defendants dated 2/9/99 on 14/9/99 but later withdrew the appeal against the 2nd Defendant whose name was struck out of the appeal. An order was granted on 12/6/2003 to substitute Eagle Bank Limited for First African Trust Bank Limited because the name of 1st Defendant had been changed in the course of the proceedings.

Three grounds of appeal were filed along with the Notice of Appeal from which the Appellant formulated the following two issues for determination in paragraphs 3.1.1 & 3.1.2 of the Appellant’s brief as follows:

“3.1.1 Whether negligence is a relevant and material factor that will disentitle a claimant from recovering money paid under a mistake of fact in an action for money had and received.

3.1.2. Whether the Respondent is entitled to retain the sum of N3,5000,000.00 paid to it by the Appellant under a mistake of fact in the entire circumstances of the case.”

The Respondent also formulated two issues for determination.

The issues distilled by the learned Counsel for the Respondent which he contends represents the thrust of the facts upon which issues were joined in the court below are:

“3.1.1. Whether the Respondent could be held liable in an action for money had and received on an action involving overdraft facilities by the Appellant to a party other than the Respondent.

3.1.2. Whether the Respondent as collecting Banker could be held liable in an action for money had and received when the title in the funds had been credited to the account of a third party (sued as 2nd defendant).”

The Appellant based its claim for money had and received on the principles of equity contending that the Respondent cannot in good conscience hold onto money which had come into its possession by a mistake which the Appellant made when it wanted to return the cheque (Exhibit “A”) to the Respondent the presenting bank, but instead mistakenly sent the cheque to First Bank of Nigeria Plc. and submitted that the Respondent is not entitled to retain the sum of N3,500,000.00 paid to it by the Appellant under a mistake of fact as the corporate name of the Respondent at the material time started with “First” and Richbanc did not have enough funds in its account to cover the value of the cheque. He submitted that the Appellant has satisfied the conditions to entitle it to recover its money in a claim for money had and received under a mistake.