African Continental Bank Plc & Anor V. Victor Ndoma-egba(2000)
LawGlobal-Hub Lead Judgment Report
OPENE, J.C.A.
In
the High court of Cross River State holden at Calabar, the respondent as plaintiff brought an action against the appellants as defendants jointly and severally claiming the sum of N5,000,000.00 as special and general damages for breach of contract “for that defendants who are the plaintiff’s bankers have refused to furnish the plaintiff at his request and expense statements of account held as a customer of the defendants whereof the plaintiff has suffered damage in his profession.”
Pleadings were duly filed and exchanged and the matter went into a full trial at the end of which the learned trial Judge Binang, J. in a reserved judgment delivered on 30th July, 1997 entered judgment in favour of the plaintiff/respondent against the defendants jointly and severally in the sum of N3,300,000.00 (Three Million, Three Hundred Thousand Naira) being special and general damages for breach of contract.
Aggrieved and dissatisfied with this judgment the appellants have now appealed to this court.
Both the appellants and the respondent through their counsel filed and exchanged briefs of argument.
In the appellants’ brief of argument, 4 Issues were distilled from the eleven grounds of appeal filed by the appellants, they are:-
“(i) Whether the judgment against the second defendant in the circumstances of this case is sustainable.
(ii) Whether an award of special and general damages for breach of contract is sustainable when the plaintiff did not give any particulars of special damages claimed and when there are judicial dicta of both the Court of Appeal and Supreme Court that a claim for general damages for breach of contract is inappropriate.
(iii) Whether the plaintiff proved any loss to warrant an award of N3.3million in his favour as special and general damages for breach of contract.
(iv) Whether an award of N25,000.00 to the plaintiff as costs is warranted or defensible in the circumstances of this case.”
The respondent did not formulate any issue in his brief of argument but rather adopted the 4 issues identified in the appellants’ brief for determination of this appeal.
In respect of issue No.1, Chief Udechukwu SAN, the learned counsel for the appellants has argued that the action commenced by the respondent is an action by a current account customer against his bank, the 1st defendant claiming damages for loss allegedly accruing from a breach of contract in the form of alleged failure by the 1st defendant to supply statements of account to the plaintiff at his request and expense and that the proper parties to this action are the plaintiff and his banker, the 1st defendant and no other person. He argued that the 2nd defendant is not a banker and that there is no privity of contract of banker/customer between the 2nd defendant and the plaintiff and that the 2nd defendant is merely an agent and an employee of the 1st defendant branch at Calabar at the material time and as an agent of a known principal that the 2nd defendant cannot be and should not have been sued on the contract in question.
He referred to Niger Progress Ltd. v. North-East Line Corporation (1989) 3 NWLR (pt.I07) 68 at 84.
He also argued that the learned trial Judge’s finding that there is no way that this matter can be disposed of without reference being made to the second defendant is not a justification for making the 2nd defendant a party in the suit founded upon breach of contract and in relation to a transaction in which the defendant is merely an agent qua employee of a known principal. In support of this contention he cited the following cases:- Dommit Khonam v. Elizabeth Fife John (1939) 15 NLR 12 at 13; Niger Progress Ltd. v. N.E.L Corporation (supra).
He then urged the court to hold that the judgment against the 2nd defendant in this case is not sustainable.
The respondent who appears in person in his respondent’s brief argued that the 2nd defendant was at all times material to the action, the 1st defendant’s manager at her Calabar branch, where all the events took place, that the appellants have argued that the proper parties to the action are the plaintiff and the 1st defendant and that the 2nd defendant is merely an agent and that in light of the peculiar facts of this case that the argument will avail the appellants if, and only if, they concede that the suspected fraudulent and unauthorised dealings with the plaintiffs related accounts which dealings he also suspected in respect of the present account were within the 2nd defendant’s scope of authority as 1st defendant’s agent otherwise the 2nd defendant is personally liable and that the concession has not been made. He referred to Ashibuogwu v. The Attorney-General, Bendel State & Anor (1988) 1 NWLR (Pt.69) 138.
It is his contention that the case of Niger Progress Ltd. v. N.E.L Corporation (supra) is inapplicable as it dealt with the question of whether or not any agency existed in respect of the supply of vehicle and not the scope of an agent’s authority in an employer-employee situation as is the case here and that the 2nd defendant was properly joined.
The facts of this case are very straight forward and it is also not in dispute that the plaintiff/respondent at the material time was a current account customer of the 1st defendant/appellant bank while the 2nd defendant/appellant was the 1st defendant/appellant branch Manager at Calabar. This action arose as a result of a claim that the 1st defendant/appellant failed to supply statements of account to the plaintiff/respondent at his request and expense. The 1st defendant/appellant and 2nd defendant/appellant were sued jointly and severally.
It is also not in dispute that throughout the whole transaction that culminated in the filing of this suit that the respondent dealt with the 2nd appellant, its Calabar branch manager, in that capacity. The question is, can the 2nd appellant be sued with his employer for a breach of contract founded on the relationship between a current account customer and his Bank?
The learned trial Judge in his judgment at page 109 of the record of proceedings observed as follows:-
  “The 1st defendant is a non juristic person to act through a juristic person. The plaintiff had given evidence that he was dealing with the 2nd defendant all along who was at the time of this action, the branch manager at Calabar Branch Office of the 1st defendant. There is no way this matter can be disposed of without reference being made to the 2nd defendant. He is therefore a necessary party.”
It can easily be seen that there is no way that the finding cannot be faulted. The 2nd appellant was the 1st appellant’s branch manager at Calabar and in the course of this transaction, the respondent dealt with him all through and in dealing with this matter there is no way that it can be disposed of without reference being made to him but can this make him a necessary party to the action? With due respect to the learned trial Judge, the fact that there is no way that the matter can be disposed of without reference being made to him cannot of course make him a party. The action before the court is for a breach of contract resulting from the relationship of the bank and its customer and there is no privity of contract of banker/customer between the respondent and the 2nd appellant.
The 2nd appellant was just carrying out his duties as an employee of the 1st appellant and he is at best an agent of the 1st appellant, a known principal and it is settled that an agent of a known principal cannot be sued for a breach of contract as it has not been shown that he has acted not within the scope of his authority. See Carlen (Nig.) Ltd. v. University of Jos & Anor (1994) 1 SCNJ72; (1994) 1 NWLR (Pt.323) 631; Niger Progress Ltd. v. North East Line Corporation (supra).
The respondent has referred to the appellant’s argument that the proper parties to this action are the respondent and the 1st appellant and then submitted that in the light of the peculiar facts of this case that that argument will avail the appellants if, and only if, they concede that the suspected fraudulent and unauthorized dealings with the respondent’s related accounts which dealings he also suspected in respect of the present account were within the 2nd appellant’s scope of authority as the 1st appellant’s agent otherwise the 2nd appellant is personally liable and that this concession was however not made.
He then referred to Ashibuogwu v. A. G. Bendel State & Anor. (supra) at 154 where Kayode Eso JSC observed:-
“A principal, whether disclosed or otherwise is in a position to plead all defences available to him, but in the case of fraud, where the agent acts within the scope of his authority, actual or apparent, the act of fraud on the part of the agent binds the principal.”
I have considered the respondent’s submission and also the case cited above but I am quite at loss to see how they go to support the respondent’s case and I may say that it rather supports the appellants’ case.
The respondent’s claim is for a breach of contract and he is also alleging fraud and the case that he cited says that “in the case of fraud, where the agent acts within the scope of his authority, actual or apparent, the act of fraud on the part of the agent binds the principal.”
If the act of fraud on the part of the agent binds the principal, why do you then sue the principal and also the agent? I think that this submission does not at all support the respondent’s case in any way.
This issue is therefore resolved in the appellants’ favour as the judgment against the 2nd appellant is not sustainable. In respect of issue No.2 which questions whether the plaintiff was entitled to the damages of N3.3million awarded by the trial court. The learned senior counsel in the appellants’ brief stated that there are judicial dicta of the Court of Appeal and the Supreme Court that a claim for general damages for breach of contract is inappropriate.
He referred to Universal Insurance Company Ltd. v. T. A. Hammond (Nig.) Ltd. (1998) 9 NWLR (pt.565) 340 at 367; Mobil Oil (Nig.) Ltd. v. Abraham Akinfosile (1969) 1 NMLR 217; Ijebu Ode Local Government v. Adedeji Balogun & Co. Ltd. (1991) 1 NWLR (Pt.166) 136.
He submitted that in the latter case that the Supreme Court emphasised that it is improper and indeed misleading to dichotomise damages in cases of breach of contract into special and general damages and that in cases of breach of contract, assessment of damages is calculated on the loss sustained by the injured party which loss was either in contemplation of the contractors or is an unavoidable consequence of the breach.
He also submitted that the plaintiff/respondent in his statement of claim give no particulars in respect of special damages and that what he did in this case is to claim a lump sum of N5 million which he said is special and general damages for breach of contract without any effort made to show what relationship this figure has with the actual loss of his bargain or the market value of the benefit which he had been deprived of due to the alleged breach which merely consists of alleged refusal by the defendants/appellants to deliver to him statements of account at his request and expense.
It is also contended that the respondent did not prove any such special damages which is specially provided for by the terms of contract and that it is clearly wrong for the trial court to award the sum N3.3million as special and general damages for breach of contract.
The respondent in his submission stated that the appellants’ arguments are misconceived and that the present case is clearly one in which the damages awardable are at large and that the court may within reason make award of any sum as circumstances of the breach appear to warrant although there has been no actual proof of loss. He referred to the case of Balogun v. National Bank of Nigeria (1978) Vol. II N.C.C. 135 (1978) 3 SC 1 55 and stated that even though the case dealt specifically with a banker wrongfully dishonouring the cheque of a solicitor customer that the principles are applicable where the banker fails in his duties to a customer especially one in trade or in business as the respondent, a busy legal practitioner and that the duty breached is of a nature that makes quantification of the damage difficult. He submitted that the respondent did not in the circumstances of this case need to quantify his loss and that all that was necessary which was proved was that the loss flowed directly and naturally from the respondent’s failure to keep their own side of the bargain.
It is also submitted that although the distinction between special and general damages in cases of breach of contract is still being made and that it is improper and misleading to dichotomise damages in cases of breach of contract and that in cases of breach of contract that assessment of damages is calculated on loss sustained by the injured party which loss was in the contemplation of the contract or is an unavoidable consequence of the breach.
He referred to:- Ijebu Ode Local Government v. Balogun & Co. Ltd. (supra); Shell BP v. Jammat Engineering (Nig.) Ltd. (1974) 4 S.C. 33; UBN v. Nnoli (1990) 4 NWLR (Pt.l45) 530; Eliochin Nig. Ltd. v. Mbadiwe(1986) 1 NWLR (pt.14) 47; A.R.E.C. Ltd. v. Amaye (1986) 3 NWLR (Pt.31) 653. It was then submitted that the learned trial Judge was right and justified in awarding the respondent the sum of N3.3 million as damages. In this action, the respondent claimed the sum of five million naira being special and general damages for breach of contract for that the defendants who are the plaintiff’s bankers have refused to furnish the plaintiff at his request and expense statements of account held as customer of the defendants whereof the plaintiff has suffered damages in his profession.
The learned trial Judge in his judgment at p.112 of the records entered judgment for the respondent as follows:-
“Judgment is hereby entered for the plaintiff against the defendants jointly and severally in the sum of N3,300,000 (three million and three hundred thousand naira) being special and general damages for breach of contract.”
The first complaint raised by the appellants is that a claim for general damages for breach of contract is inappropriate.
It is settled that in award of damages for breach of contract that it is not proper to award general damages and that it is only special damages that are claimable and that the particulars and evidence in support of all awards are required. See Chief J. A. Ojomo v.lncar(Nig.) Ltd. (1993) 9 SCNJ 130; (1993) 7 NWLR (Pt.307) 534; Ijebu Ode Local Government v. Adedeji Balogun & Co. Ltd. (1991) 1 NWLR (Pt.166) 136; Mobil Oil (Nig.) Ltd. v. Abraham Akinfosile (1969) 1 NMLR 217; Universal Insurance Company Ltd. v. T. A. Hammond (Nig.) Ltd. (1998) 9 NWLR (Pt.565) 340 at 367.
In P. Z. and Co. Ltd. v. Ogedengbe (1972) 1 All NLR (1990 Edition) 202 cited by the learned senior counsel, Madarikan JSC very aptly and fully expounded  the law as follows:-
“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 inevitably arising 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. (See Koufos v. C. Czarnikow Ltd. (1967) 3 WLR 1491). Thus, the term “general” and “special” damages are normally inept in order 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 damages naturally resulting from the breach, no other form of general damages can be contemplated.”It can be seen that a claim for general damages should not be awarded in this case which is a claim for breach of contract and that the learned trial Judge was in a serious error to have awarded it and went further to award a lump sum of N3,300,000.00 as special and general damages. As it stands now, it can not be determined how much that is awarded as special damages and the amount awarded as general damages.
However, the matter did not stop there, a quick perusal at the plaintiff’s statement of claim shows that he did not give any particulars in respect of the special damages. It must be observed that damages in respect of a breach of contract is such as may fairly and reasonably be considered as either arising naturally in the usual cause of things from such a breach of contract itself or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as probable result of breach.
The respondent in his brief of argument has argued that in the circumstances of this case that the respondent need to quantify his loss and that all that is necessary and which was proved was that the loss flowed directly and naturally from the appellants failing to keep their own side of the bargain.
As I have already observed what the respondent did in the instant case is to claim a lump sum of N5 million as special and general damages without showing the relationship this figure has with the actual loss of his bargain or the market value of the benefit which he had been deprived of due to the alleged breach.
A claim in special damages must, to succeed, be proved strictly and the court is not entitled to make its own estimate on such an issue. The rule requires that anyone making a claim in special damages must prove strictly that he did suffer such special damages claimed. This means that the claimant is required to establish his entitlement to that type or class of damages by credible evidence of such character as would satisfy the court that he is indeed entitled to that award. See Nzeribe v. Dave Engineering Co. Ltd. (1994) 9 SCNJ 161 or (1994) 8 NWLR (pt.361) 124; U.B.N. Ltd. v. Odusote Book Stores Ltd. (1995) 9 NWLR (pt.421) 558.In the instant case, besides the fact that the respondent did not show the amount that he claims as special damages, he also did not show the particulars of his loss and adduce credible, satisfactory and convincing evidence to establish that he is entitled to his claim. Issue No.3 raises the question whether the plaintiff proved any loss to warrant an award of N3.3 million in his favour as special and general damages.
The respondent in his brief of argument raised so many questions which are whether the appellants owe him a duty to furnish him with information demanded to wit – statements of account and copies of all cheques and other instruments drawn on the account within the period specified and if such a duty did not ordinarily arise whether it would not arise in the circumstances of this case in which the respondent as a customer reasonably suspected fraudulent and unauthorised dealings in the account and also if that duty existed, how did the appellants perform it?
Further, if the appellant did not perform the duty whether it did not occasion any loss or damage to the respondent and if the respondent suffered any loss or damage, how is he to be compensated? The respondent’s case is that the appellants have a duty to furnish him with the statements of account and copies of all cheques and other instrument drawn on the account within the period specified. The respondent in paragraph 13 of his statement of claim at page 5 of the record averred as follows:-
“9. At the hearing, the plaintiff shall establish that the defendants are under a duty to furnish the plaintiff with periodic statement of account and copies of all cheques and other instruments drawn on the said account at the plaintiff’s request.”
At paragraph 15(iii) at page 7 of the record, he stated as follows:-
“15. At the trial, the plaintiff shall show:-
(i)…
(ii)…
(iii) That the defendants are in further breach of their statutory duty to the plaintiff in not furnishing him with quarterly statements of his account.”
The appellants in paragraph 9 of their amended statement of defence at pages 23 and 24 of the records averred:-
“9. Still in further reference to paragraph 12 of the statement of claim, the defendants say that all necessary Statement of Account up to the time of the commencement of this suit were duly delivered to the plaintiff. As to cheques, the bank has no obligation to return paid cheques to the plaintiff. In any event, the plaintiff did not indicate which particular cheques he was asking for, and the bank could not satisfy a blanket demand for paid cheques.
9a. The defendants further state that the demand in 1993 for cheques paid in 1991 was belated. The plaintiff using the statement of accounts ought to have specified the particulars of the cheques he was asking to be returned to him and ought to have made his demand within 15 days as specified on the statements of account.
(b). As to other instruments, the bank had no obligation to act on general and speculative demand when the plaintiff failed to particularise what instruments he was asking for.”
At the trial, the respondent did not lead any evidence to show that the appellants are in breach of their statutory duty to furnish him with quarterly statements of his account. In his evidence at page 55 of the record, he stated:”
The defendant ‘as my bankers is duty bound to give me my statements of account as many times as I ask for it but he is entitled to debit my account. This duty became even imperative when I have alleged some fraud.”
Under cross examination at page 65 of the record, he stated:-
“The defendants were under obligation to furnish me with copies of my instruments … banks have their tradition, this obligation was implied. I did not sign any contract with the defendants, for the supply of instruments.”
It can be seen from the foregoing that the respondent has failed to establish, that there is any statutory duty on the appellant to furnish him with quarterly statement of his account and as the respondent had rightly stated it is a tradition for the banks to supply their customers with their statements of account but this does not make it a statutory duty.
The respondent has failed to prove that there is a duty or a contractual obligation on the part of the appellants to furnish him at his request and expense his statements of account or copies of cheques and other instruments drawn on the said account. It therefore follows that in absence of such a contractual obligation that failure on the part of the appellants to furnish the respondent with his statement of account, copies of cheques and other instruments drawn on the respondent’s account cannot ground a cause of action for breach of contract for an award of an enormous sum of N3.3 million as special and general damages.
The respondent had referred to the case of Balogun v. National Bank of Nigeria (1978) Vol. ii NSCC 135; (1978) 3 SC 155 at 164 which dealt specifically with a banker wrongfully dishonouring the cheque of a solicitor customer and submitted that the principles applicable in that case is applicable where a bank fails in its duties to a customer like the instant case. If a banker wrongfully dishonours his customers cheques, this no doubt is actionable as the bank is duty bound to honour the customer’s cheque where there is sufficient fund and the customer is entitled to damages resulting from the bank’s breach of its duty to its customer. The present case is entirely different from the case under reference as there is no such duty owed by the bank to its customer. The decision in Balogun v. National Bank of Nigeria (supra) does not at all apply to the present case.
The learned trial Judge in his judgment at page III of the records observed:”
Considering the customer banker relationship, the 2nd (sic) could have been move (sic) because of this to give the plaintiff the information he asked for.
… The 2nd defendant knew that the plaintiff is a successful businessman who needs funds at all times. The 2nd defendant knew all these and saw that need to assist the plaintiff but deliberately, negligently and recklessly decided to treat the plaintiff as he did. The defendants have failed woefully to perform their obligation to the plaintiff … He is entitled to damages. He has proved his claim as required by law.”
The learned trial Judge had said it all that there was need to assist the respondent to give him the information that he asked for. It appears from the foregoing that the offence that 2nd appellant has committed is his failure to assist the respondent and because of this the respondent is entitled to damages.
It is pertinent to observe that ordinary failure to assist the respondent, that is, to furnish him with his statement of account or any document cannot create any legal obligation; if the learned trial Judge had addressed his mind to this, that what was involved is an assistance and not a legal obligation, obviously he would not have come to the conclusion that the respondent is entitled to damages and that he had proved his claim as required by the law and that he is entitled to the relief sought. The last issue relates to the award of N25,000.00 costs which the appellants complain that it is a windfall, totally unwarranted and unjustifiable.
In the case of Wurno v. U.A. C. Ltd. (1956) SC NLR 99 at 100 – 101 cited by the respondent, the Supreme Court observed:-
“The principle upon which this court acts on appeal against costs is, that it does not interfere where the costs are in the discretion of the trial Judge, as was the case here, unless satisfied that he did not exercise his discretion, or did not do so judicially.”
It is also trite that an award of costs should not be punitive, arbitrary and unreasonable but where a trial court decides to award cost which is on a high side as in the instant case or a punitive cost, the court must state the reason for doing so.
I agree with the respondent that there is no statutory or regulatory tariffs available to our courts to guide them in assessment of costs as in the Supreme Court, but all the same, the award of costs should be reasonable and the trial court should exercise its discretion judicially and judiciously.
The respondent had submitted that there had been a series of adjournments at the instances of the appellants but there is nothing on the printed records to show that it is the reason why the costs were assessed at the enormous sum of N25,000.00. There is also no evidence on the record that the respondent had incurred a substantial out-of-pocket expenses because this is one of the determining factors in the award of costs. In the instant case an award of the sum of N5,000.00 would have been reasonable. I am therefore of the view that an award of N25,000.00 is very unreasonable and arbitrary. I hereby set aside this award.
In the final result, I am of the view that there is merit in the appeal and it is accordingly allowed by me. I hereby set aside the judgment of the High Court of Cross River State holden at Calabar delivered on 30/7/97 by Binang J. and dismiss the plaintiff/respondent’s action.
The appellants are entitled to costs which I assess and fix at the sum of N5,000.00.
Other Citations: (2000)LCN/0787(CA)