Emmanuel Agbanelo Vs Union Bank Of Nigeria Ltd. (2000) LLJR-SC

Emmanuel Agbanelo Vs Union Bank Of Nigeria Ltd. (2000)

LAWGLOBAL HUB Lead Judgment Report


This is an appeal from the decision of the Court of Appeal (Akintan, Nsofor and Ige, JJCA) dismissing the appellant’s appeal from a decision of the High Court of what was then known as Bendel State. The appellant Mr. Emmanuel Agbanelo, is referred to as “plaintiff” in this judgment. The respondent, Union Bank of Nigeria Limited, is also referred to as “the defendant” in this judgment.

In the High Court of Bendel State (as it then was) holden at Warri (now in the Delta State), the plaintiff sued the defendant claiming as contained in the Further amended Statement of claim which superceded his writ of summons “general and special damages for (the) dishonored cheque” and damages for libel. The plaintiff in paragraph 32 of the Further Amended Statement of Claim itemized the losses he suffered as loss of profit and loss of trade as distributor. However, these are not by themselves causes of action. Having regard to paragraph 29 of the Statement of Claim in which negligence was averred and paragraphs 16 and 17 in which libel was averted, it would appear that the two causes of action in respect of which damages were claimed were defamation and negligence, Inelegantly drafted as the further amended statement of claim was, the High Court and the Court below both proceeded on the footing that the plaintiff’s claims were for damages for negligence and libel.

The facts which gave rise to the plaintiff’s action were not much in dispute, The plaintiff, a businessman who was appointed a sole distributor of a biscuit manufacturing company was a customer of the defendant who were at all material times bankers carrying on business of banking throughout the Federal Republic of Nigeria. At all material times the defendant had one of its branches in Warri at No. 8 Warri/Sapele Road, Warri where the plaintiff operated a current account in the name and style of EPACO (Nigeria) Marketing Company. At the request of the plaintiff, the defendant sometime in April, 1986, issued a bank draft in favour of the manufacturers payable at the defendant’s branch in Surulere. Upon presentation of the draft by the manufacturers for payment it was returned unpaid, endorsed “1st signature irregular”, Claiming that these words endorsed on the draft were defamatory of him and that the draft was negligently issued, the plaintiff claimed damages. Bazunu J. Who heard the suit at the High Court, after merely rehearsing the evidence in the case and arguments of counsel came to the conclusions: In regard to the claim for libel, that from the evidence the claim for libel had not been proved; and, in regard to the claim for negligence, that the plaintiff’s case against the defendant for negligence had not been proved. Beyond stating that on the evidence the claim for libel has not been proved, the Learned judge did not proffer any detailed reasons in law why the claim for libel should be dismissed. However, in regard to the claim for negligence his reasons for dismissing the action put in a nutshell, were that the defendant was “the Union Bank Nigeria Limited (Warri Branch)” and not “the Union Bank Nigeria Limited (Surulere Branch) nor the Union Bank Nigeria Limited.” The Learned judge reasoned thus:

‘Thus for the plaintiff to succeed, he must prove that the defendant as stated in the claim was negligent. In other words that the act complained of was perpetrated by the Union Bank Nigeria Ltd., Warri Branch and that that act amounted to negligence on its part” Having so reasoned he reverted to his earlier finding that:

“There is no evidence that the defendant, that is Union Bank Nigeria Limited. Warri branch was negligent:” and dismissed the claim.

The plaintiff’s appellant to the Court of Appeal was dismissed on the grounds first, that the trial judge was right in the conclusion that libel had not been proved and secondly, that in regard to the claim for negligence since there was no evidence that the Warri Branch of the bank had been negligent the trial judge rightly dismissed the action .

Nsofor. JCA, who delivered the Leading judgment of the Court of Appeal went further to consider, whether the action was properly constituted. He was of the view that because Union Bank of Nigeria Limited (Warri Branch) was put as the name of the defendant, Union Bank of Nigeria Limited was not sued, and the defendant sued was not a legal person. He held that the suit was not properly constituted. Nevertheless, he dismissed the suit. Akintan and Ige JJCA concurred. On this further appeal four questions have arisen for determination, albeit with varying degrees of decisive importance, namely:

(i) whether the words were in the circumstances of the case defamatory;

(ii) whether the High Court and the court below were right in treating branches of the Union Bank Nigeria Limited as separate entities and in regarding the Warri branch of the bank, rather than the bank itself, as the defendant in the case:

(iii) whether the Court below was right in determining whether the action was properly constituted when no such issue arose either at the trial or on the appeal and

(iv) whether the dismissal by the High Court of the claim for negligence was rightly held by the court below. As earlier stated, the trial judge merely rehearsed the evidence in the case and concluded that the claim for libel was not established. The court below did a little better by setting out some principles of law relating to libel but, at the end of the day without expressly stating how they have applied the principles to the facts of the case merely concluded that the trial judge’s conclusion was correct.

Learned Counsel for the plaintiff criticized the judgment of both courts on the ground that they failed to demonstrate adequate consideration of the evidence or of the submission of counsel before the claim for libel was rejected. What amounts to adequate consideration of the evidence in a case should depend on the nature of the issues raised. Where the facts are largely not in dispute cannot be regarded as essential part of a judgment to do more than take note of the evidence given. It is where there is conflict in the evidence on material issues of fact that the judge is expected to review and evaluate the evidence before making a finding. Where there are issues of law or if mixed fact and law it is desirable that the judge should take note of those issues and make pronouncements on them. His failure to do so may in some cases be indicative of failure of the adjudicatory process.

In this case, the trial judge had said in regard to the claim for libel:

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“Without any hesitation whatsoever I have no difficulty in coming to the conclusion from the evidence before me that the claim for libel has not been proved.”

The Court of Appeal confirmed that opinion. It is clear that the judgment of the trial judge was deficient in regard to the claim for libel. That claim did not depend merely on the oral evidence but on inferences to be drawn from the established facts and the law. The judge did not express any opinion on the questions whether the words complained of were capable of defamatory imputation and. if they were, whether they were in fact defamatory of the plaintiff. The former is a question of law, the latter, one of fact. Although the Court of Appeal (per Nsofor, JCA) discussed extensively, principles of law applicable in matters such as this at the end of the day they did not show what bearing those principles had on the case.

A tribunal charged with the performance of judicial functions should normally state reasons for its conclusions. This becomes more important where appeals lie from its decisions. Even without the likelihood of appeal, it makes for open and even-handed justice for reasons to be given. To decide without reasons leaves room for arbitrariness and leaves the parties in the dark as to how the decision of the tribunal is arrived at. In the con of the present case, merely to say that “from the evidence … the claim for libel has not been proved,” in a case which is not solely on primary facts is grossly inadequate as reason for the conclusion.

However the judgment would not be set aside merely for failure of the trial court to state reasons where the primary facts are not in dispute and the appellate court is in a good position as the trial court to draw inferences from the established facts and apply the law. In such case, the appellate court is in a position to determine whether the decision of the trial court is valid or not. There was no question in this case of resolving conflict of evidence as far as the issue of liability for libel was concerned. The case turned on the question whether the words “1st signature irregular” endorsed on the draft carried a defamatory imputation in the circumstances in which it was made and published. Those circumstances were not in dispute. What was left for the judge was to draw inferences from the established facts. The real question addressed by counsel on this appeal, is whether having regard to the con in which the statement was made and published, defamatory imputation should have been found. Learned counsel for the plaintiff argued trenchantly, both in the appellant’s brief and in the course of oral argument. That although the words complained of may not bear any libelous meaning, the way and manner in which they were written coupled with the conduct and subsequent acts of the defendant were facts from which imputation of libel could be made. It was argued that since the defendant was a single entity, the effect of a branch of the defendant writing on the draft that the 1st signature was irregular was similar to a situation where a person after he has signed on his cheque disowns his signature. It was further argued that from the totality of the defendant’s acts, the inference to be drawn was that the draft did not emanate from its branch in Warri and that it was forged by the plaintiff and therefore dishonoured. Learned counsel for the defendant argued that from the facts no inference of forgery could be made. It is an established principle of the law of defamation that the first step in the determination of the question whether a statement is defamatory or not is to consider what meaning the words would convey to the ordinary person. See Okolo v. Midwest Newspaper Corporation (supra). Having ascertained that, the next step is to consider the circumstances in which the words were published, and determine whether in those circumstances the reasonable person would be likely to understand them in a defamatory sense, where the word used, taken in isolation in their literal meaning are not defamatory. It is still open to the plaintiff to allege that inference of defamatory imputation should be made from the circumstances. The relevant principles have been sufficiently stated in cases such as Okafor v. Midwest Newspaper Corporation and Ors. (1977) NSCC 11. and Okafor v. Ikeanyi ( 1979) Vol. 12 NSCC 43 to mention but few. They need no restatement. The plaintiff’s case at the trial was that in the con in which the words were published they were understood in their ordinary meaning to mean:

“(1) the Bank draft did not emanate (sic) from the defendant,

(2) Plaintiff forged the bank draft and the signature on it,

(3) Plaintiff is a man of dubious character,

(4) Plaintiff is a thief and wanted to steal bank’s money,

(5) Plaintiff wanted to dupe the manufacturers by giving them a false bank draft,”

It is evident that all these imputations could only be the invention of an imagination that has been given free rein in an effort to found a cause of action. When it is alleged that defamatory meaning should be inferred beyond the literal meaning of words, there is no room for fanciful imagination. If the draft had not emanated from the defendant or had been forged or had been presented with intent to steal the bank’s money or was a false bank draft, the defendant rather than merely returning the draft would have set criminal investigation in motion, at least by referring the matter to the police. A reasonable person would consider it improbable that a draft on which one of the signatures not declared irregular was of the bank’s accountant, would have been regarded as false or forged, without the bank charging the co-signing accountant with complicity. When a tribunal is urged to draw inference from facts, such inference must be such as a reasonable person would draw having regard to the totality of the circumstances, including the ordinary course of conduct, both personal and corporate. In this case, the inference which the plaintiff invited the court to draw was both far-fetched and fanciful. The trial judge and the court below were both right in concluding that from the totality of the evidence. libel was not proved.

I now turn to the question of negligence. The plaintiffs’ case at the trial was that the defendant was negligent because:

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(a) the defendant’s servant signed irregular signature on the draft, and

(b) the defendant returned the draft unpaid when it could have investigated the genuineness.

It is not quite clear from the pleadings whether the plaintiff’s case was one of breach of contract occasioned by negligence in the performance of a contract or one purely of negligence as a tort. Whichever it was, the trial judge proceeded on a totally erroneous rooting that the defendant in this case was not the Union Bank of Nigeria Ltd. but its Warri Branch. He found that Union Bank (Warri Branch) was not negligent because it complied with the “usual practice” of the Bank that “where the substantive manager was not available the Relief Manager, the accountant, and two officers sign the reverse side of a draft ….” He held that “there was no suggestion that the signature of the Relief Manager was forged nor that he ought not to have signed exhibit E in the circumstance.” It may well be added that he summarized the plaintiff’s case thus:

“The grouse of the plaintiff as revealed by the evidence is against the Union Bank Surulere branch for failing to act in accordance with banking practice or Central Bank directives as averred in paragraph 13of the further amended statement of claim by endorsing Exhibit E “1st signature irregular.”

In the result, he held that since the allegation of negligence was against Surulere branch, whereas Warri branch was sued, liability against Warri branch had not been established. The Court of Appeal endorsed this view. Nsofor JCA, who delivered the Leading judgment, went out of his way to embark on an extensive discourse of what juridical personality consists of. On an assumption that the defendant in the case was “Union Bank of Nigeria Limited (Warri Branch)” he held that “Union Bank of Nigeria Limited (Warri Branch)” was not a legal person and could not be sued. There is no need to follow their Lordships of the Court of Appeal into error by considering question of the constitution of the suit. The issues of constitution of the suit and of legal personality did not arise either at the trial or on the appeal before them, in paragraph 2 of the Amended Statement of Claim the plaintiff averred:

“The defendant is a company incorporated under the Companies Decree of 1968 and carries on business of banking throughout the Federal Republic of Nigeria and has one of its branches in Warri … Within the jurisdiction of this honourable court.” (emphasis mine) This was admitted in paragraph 2 of the Statement of Defence. It is trite law that what is admitted need not be proved and that parties are bound by their pleading.

It was thus common ground that the defendant was Union Bank of Nigeria Ltd. and that it is an incorporated company. “Warri Branch” was put, apparently, for the purpose of showing that the defendant was carrying on business within the jurisdiction of the court. Both the trial judge and their Lordships of the Court of Appeal were in error in the view they held that Union Bank of Nigeria Ltd. was not the defendant. The acts of negligence alleged was against the defendant as an entity and not against its branches which are merely outlets for transacting business. Where an allegation of negligent act is made against a corporate body, such as the defendant, doing business through several branches, it is inconsequential to the question of liability whether the acts were done through one of the branches or another, what is material is whether the negligent act alleged against the corporate body has been proved. There is no doubt that the act of a branch is the act of the company, just as the act of an employee of the company done in the course of his employment makes the company vicariously liable regardless of the branch from which he operates.

Regarding a branch as a separate entity from the corporate body is a fundamental flaw in the reasoning of the trial judge and of the Court of Appeal. However, the trial judge went further to hold that there was no negligence in the steps taken by the defendant in its Warri Branch. The negligent act alleged, as was stated in paragraph 29 of the Further Amended Statement Claim, was that the defendant issued a draft with an irregular signature or that it dishonoured its own draft without taking proper steps to have its authenticity confirmed. It was either (i) that the defendant by the act of its officers in Warri branch was negligent in the issue of the draft or (ii) it was negligent by the act of its officers in Surulere branch by dishonouring it. By the evidence of its only witness, the defendant elected that there was no negligence in the issue of the cheque. The witness acknowledged that. “We (that is in the defendants’ Warri branch) were embarrassed when the draft was returned for the reason for which it was returned.” Then, he went on to say under cross examination: “The paying bank has a discretion to confirm from us (i.e. in the defendants’ Warri branch) whether or not the draft was issued by us. The signature of the sub-manager was not regularly signed.”

In the face of this evidence, act of negligence was clearly established. It is evident that the defendant found itself hoisted on the horns of a dilemma. If it is admitted that there was some irregularity in the issue of the draft, it would have committed a breach of duty to the plaintiff. If it denied that there was an irregularity in the issue of the draft, failure to pay it was a breach of duty owed to the plaintiff. Either way, it could not deny that an act of negligence had been committed. The defendant’s duty to exercise reasonable care and skill in regard to its customer’s affairs is undoubted. The law is stated thus:

“A bank has a duty under its contract with its customer to exercise reasonable care and skill in carrying out its part with regard to operations within its contracts with its customers. The duty to exercise reasonable care and skill extends over the whole range of banking business within the contract with the customer. Thus the duty applies to interpreting, ascertaining and acting in accordance with the instructions of the customer.”

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(See Cresswell et al: Encyclopedia of Banking Law C. 21), Selangor United Rubber Estates Ltd. v. Cradock (No.3) (1968) 2 All ER 1073).

In this case, the plaintiff was a customer of the defendant. In the ordinary course of business he requests for bank drafts with cheques drawn on the current account which he operated with the defendant. The transaction which led to this action was one such request. It is evident from these facts, not seriously disputed, that the defendant owed a duty to the plaintiff to carry out his instructions to issue a draft which would be honoured, and to honour a draft properly issued by the defendant at his request. By its nature, a banker’s draft is a draft drawn by a bank upon itself. It contains an undertaking to pay the amount of the draft. Quite apart from the banker-customer relationship, a bank has a duty to a person on whose request it has agreed to issue a draft to issue and honour such draft in the discharge of that duty it must show care to ensure that the banker’s draft is properly issued and honoured. From the facts which have been narrated, it is clear that the defendant was in breach of the duty of reasonable care and skill it owed to the plaintiff. It is surprising that the defendant which was itself embarrassed by its own default, nevertheless, continued to deny that it had failed to show sufficient care and skill as would reasonably be expected of it. The trial court should have so found. The court below was in error in affirming the decision of the trial court. What, then, is the consequence that should follow from the finding, now made, of absence of sufficient care and skill There is considerable confusion in this aspect of the case. The plaintiff in paragraph 29 of the Further Amended Statement of Claim averred acts of negligence whereby the defendant “breached defendant (sic) contractual duty to the plaintiff as a customer of the bank.” The trial judge (at page 62 of the record) was of the view that:

‘The case of the plaintiff was that the defendant (Union Bank, Warri Branch) was negligent because the Union Bank, Surulere branch returned the draft unpaid with the endorsement “1st Signature irregular.” (Emphasis mine).

The Court of Appeal (per Nsofor, JCA) (at page 111 of the record), for their part, stated that:

“The heart and soul of the issue now being argued, is the alleged negligence of the respondent in the making of the bank draft. (Exhibit E)” (Emphasis mine).

In his appellant’s brief in the court below, the Learned counsel for the plaintiff referred to the claim as a “claim for breach of contract arising for (sic: from) the negligence of the defendant.” (See paragraph 39 of the record).

There was some degree of vacillation on the plaintiffs part. The plaintiff would seem to have vacillated between a claim based on breach of contract occasioned by a negligent performance of the contract and a claim in negligence as a tort. The trial court and the Court of Appeal were themselves unable to agree as to what formed the basis of the claim. Before a court can commence a meaningful assessment of damages, it must be sure of the nature of the claim, that is to say, whether the claim is in contract or in tort, and, if in tort, the nature of the wrong alleged. I adopt the definition of the term “damages” contained in the McGregor on Damages (16th Edition 1997) as follows (in paragraph 1):

“Damages are pecuniary compensation obtainable by success in an action for a wrong which is either a tort or a breach of contract, the compensation being in the form of a lump sum awarded at the time, unconditionally and generally …”

In an action for breach of contract, the measure of damages is the loss flowing naturally from the breach and is incurred in direct consequence of the violation. (See Swiss-Nigeria Wood Industries Ltd. v. Bogo (1970) 6 NSC 235). The principles guiding the award of damages in tort are different from those guiding the award of damages in contract. (See James v. Mid-Motors Nigeria Co. Ltd. (1978) 11 and 12 SC 31, (1978) 11 NSCC 536). The object of tort damages is to put the plaintiff in the position he would have been in if the tort had not been committed, whereas, the object of contract damages is to put the plaintiff in the position he would have been in if the contact had been satisfactorily performed. Even if it had been clear that the claim is in the tort of negligence, there may be need for a further inquiry, whether the tortious conduct found has occasioned only economic loss and, if so, if it is within the variety of tortious conduct for which the court will award compensation for economic loss. The upshot of what has been said is that, despite an initial inclination to remit this aspect of the case to the High Court for assessment of damages, it is better to remit the issue of compensation arising from the negligent conduct found to the High Court for it to deal with the question of damages after ascertaining the nature of the claim.

In the result, for the reasons which I have given I would dismiss the appeal in regard to the claim for libel. I would allow it in regard to the rest of the plaintiff’s claim and set aside the judgment of the High Court dismissing that aspect of his claim and that of the Court of Appeal confirming it. I order, upon the finding, now made, that the defendant acted without due care, that this case be remitted to the High Court for the issues (i) whether the damages claimed by the plaintiff is recoverable and (ii) if it is, the quantum of such damages, to be determined after ascertaining the exact nature of the plaintiffs claim. Each party should bear his (or its) costs of the appeal.


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