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Home » Nigerian Cases » Court of Appeal » Union Bank of Nigeria Plc V. Chief J. D. Okubama (2000) LLJR-CA

Union Bank of Nigeria Plc V. Chief J. D. Okubama (2000) LLJR-CA

Union Bank of Nigeria Plc V. Chief J. D. Okubama (2000)

LawGlobal-Hub Lead Judgment Report

IBIYEYE, J. C. A.

Th

is is an appeal against the judgment of Onafite Kuejubola, J. of the Delta State High Court of Justice sitting in Warri on the 25th day of September, 1998. The plaintiff who is the respondent in this appeal claimed in paragraph 26 of his further amended statement of claim against the defendant as appellant as follows:-

Whereas the plaintiff claims against the defendant the sum of N9.664,250 (Nine million, six hundred and sixty four thousand two hundred and fifty naira) as special and general damages being the loss suffered by the plaintiff.

PARTICULARS OF NEGLIGENCE

Based on cheques issued by the plaintiff to the Nigerian Ports Authority to be drawn on the defendant, the defendant refused, failed and/or negligently refused to pay same despite the sufficiency of funds at the material time.

PARTICULARS OF SPECIAL DAMAGES

Amount of refund plaintiff is entitled to from Nigeria Ports Authority is $12, 779.33 (Twelve thousand, seven hundred and seventy nine dollars and thirty nine cents) …. At N82.00 per $1.00 …. N1,047,905.00 demurrage incurred as a result of N.P.A. refusal to allow plaintiff’s vessels sail is 19,152.08 German Marks at N55.5029 = 1,062,996.00

GENERAL DAMAGES

  1. Damages suffered by plaintiff as a result of defendant’s failure to honour the withdrawal of $200.00 from plaintiff’s domiciliary account when there was sufficient fund… N3,000,000.00

4a Damages suffered by the plaintiff when the defendant failed to honour plaintiff’s cheque when there was sufficient fund in the current account….

= 4,000,000.00

4b Damages suffered by the plaintiff for shock, inconvenience, frustration and loss of reputation…

= 553,349.00

Grand Total              = “9,664,250.00

Pleadings were ordered and, by the leave of court, amended and exchanged several times over by both parties with the eventual titles of further, further amended statement of claim and further amended statement of defence.

The case proceeded to hearing whereby the plaintiff testified and called a witness and the same witness who is a staff of the defendant also testified for the defendant.

The salient aspects of the plaintiff’s testimony are that he had sufficient funds in his current account with the defendant’s bank and that the failure of the defendant to honour his two cheques numbers 287763 and 287764 for N4,848.87 and N2,383.69 respectively drawn in favour of the Nigerian Ports Authority (herein after referred to as NPA) in settlement of harbour dues made him to incur demurrage to the tune of 18,152.08 German marks and to lose a refund of $12,779.33 from N. P. A. as well as loss of reputation.

Consequently upon the alleged recalcitrant attitude of the defendant, the plaintiff sought the reliefs set out in paragraph 26 of the further amended statement of claim (supra)

The defendant, on its part, testified, albeit, succinctly that as at the time the plaintiff issued those two cheques, he had over stretched the approved overdraft facility of N40,000.00 to the tune of N53,413.49. In view of the negative development in the plaintiff’s current account, the defendant asserted that it no longer had any legal obligation to honour any cheque drawn on that same current account. It added that all that was left in its relationship with the plaintiff was purely discretionary. Learned counsel for both parties at the close of case thereafter extensively addressed the trial court. On the 25th of September, 1998, the learned trial Judge delivered a considered judgment partly in favour of the plaintiff by allowing the reliefs claimed in sub-paragraphs (2), 4(a) and 4(b) of paragraph 26 (above). The sum total of the reliefs sought in the said sub-paragraphs added up to N5,547,905.00 (Five million five hundred and forty seven thousand, nine hundred and five naira).

The learned trial Judge apparently made an unsolicited order that the said judgment sum be paid to the plaintiff by the defendant within fourteen (14) days from the date of judgment.

The defendant was aggrieved by this decision and appealed to this court on nine grounds. The defendant now appellant thereafter sought and got leave of this court to file and argue four additional grounds of appeal. The original and additional grounds of appeal are eventually thirteen in number.

The appellant distilled the following five issues from the eventual thirteen additional grounds of appeal.

“1. Whether the trial court made proper evaluation of the evidence before it and made proper inferences therein having regard to the evidence and state of pleadings before it?.

  1. Whether the payment of subsequent cheques after the two dishonoured cheques can amount to a breach of contract of the dishonoured cheques?.
  2. Whether the damages awarded by the trial court was (sic) unwarranted, excessive and unjustifiable warranting the interferences by the appellate court?.
  3. Whether the trial court had jurisdiction to entertain the suit having regard to the reliefs sought by the Respondents?
  4. Whether the award of N1,047,905.00 for negligence for the two cheques dishonoured have been proved?”.

The Respondent, on his part, formulated only two issues from the thirteen grounds of appeal. The two issues are as follows:

“1. Whether having regards (sic) to the issues properly joined by the parties in their pleadings vis-a-vis the totality of admissible and credible evidence led in support thereof, the trial court was right in coming to the conclusion in effect, that the dishonour of the two cheques was wrongful and thus occasioned loss and damages?.

  1. Whether the damages awarded are excessive to warrant intervention of the appellate court?”.

I shall cursorily remark that the two issues formulated by the respondent do not adequately encompass the thirteen grounds of appeals. I am mindful of the trite position at law that the scantiness of the issues formulated by the respondent will not attract any sanction as he can even afford not to formulate any issues. In the event of the respondent failing to formulate issues from the grounds of appeal when there is no cross-appeal, the court is entitled to hold that the respondent has, by implication, adopted the issues formulated by the appellant. See Weide & Co. (Nig) Ltd v. Weide & Co. Hamburg (1992) 6 NWLR (Pt. 248) 627 at 637.  It is equally settled that where a respondent decides to formulate issues, it must do so with reference to all the grounds of appeal filed. See J.N. Eze v. Federal Republic of Nigeria (1987) 1 NWLR. (Pt. 51) 506 at pages 521 and 522. In view of the sparsely and/or inadequately formulated issues by the respondent from the extensive grounds of appeal, I shall prefer the issues formulated by the appellant which are comprehensive enough.

At the hearing of this appeal on 19th January, 2000, Chief E. L. Akpofure S.A.N. and B. A. Jessa Esq., the learned counsel for the appellant and respondent respectively adopted the parties’ briefs and amplified on them. It should be pointed out that the learned Senior Advocate for the appellant did not only adopt an amended brief of argument but he also adopted the appellant’s reply brief of argument.

On issue No.1, the learned Senior Advocate for the appellant took up the issue of banking facility granted to the respondent by the appellant on whether or not it was at a ceiling of N60,000.00 or N40,000.00?. He argued that evidence abound on behalf of the appellant that the facility granted to the respondent was pegged at N40,000.00.He referred to Exhibits F and U dated 3/2/87 (not 3/2/97- as claimed by him) being letters which are to the effect that the facility was pegged at N40,000.00. He went on to add that the respondent under cross-examination admitted on seeing Exhibit F which is a copy of exhibit U that the facility he enjoyed in the defendants bank had been pegged at N40,000.00 as at 3/2/87. Learned Senior Advocate of Nigeria further strengthened the fact that the sum of N40,000.00 was the ceiling of the facility made available to the respondent by the appellant, when Buraimoh Martins, the appellant’s witness (D.W.1) who was also the witness of the respondent, identified Exhibit U as a copy of the letter written to the respondent by the appellant which the former signed in acknowledgement. He argued that these items of appellant’s evidence were not controverted by the respondent. He therefore submitted that in the face of the unchallenged appellant’s evidence on the issue of the quantum of facility availed the respondent by the appellant, the trial court was in error in holding that the pegging of the sum of N40,000.00 was inconclusive.

Learned Senior Advocate further argued that, the conclusion of the trial court that the amount of facility at the disposal of the respondent was N60,000.00 and not N40,000.00was not borne out by the evidence of the respondent. He went on to buttress his argument that, it is trite to say that where documentary pieces of evidence are tendered and they support the oral testimony the court should place reliance on the aspect or aspects in the documentary evidence which support the oral evidence. He relied on the case of Kimdey v Governor of Gongola State(1988) 2 NWLR (pt.77) 445, (1988) 5 SCNJ 28. He urged the court to hold that Exhibits F and U support the oral evidence of the D.W.1. He further argued that the oral evidence of the respondent relating to N40,000.00 could not have varied or modified the contents of exhibits F and U and that the sum of N60,000.00 alluded to by the learned trial Judge was not part of the evidence of the respondent. He went on to submit that unchallenged evidence should be deemed admitted and in the absence of anything to the contrary, the trial court ought to believe it. He relied on the case of Otuedon v. Olughor (1997) 9 NWLR (Pt. 521) 355 at 376 paragraphs C-D: Akhinobare v Omoregie (1976) 12 S. C. 11 at 18 and Obembe v. Wema Bod (1977) 5 S. C. 115.

See also  Savannah Bank of Nigeria Plc V. Oladipo Opanubi (1999) LLJR-CA

On the issue of the two dishonoured cheques, the learned Senior Advocate submitted that the learned trial Judge improperly evaluated the evidence before her. Thus, the evidence before the learned trial Judge was to the effect that the respondent’s current account in the appellant’s bank had no funds to back the demand on each of the two cheques. He therefore submitted that the appellant was justified in dishonouring the two cheques issued in favour of N.P.A. and that in the previling circumstances the appellant was not in any way negligent in its obligation towards the respondent. The fact of the indebtedness of the respondent beyond the approved N40,000.00 loan facility was exemplified by reference to page 35 lines 20-23 of the printed record that the respondent under cross examination admitted the contents of exhibits L and G ( that is to say the respondent’s statement of account) that his account was in debit. The learned Senior Advocate conceded the fact of the existence of a legal mortgage on the Respondent’s property dated 6/9/77 to cover N60,000.00 but argued that that mortgage was a security for the overdraft which was subsequently pegged at N40, 000.00 on 3/2/87 as per exhibits F and U. He further argued that it has nothing to do with the issuance of the two cheques. He added that the position and meaning of overdraft in law are that where a customer who is enjoying a facility limited to a certain amount, as in the instant case where the overdraft facility was pegged at N40,000.00 on 3/2/87, has exceeded its limit, issues a cheque, he is indeed asking for a loan which is at the discretion of the bank which reserves the right to honour or dishonour the said cheque. He relied on the case of Adereti & Anor. v. Attorney-General, Western Nigeria (1965) 1 All NLR. 254 at 257. He submitted that it is manifest from available evidence that the respondent predicated the two cheques on insufficient fund and that if they were honoured that act would crystallise into a contract. The appellant behaved regularly in dishonouring the two cheques in the absence of sufficient fund in the respondent’s account. He cited the case of Highgrade v. First Bank Nigeria Limited (1991) 1 S.C.N.J. 100 at 122, (1991) 1 NWLR (pt.167) 290.

On the award of naira equivalent of 12,779.23 for which the sum of N1,047,905. 50 was awarded by the trial court based on N82.00 to N1.00 as reflected at paragraph 26 of the further, further amended statement of claim dated 20th of June 1996, the learned Senior Advocate argued that the averment did not stipulate the period the said rate of dollar as applicable to the naira nor did the respondent give any evidence on the period. He (the respondent) instead said that he did not know the value of the naira to the dollar when the cause of action arose in 1987. He therefore submitted that there was no evidence before the learned trial Judge of the rate of exchange either at the time the cause of action arose, at the time the plaintiff gave evidence or at the time judgment was delivered. He argued that since this head of claim is under special damages for negligence, it must be strictly proved and he cited the cases of Ijebu Ode Local Government v. Adedeji Balogun & Co. Ltd. (1991) 1 NWLR (Pt.166) 136 and Inland Container (Nig.) Ltd. v. R.C.T. Company Ltd. (1997) 8NWLR. (pt. 517) 505.

He therefore submitted that there is no proof or scintilla of evidence to justify such award of special damages at a prevailing rate. It is also not, that is the rate of exchange, one of those things any court can judicially notice under section 74 of the Evidence Act, Cap. 112, Laws of the Federation of Nigeria, 1990. It is hardly the province of the Court to go on a voyage of discovery in the absence of tested and proven evidence before it. He cited the case of Green v. Green (1987) 3 NWLR (pt.61) 480, (1988) 7 SCNJ 255 at 296.

Learned Senior Advocate furthered his argument by saying that the learned trial Judge erred when she held that subsequent honouring of cheques after dishonouring the two cheques in issue showed that there is a special agreement between the appellant and respondent for the latter to draw upon his account and that failure on the part of the former to honour the first two cheques amounted to a breach of contract. He contended that this conclusion is not borne out by evidence apart from pegging the overdraft facility at N40,000.00 as per exhibits F and U. He finally submitted that from the available pieces of evidence, no proper evaluation was made and where it was made, wrong inferences were drawn. He urged the court to resolve this issue in the negative.

In reply to issue No.1, B. A. Jessa, Esq., The learned counsel for the respondent, contended that the respondent led oral evidence and tendered documents establishing that the initial facility was N60,000.00 as per Exhibit Z 6. In an attempt to fault the dishonouring of the two cheques, the learned counsel for the respondent referred to page 32 lines 27 to 29 of the record that the respondent testified that after the two cheques were dishonoured, he complained to an unnamed appellant’s Branch Manager who apologised on behalf of the appellant. He submitted that this piece of evidence which stands uncontradicted is consistent with the equally established fact that shortly after the two cheques were dishonoured, the appellant honoured five subsequent cheques issued by the respondent and he referred to exhibits N, O, P, Q, and R. I doubt if the contention and submission of the learned counsel for the respondent adequately negate the contention of the appellant that as at the time the two vexed cheques were tendered, the respondent was in debit in the appellant’s Bank.

Learned counsel for the respondent contended that there is no conclusive evidence that Exhibit U was received by the respondent. He urged the court to resolve issue No.1 in the affirmative because the dishonouring of the cheques was wrongful as the appellant owed the respondent a duty of care in their relationship of banker/customer and was recklessly negligent in failing to honour the respondent’s cheques when his (respondent’s) account was still within the limit of the overdraft facility granted him.

In reply to issues canvassed in the respondent’s brief in which the learned counsel for the respondent made so much weather about Exhibit Z 6 in which he held steadfastly that the initial overdraft was N60,000.00 the learned Senior Advocate argued that the said Exhibit does not state that the initial overdraft was N60,000.00. Exhibit Z 6 is instead stamping of legal mortgage to cover N60,000.00 and not that that amount was the loan initially granted.

The contentions of both the appellant and the respondent on issue No.1 are two fold. First,whether the initial loan facility was N60,000.00. Secondly, whether as at the time the two vexed cheques were issued and presented for withdrawal the respondent’s account in the appellant’s bank had functional funds.

As regards the first poser, the respondent placed so much reliance on Exhibit Z 6 to buttress his argument that the initial loan facility was N60,000.00 and that as at 12/3/87. when the two cheques were returned by the appellant, his current account was in funds. The appellant retorted by saying that the ceiling of the loan facility availed to the respondent was N40,000.00 and that as at the time the said two cheques were presented, the respondent had overshot his facility from N40,000.00 to N53,413.49.

I am of opinion that a close consideration of exhibits Z6 and F and/or U will probably proffer an answer. Thus, Exhibit Z6 is a letter written by W.A. Ogbaudu Onoriobe & Co. who are the respondent’s solicitors to the appellant in respect of the account of the respondent’s company. It is dated 26th May, 1986, the title of the letter (Exhibit Z6), the addressee and the last paragraph are of moment and they are reproduced as follows:

“The Manager,

Union Bank of Nigeria Ltd.,

Warri Sapele Road,

Warri.

Dear Sir,

Registration and Stamping of Legal Mortgage dated 6/9/77 Registered as 50/50/458 Legal Mortgage to Cover N60,000.00, Account: Okubama Sons and Brothers (West Africa).

Bill of professional charges for search, Military Governor’s approval, Stamping, registration and disbursements in respect of the above mentioned property in your instructions vide your letter of 27th March,

1986………………..

We enclose herewith the original Deed of Mortgage dated 26th May, 1986 registered as 31/31/697, Benin city, Please”.

Equally of relevance to the issue of whether or not N60,000.00 is the initial loan is one of the documents making up exhibit Z3. That document reads in part as follows:

“Military Governor’s Office

Department of Lands & Survey

(Lands Division)

Benin city.

14 May, 1986.

Ref: No. L. 9125/9,

Mr. Johnson D. Okubama,

C/o W. A. O. Onoriobe Esq.

P.O. Box 1842,

Warri.

Dear Sir,

Application for Consent for Subsequent Transaction on the Land Under the Land Use Decree 1978.

I am directed to refer to your application Ref. No…….. of 27th March 1986 for consent for subsequent transaction in respect of the property, the particulars of which are as follows:

(1) Nature of Grant               Deed of Lease

(2) Date:                            6th September 1977

(3) Registration                    Particulars 50/50/458

(4) Size of Land                   1034.82Sq Yard

The purport of Exhibit Z6 is that the respondent executed a mortgage on his property valued N60,000.00 on 6/9/77 while Exhibit Z3 is the consent of the Military Governor of Bendel State (as at then was) for the respondent to mortgage the same property from 27th March, 1986. None of the two exhibits portrays that the sum of N60,000.00 was in respect of loan facility. The best deduction from Exhibit Z6 is that the respondent to all intents and purposes simply informed the appellant that he had a property which had been regularly registered and stamped as legal mortgage up to the limit of N60,000.00. There is no evidence that the appellant approved the sum of N60,000.00 as either loan facility or initial loan facility. The only documentary evidence that the appellant approved ‘banking facility’ for the respondent is as per Exhibit F or U dated 3rd February, 1987. It is clearly stated in Exhibit F by the appellant that in view of the respondent’s ‘unsatisfactory level of performance’ of his account, ‘the Bank has therefore decided to peg facility” marked for this business at’

See also  Prince Adetunji Balogun & Ors. V. Albaji W. B. Alli-owe & Ors. (2000) LLJR-CA

“O/D – N40,000.00(forty thousand Naira for the time being.”

It is obvious from the foregoing that as at 3rd February, 1987 the ceiling of the overdraft facility available to the respondent was N40,000.00. Exhibit F went further to state that the said facility would expire on 25th June, 1987.

The respondent confirmed the fact of pegging the loan facility as per his evidence on page 35 lines 16 and 17 of the record where he said:

“As at 3/2/87, the bank as per Exhibit F had pegged my facility to N40,000.00.”

It is worthy of note that Exhibit F was tendered through the respondent who admitted receiving it. On the same page 35 lines 21 to 23 of the record respondent said:

“From Exhibit G, I can see the 2 cheques relating to N.P.A. The dates the cheques were returned is (sic) 12/3/87 i.e. the 2 cheques. The account of same as at 9/3/87 was reading N53,413.49 (fifty three thousand, four hundred and thirteen naira forty nine kobo) as debt.”

From the foregoing, can it be said that the respondent’s current account with the appellant was in functional funds? The answer is utterly in the negative. It is obvious that when the two cheques were returned by the appellant the respondent’s account was in debit. It is trite that when a customer who has exceeded overdraft facility issues a cheque he is indeed asking for a loan and the Bank has a discretion to honour or dishonour the cheques. See Adereti & Anor v. Attorney General Western Nigeria (supra) at page 270. In the instant case, there is sufficient evidence that the respondent’s account with the appellants was in debit. It is settled law that in the circumstances that the respondent found himself, the appellant had no duty to honour the said two cheques. See: Highgrade v. First Bank of Nigeria Ltd. (supra) at page 122. It is also trite to say that the refusal of such cheques cannot grant a cause of action in the absence of proved evidence to the contrary. See Union Bank of Nigeria Plc. v. Sax Nig. Ltd.(1994) 8 NWLR (Pt.361) 150, (1994) 9 SCNJ 1 at 9. It is equally settled that exceeding overdraft facilities by a bank’s customer is not a legal right but a privilege. The bank does not become liable in dishonouring such cheques neither will the bank be liable in negligence.

As regards the award of N1,047,905.50 converted form $12,779.33 as special damages, I entirely agree that there was no strict proof of the rate of conversion when the cause of action arose in February, 1987. Rate of fiscal conversion cannot be judicially noticed. There is need to call in aid an expert and most reliably that expert should be from the Central Bank of Nigeria which controls the rates of exchange and has sufficient documentations of the periods different rates applied.

In view of the foregoing, it is abundantly clear that the learned trial Judge failed in her duty to properly evaluate the evidence before her and to draw proper inferences. The resultant effect of these irregular evaluation, inferences and conclusions is the interference by this court with finding of facts of the trial Court. See B. Ude & 2 Ors v. N. Chimbo & 3 Ors.(1998) 12 NWLR (Pt.577) 169 (1998) 10 SCNJ 23 at 40 and Ifeanyi Chukwu Osondu Co. Ltd. v. Akhigbe (1999) 11 NWLR (Pt. 625) 1 at 18. I according interfere with the finding of facts of the trial Court and resolve issue No.1 in the negative.

As regards issue No.2, the learned Senior Advocate for the Appellant submitted that the learned trial Judge palpably erred to have held that since subsequent cheques were honoured after the dishonoured two cheques, the respondent was entitled to draw upon his account. He reiterated the clear evidence of both the appellant and the respondent, as reflected in Exhibits F and U and page 35 lines 20 to 23 of the record that the respondent’s account with respondent was in debit. He also referred to page 46 lines 23 to 34 of the record where the appellant’s sole witness explained that subsequent five cheques honoured by the appellant was done on magnanimous ground. The Respondent did not controvert this assertion, which only portrayed exercise of discretion in respect of demands in excess of the overdraft facility. He submitted that if a customer exceeds his overdraft facilities and the bank honours subsequent cheque or cheques, it does not confer a legal right but a privilege which is at the discretion of the banker. If the bank dishonours such cheque or cheques, bank does not become liable in negligence and he relied on the cases of Union Bank of Nigeria Plc v. Sax (Nig) Ltd (supra) at page 19 and Highgrade V. First Bank of Nigeria Ltd. (supra) at page 122 as well as Sheldon & Filders Practice & Law of Banking 11th Edition particularly at pages 26, 36, 170-171 and 181 -191. Learned Senior Advocate referred to page 11 lines 22 and 23 of the record where the learned trial Judge opined that since the subsequent cheques were honoured by the Appellant, it amounted to ‘special agreement’. He submitted that the learned trial Judge was in grave error to have held so in the absence of any legal proof that the respondent was not enjoying a discretionary and magnanimous gesture of the appellant.

The respondent was apparently silent in his brief and the oral amplification by his learned Counsel on this issue. It therefore means that the respondent has little to urge on the court on this issue. Despite the overt silence of the respondent on this issue, it is the bounden duty of the court to consider the merit or demerit of the appellant’s argument.

I have carefully considered the submission of the learned Senior Advocate in relation with the pleading and the evidence on printed record, I entirely agree that appellant had a discretionary power to honour or dishonour the respondent’s cheques issued while his account with the appellant was in debit. This discretionary power could hardly, in the prevailing circumstances, confer any legal right on the respondent whose account was in debit. Furthermore, I equally agree with the learned Senior Advocate that the appellant merely invoked its discretion when it honoured the subsequent five cheques. That gesture could not have amount to ‘special agreement’ because there is no evidence to that effect. Accordingly, the payment of the subsequent cheques could not amount to breach of contract. It is instead an exercise of the appellant’s discretionary power. Issue No.2 is therefore resolved in the negative.

Issue No.3 deals with the awarded of damages by the trial court. Learned Senior Advocate submitted that excessive damages, such as in this appeal, cannot be award in a purely contractual action and where it is done the appellate court is duty bound to review them downwards where they are high and upwards where they are low. He cited the cases of Allied Bank of Nig. Ltd v. Jonas Akubueze (1997) 6 NWLR (Pt. 509) 374 at 406 and Union Bank of Nigeria v. Odusote Bookstores Ltd. (1995) 12 SCNJ 175 at 203, (1995) 9 NWLR (pt.421) 558.

Learned Senior Advocate further submitted that, the learned trial Judge was wrong to have awarded triple damages of N1,047,905.00 for appellant’s negligence in dishonouring the two cheques, N4,000,000.00 as general damages for dishonouring two cheques and N500,000.00 as general damages for shock, inconveniences and loss of reputation arising from the dishonouring of the two cheques. He contended that these three awards relate to the same subject-matter and amounted to triple compensation and that it is wrong to do so. He relied on the cases of Artra Industry Ltd. v. Nigeria Bank for Commerce and Industry (1998) 4 NWLR (Pt.546) 357 (1998) 3 SCNJ 67 at 130; Agaba v. Otobusin (1961) 1 SCNLR 13, (1961) 1 All NLR 3l2 at 315; Ogbechie v. Onochie (1988) 1 NWLR (Pt. 70) 370 at 372; Onaga v. Micho & Co. (1961) All NLR 324 at 328, (1961) 2 SCNLR 101 and Medical and Dental Council of Nigeria v. System Informatix Ltd. (1998) 12 NWLR (Pt.577) 258 at 264. He finally urged the court to hold that this is an appropriate case to interfere with the excessive arid arbitrary awards and he relied on The Akubueze case (supra) and Elf v. Sillo (1994) 6 NWLR (Pt. 350) 258 at 274.

In reply, the learned counsel for the respondent was prudent enough to concede that the learned trial Judge erred in awarding double compensation. In view of the concession of the learned counsel for the respondent and the state of the pleading particularly paragraph 26 of the further, further amended statement of claim (supra) no further useful purpose will be served by embarking on any incisive consideration of this issue. Suffice it to say that both the awards of N500,000.00 and N4,000.00.00 as general damages in the same case amounted to double compensation. As regards the sum of N1,047,905.00 awarded as special damages, it has already been held in this appeal that there is no strict proof of this head of claim as it is required by law. It is trite that an appellate court will not ordinarily interfere with the award of damages by the trial court unless the award is shown to be either manifestly too high or manifestly too low or has acted under a mistake of law. See: Ijebu Ode Local Government (supra) at 136; Elf (Nig.) Ltd. v. Sillo (supra) at page 274 and Ifeanyi Chukwu Osondu Co. Ltd. v. Akhigbe (supra) at 25.

See also  Chief C. O. Odumegwu Ojukwu V. Hon. Justice Kaine (Rtd) & Ors. (2000) LLJR-CA

In view of the above principle, the learned trial Judge acted under a mistake of law in awarding double compensation and want of strict proof in a claim for special damage. I accordingly set aside that three heads of claim for damages and resolve this issue in the affirmative.

Issue No.4 deals with want of the court’s jurisdiction where the respondent is alleged not to have paid the prescribed fees for monetary claims.

The learned Senior Advocate for the appellant meticulously highlighted the several monetary claims in this matter from its inception to the several amendments to the statement of claim and contended that the prescribed fees had not been paid. He submitted that this is clearly in contravention of the provision of the Second Schedule Part 1, to the High Court (Civil Procedure) Rules, 1988 of the defunct Bendel State (now applicable to Delta State). He further submitted that since the respective statutory fees were not paid in respect of reliefs for N1,000,000.00 and N9,664,250.00 when the amended statement of claim was filed at different times, the trial court lacked jurisdiction in entertaining the case. He equally submitted that the payment of statutory fees in any civil litigation by any plaintiff is a condition precedent before trial court can assume jurisdiction. The failure of the respondent to meet the said condition precedent he contended was an act in error, which has adversely affected the entire judgement and renders it null and void. He went on to submit that, it is trite law that a court shall not entertain a relief claimed without the payment of the prescribed requisite fees unless such fees have been waived or remitted by the court or such fees are payable by any Government department or Local Government pursuant to the provisions of the High Court Rules. He cited the case of Onwugbufor & 2 Ors v. Okoye & Ors. (1996) 1 SCNJ 1 at 36, (1996) 1 NWLR (pt.424) 252.The learned counsel for the respondent appeared to have refrained from this issue on his brief of argument. This issue relates to the competence of the trial court of adjudicate in this matter. It is settled law that a court is competent to adjudicate in an issue before it if.

“1. It is properly constituted as regards numbers and qualifications of the members of the bench and no member is disqualified for one reason or a another; and

  1. the subject matter of the case is within its jurisdiction and there is no feature in the case which prevents the court from exercising jurisdiction and;
  2. the case comes before the court initiated by due process of law and upon fulfillment of any condition precedent to the exercise of jurisdiction. Any defect in competence is fatal for the proceedings and a nullity, however well conducted and decided, the defect is extrinsic to jurisdiction”. See Gabriel Madukolu & Ors v. Johnson Nkemdilim (1962) 1 All NLR 587 at 595; (1962) 2 SCNLR 341 at 348.

I have perused the record of proceedings with particular reference to the several pleadings in form of amendments filed by the respondent and I observed that he (the respondent) did not pay the prescribed fees on the monetary reliefs therein. The respondent did not venture to proffer any excuse for this omission when he testified. In view of the principles enunciated in the cases of Onwugbofor & 3 Ors v. Okoye & 3 Ors. (supra) and Madukolu v. Nkemidilim (supra) I hold that the trial court lacked jurisdiction ab initio in this matter and it is accordingly struck out. Issue No.4 is therefore resolved in the negative. On issue No.5, the learned Senior Advocate reiterated that the claim of the sum of N1,047,905.50 is for the tort of negligence occasioned when the appellant failed to honour the two cheques issued to N. P. A. Despite the fact that the relief sought by the respondent was for negligence, the trial court held that failure to honour those cheques was a breach of contract. He submitted without conceding that even if the claim in negligence was regular it has not been strictly proved as it is a claim for special damages and he relied on the cases of A.G. Anduba Ltd v. Onuselogu Enterprises Ltd. (1956-88) (M.S.) NSCC 50; Inland Containers (Nig.) Ltd v. R.C.T. Co. Ltd (1997) 8 NWLR (Pt. 517) 505 and Sommer v. F.H.A. (1992) 1 NWLR (Pt. 219) 548. He contended that the tort of negligence presupposes the existence of a duty of care and went on to submit that no evidence has been established that a duty of care towards the respondent has been breached by the appellant.

The question is:

What is the propriety in seeking damages for negligence where cheques have been dishonoured in bank/customer relationship?. It is improper for a party in a banker/customer relationship to seek relief for negligence when the cheque issued by the customer is dishonoured by the banker. Such relief should instead be sought as liquidated damages for breach of contract. This rules out the applicability of the principle in Hadley v. Baxendale (1854) 9 Exh. 341; 156 E.R. 145 which is to the effect that where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be as much as may fairly and reasonably be considered either arising naturally i.e. according to the usual course of things, from such 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 the probable result of the breach of it. See Salami v. Savannah Bank of Nig. Ltd (1990) 2 NWLR (pt. 130) 106 at 127.

Since a cheque is a bill of exchange under section 2(1) of the Bill of Exchange Act, Cap, 35, Laws of the Federation of Nigeria, 1990 the measure for the award of damages is by virtue of Section 57 which essentially stipulates that where a bill is dishonoured the measure of damages shall be deemed to be liquidated damages. The holder may recover from any party liable on the bill and the drawer who has been compelled to pay the bill may recover from the acceptor and an endorser who has been compelled to pay the bill may recover from the acceptor or from the drawer or from a prior endorser:

(a) the amount of the bill,

(b) interest thereon from the time of presentment if the bill is payable on demand, and from maturity of the bill in any other case, and the expenses of noting, or when protest is necessary, and the protest has been extended, the expenses of the protest.

See U.B.N Plc v. SCPOK (Nig) Ltd. (1998) 12 NWLR (Pt. 578) 439. This case also decided that the award and measure of damages under the said section 57 do not include award of general damages.The permissible award is liquidated damages. The foregoing principles deal with a situation where a cheque has been wrongfully dishonoured by the banker.

In the instant case, the learned trial Judge apparently veered from the basis of the claim of N1,047,905.50 which is in negligence and awarded that amount for breach of contract. This digression, in my view, appears not to have assisted the situation because of non-compliance with the provision of Section 57 of the Bills of Exchange Act (supra) which stipulated, inter alia, that the amount recoverable as liquidated damages is the amount of the bill. In the instant case the sum total on the dishonoured two cheques is N7,432.56. In effect,the liquidated damages recoverable from the appellant is N7, 432.56 as opposed to the outrageously staggering amount of N1,047,905.50.

It is worthy of note that the sum of N1,047,905.50 which the respondent claimed and was awarded as special damages had been held under issue No 1 (supra) that is was not strictly proved as expected in law. See Salami v. Savannah Bank of Nig. Ltd. (Supra) at pages 126 and 127.

From the foregoing, the award of N1,047,905.50 by the learned trial Judge was borne under a mistaken appreciation of the applicable law and that mistake has afforded this court the power to interfere with the award. Issue No.5 is resolved in the negative and the award of N1,047,905.50 is accordingly set aside.

In the final analysis, I final merit in the appeal and it is allowed. The decision of trial court delivered on 25th of September,1998 is set aside. I award the sum of N5,000,00. costs to the appellant.


Other Citations: (2000)LCN/0752(CA)

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