GTB v. REGISTERED TRUSTEES OF NEPWHAN (2021)

GTB v. REGISTERED TRUSTEES OF NEPWHAN

(2021)LCN/15139(CA)

In The Court Of Appeal

(ABUJA JUDICIAL DIVISION)

On Thursday, May 06, 2021

CA/A/693/2019

Before Our Lordships:

Abubakar Datti Yahaya Justice of the Court of Appeal

Uchechukwu Onyemenam Justice of the Court of Appeal

Peter Olabisi Ige Justice of the Court of Appeal

Between

GUARANTY TRUST BANK PLC APPELANT(S)

And

REGISTERED TRUSTEES OF NETWORK OF PEOPLE LIVING WITH HIV/AIDS IN NIGERIA (NEPWHAN) RESPONDENT(S)

RATIO

IMPORTANCE OF TENDERING THE CERTIFICATE OF INCORPORATION ISSUED BY THE CORPORATE AFFAIRS COMMISSION IN PROVING THE LEGAL PERSONALITY OF AN ENTITY OR ORGANIZATION

It is a settled principle of law, that for an entity or organization to prove that it is a legal personality, it needs to present its Certificate of Incorporation issued by the Corporate Affairs Commission. This is the position of the law even if the adverse party admits same. See DAIRO & ORS. VS REGISTERED TRUSTEES OF ANGLICAN DIOCESE OF LAGOS (SUPRA) AT PAGES 19-21, which also placed reliance on the case of J.K. RANDLE VS, KWARA BREWARIES LTD. (1986) 6 SC. 1. PER ABUBAKAR DATTI YAHAYA, J.C.A.

WHETHER A COURT IS NOT ENTITLED TO GO THROUGH ITS FILE SUO MOTU, TO MAKE USE OF ANY DOCUMENT THEREIN, PERTAINING TO THE ISSUE RAISED BY THE PARTIES, WHEN IT IS ENGAGED IN WRITING ITS JUDGMENT

A Court is entitled to go through its file suo motu, to make use of any document therein, pertaining to the issue raised by the parties, when it is engaged in writing its judgment, see SUSWAM VS. FRN & ANR (2020) LPELR – 49524 (CA). It is not compulsory that it must say so. It is enough if an appellate Court can see such document in the record of the Court. PER ABUBAKAR DATTI YAHAYA, J.C.A.

EFFECT OF THE FAILURE OF A BANK TO HONOUR A CUSTOMER’S CHEQUE

I am aware that a bank is contractually bound to honour a cheque of a customer once there are sufficient funds in the account. This is not only basic, it is fundamental as that is one of the essence of banking transactions. Where a bank fails to so honour the cheque, it has breached its contractual obligation and it is liable in damages. In WEMA BANK PLC VS OSILARU (SUPRA) it was held that “where a banker refuses to pay a customer’s cheque as in the instant case, when the banker holds in hand an amount equivalent to that endorsed on the cheque belonging to the customer, such an act of refusal amounts to a breach of contract. An action lies in damages for breach of contract.” PER ABUBAKAR DATTI YAHAYA, J.C.A.

WHETHER A BANK CAN FREEZE, PLACE A “CAUTION” OR ANY FORM OF RESTRAIN ON ITS CUSTOMER’S ACCOUNT, IN THE ABSENCE OF A COURT ORDER TO THAT EFFECT

A Mareva application is not and cannot be equated to an Order of Court. The application may or may not be heard. It could suffer a procedural disability and be struck out. It may even be argued and dismissed on the merits. This means it is not conclusive in itself. It is therefore totally erroneous for a party such as the Appellant herein, to go ahead and deny a customer access to his funds, on a mere Mareva application. I am not impressed by the argument that it was done as a duty to the Court. There were other Respondents in the Mareva application. Furthermore, contrary to the usual practice of making the application ex parte, it was done on notice, thereby discarding any idea of urgency and secrecy which are the fundamental aspects of a Mareva application — AKINGBOLA VS CHAIRMAN EFCC (2012) LPELR – 8404 (CA) 33 AT 34. That was enough to show the Appellant that there was no urgency and ought to exercise restraint and patience to see the outcome and not rush to an overzealous action, being more Catholic than the Pope. This can never be equated to a situation of lis pendens at all, as argued by the Appellant. It is still the law, that for a bank to freeze, place a “caution” or any form of restrain on its customer’s account, it has to be satisfied that there is a Court Order to that effect, otherwise it will be liable for a breach of contract, unless there is a statute that gives it such mandate. See G.T.B PLC VS. ADEDAMOLA (2019) 5 NWLR (PT. 1664) 30 AT 43; U.B.A. VS MARCUS (2015) LPELR – 40397 (CA); DIKE VS. ACB LTD. (2000) 5 NWLR (PT. 657) 441; AND OLALEKAN OYERINDE VS. ACCESS BANK PLC. (2014) LPELR – 23461 (CA). PER ABUBAKAR DATTI YAHAYA, J.C.A.

WHETHER WHERE BREACH OF CONTRACT HAS BEEN ESTABLISHED DAMAGES MUST BE AWARDED

In MEKWUNYE VS. EMIRATES AIRLINES (SUPRA), the Supreme Court held that once a breach of contract is established by the plaintiff, then damages follow, and the general damages to be awarded, are the losses that flow naturally. It is not pleaded or proved but generally assumed. see also RE:ABDULLAHI (2018) 14 NWLR (PT.1639) 272 AT 295. PER ABUBAKAR DATTI YAHAYA, J.C.A.

ABUBAKAR DATTI YAHAYA, J.C.A. (Delivering the Leading Judgment): This appeal is from the Judgment of the High Court of the Federal Capital Territory, Abuja delivered on 5th July 2019 in Suit No. CV/4401/2012.

Peter Ikiti & 7 Others filed a Motion for Mareva Injunction in Motion No, M/11713/2012, against Incorporated Trustees of Network of People Living with HIV/AIDS in Nigeria and 11 Others. The Appellant herein was the 10th Respondent whilst the Respondent herein, was the 1st Respondent in the said Mareva Injunction application. One of the reliefs sought for in the application, is an injunctive order against the Appellant herein (as the 10th Respondent) and two other financial institutions restraining them from allowing the Respondent in this appeal, to withdraw and/or dissipate any funds in the listed accounts domiciled with each financial institution. Upon being served with the application, the Appellant herein, placed “caution” on the said accounts domiciled with it. This was the action that the Respondent herein felt was unjustified and it took out an action against the Appellant herein, and claimed the following.:

A declaration that the refusal of access to the Plaintiff’s account by the defendant is wrongful and a breach of contract.
b. An order directing the defendant to allow the Plaintiff have access to the funds in its bank account with the Defendant.
c. An order directing the defendant to indemnify the Plaintiff for all the loss occasioned to third parties by the plaintiff as a result of the conduct of the defendant.
d. An order directing the Defendant to pay to the Plaintiff for all lost profits and incidental expenses incurred by the Plaintiff as a result of the Defendant’s action and/or omissions.
e. An order directing the Defendant to pay the Plaintiff the current banking interest on the said amount till the date of release of the sum.
f. An order directing the Defendant to pay the Plaintiff the Sum of One Hundred Million Naira as (N100, 000,000) as damages for breach of contract.
g. The cost of this suit.

After trial, Judgment was delivered in favour of the Respondent. Hence this appeal.

The Appellant’s brief was settled by Mr. Oli Chukwudi Prince and was filed on 11th September 2019. He identified four

issues for determination —
1. Whether the trial Court was right when it granted declarative reliefs in favour of the Respondent who did not prove its legal personality. (Ground 3 of the Notice of Appeal).
2. Whether the trial Court was right when it held that the Appellant’s refusal to allow the Respondent access its account is wrongful and a breach of contract. (Grounds 1 and 2 of the Notice of Appeal).
3. Whether the trial Court was right when it granted reliefs not sought by the Respondent. (Grounds 4 and 5 of the Notice of Appeal).
4. Whether the trial Court was right when it entered Judgment in favour of the Respondent and awarded the total sum of N5,500,000.00) in favour of the Respondent as damages and cost of the suit, (Grounds 6 and 7 of the Notice of Appeal),

He also filed a Reply brief to the Respondent’s brief which was settled by Mr. Alozie Nmerengwa and filed on 23rd October, 2019. He adopted the issues distilled by the Appellant.
I shall utilise the issues identified by the Appellant.

ISSUE 1
“Whether the trial Court was right when it granted declarative reliefs in favour of the Respondent

which did not prove its legal personality.”

Learned counsel for the Appellant submitted that there is nothing in the record of appeal and the supplementary record, that shows that the Respondent proved its status or a legal personality, to be able to sue, especially as none of the documentary evidence tendered by the Respondent as Exhibits 1 – 8 bears the Respondent’s certificate of incorporation, relying on DAIRO & ORS. VS. REGISTERED TRUSTEES OF THE ANGLICAN DIOCESE OF LAGOS (2017) LPELR – 42573 SC; AGALA & ORS VS EGWERE & ORS. (2010) 5 SCM 22 AT 37, counsel submitted that the only way to prove the legal personality of a juristic person is by tendering its certificate of incorporation. He drew attention of this Court to the fact that although the Respondent, at paragraph 1 of the statement of claim averred that it is a duly registered non-governmental organization, that averment was challenged by paragraph 1 of the Appellant’s statement of defence, and that being an issue, the Respondent should have tendered its incorporation certificate. Since it did not, he argued, it had abandoned the fact it pleaded and this was fatal to its case-

AIYEOLA VS. PEDRO (2014) 13 NWLR (PT. 1424) 409 AT 444 AND FALEKE VS. INEC (2016) 18 NWLR (PT. 1543) 61 149-150. He emphasised that since the legal personality of the Respondent had not been proved, it lacked the locus standi to sue and the trial Court lacked the jurisdiction to entertain the suit – OJUKWU VS OJUKWU & ANOR. (2008) LPELR — 2401 (SC) PP. 10-11. It should have dismissed same he argued. He urged us to resolve the issue in favour of the Appellant.

In his reaction, learned counsel for the Respondent submitted that the contention of the Appellant is misconceived as the legal personality of the Respondent was never in issue at the trial Court. He referred to paragraph 1 of the statement of defence and argued that it is a clear admission of the legal personality of the Respondent; that whatever denial was made, was not clear and frontal and was therefore deemed admitted – POPOOLA VS. OWENA PRESS LTD (2011) 52 WRN 85 AT 112; OGBONNA VS. OGBUJI (2014) 6 NWLR (PT. 1403) 205 AT 235 AND VEEPEE IND. LTD. VS. COCOA IND. LTD. (2008) 37 WRN 145 AT 170. He also referred to ground 1 of the Preliminary Objection filed by the Appellant in October

2012, which stated that the Respondent is “a body corporate with a Board of Trustees duly registered with the Corporate Affairs Commission” and argued that this amounts to an admission, and that what is admitted needs no further proof — Section 123 of the Evidence Act 2011. Further, that the Certificate of Incorporation of the Respondent was infact exhibited at the trial Court — page 62 of the record.

Learned counsel also argued that the issue of legal personality of the Respondent did not form part of the decisions of the trial Court and to raise it, the Appellant needed to seek leave of Court and obtain it – IBRAHIM VS. OBAJI (2019) 3 NWLR (PT. 1660) 389 AT 410. This is now merely an academic issue he argued, and should not be entertained – OKE VS. MIMIKO (NO. 1) (2014) 1 NWLR (PT. 1388) 225 AT 254 – 255 AND EKELE VS. IWODI (2014) 15 NWLR (PT. 1431) 557 AT 579. He urged us to resolve the issue in favour of the Respondent.

At page 4 of the record of appeal, is paragraph 1 of the statement of claim filed by the Respondent. It states —
“The plaintiff is a duly registered Non-Governmental Organization with registration number

CAC/IT/N017533 and its registered address is situate at Asokoro within the jurisdiction of the Honourable Court”.

The Appellant in paragraph 1 of the statement of Defence averred that:
“The Defendant admits paragraph 1 of the Statement of Claim only to the extent that the plaintiff present to this Honourable Court a Certified True Copy of a Certificate of Incorporation in respect of same.”

The averment is clear. The Respondent herein would only be accorded the toga of a legal personality, if it presents, Certificate of Incorporation. It is therefore not an admission by the Appellant at all. It also clearly shows that parties had joined that issue. It is a settled principle of law, that for an entity or organization to prove that it is a legal personality, it needs to present its Certificate of Incorporation issued by the Corporate Affairs Commission. This is the position of the law even if the adverse party admits same. See DAIRO & ORS. VS REGISTERED TRUSTEES OF ANGLICAN DIOCESE OF LAGOS (SUPRA) AT PAGES 19-21, which also placed reliance on the case of J.K. RANDLE VS, KWARA BREWARIES LTD. (1986) 6 SC. 1.

The position in this appeal is that the duty is squarely on the Respondent as plaintiff, which averred that it is a legal personality by virtue of incorporation, to present the Certificate of Incorporation, otherwise it would have no locus to institute the action. The Appellant here, has argued that there is nothing in the record, to show that the Respondent had proved its legal personality. This cannot be correct, for as the Respondent has shown, page 62 of the record of appeal, is a Certified True Copy of the Certificate of Incorporation of the Respondent, duly issued by the Corporate Affairs Commission. It was part of the record of the trial Court and Exhibit A was attached to the counter-affidavit in opposition of the defendant’s (now Appellant) Preliminary Objection, filed at the trial Court. Not only were the parties aware, the Certificate of Incorporation was before the trial Court and in its file. A Court is entitled to go through its file suo motu, to make use of any document therein, pertaining to the issue raised by the parties, when it is engaged in writing its judgment, see SUSWAM VS. FRN & ANR (2020) LPELR – 49524 (CA). It is not compulsory that it must say so.

It is enough if an appellate Court can see such document in the record of the Court. Here, it is at page 62 of the record. The fact that the trial Court did not specifically say it looked at same, is immaterial. It found the document that settled the issue and which proved the legal personality of the Respondent. Its duty was discharged.

The Appellant in the Reply brief, did not address this, as it was raised by the Respondent. The Respondent therefore had the locus to institute the action. Issue 1 is resolved in favour of the Respondent and against the Appellant.

ISSUE 2
“Whether the trial Court was right when it held that the Appellant’s refusal to allow the Respondent access its account is wrongful and a breach of contract”.
Learned counsel for the Appellant argued that the reliance of the trial Judge on the cases of UBN VS. CHIMAEZE (2014) LPELR – 22599 (SC) AND GTBANK VS. ADEDAMOLA 2019 5 NWLR PT. 1664 30 is faulty, as they ought to have been distinguished from the instant matter. He argued that although the principle enunciated in U.B.N VS. CHIMAEZE (SUPRA) is the law on fiduciary relationship between a bank and its customer, the

surrounding circumstances and antecedents, constitute an exception to the general principle. He pointed out that upon being served with the Mareva application which was on Notice and known to all parties, the Appellant took a precautionary measure to protect the mutual interest of the parties, by placing “caution” on the said account, to avoid a situation of a fait accompli and helplessness on the Court, especially as the Respondent had infact attempted to dissipate the funds in the accounts in question. He argued that the placing of the “caution” pending the determination of the Mareva application, was a duty the Appellant owed the Court and it takes precedence over a banker-customer fiduciary relationship and is an exception to the general principle of law on fiduciary duty of a banker. He likened the application to an interlocutory application that has the force of a stay and connotes the doctrine of lis pendens — MILITARY GOVERNOR LAGOS STATE VS OJUKWU (1989) 1 NWLR (PT. 18) 621 AT 637; ST. MICHAEL PHARMACEUTICALS LTD. VS. ASSOCIATES LTD. (2015) ALL FWLR (PT. 812) 1550 AT 1583; DE-JESE(NIG.) LTD. VS. HEMA SECURITIES AND FINANCE PLC. (2014) ALL FWLR

(PT. 710) 1408 AT 1419 AND DENTON-WEST VS. MUOMA (2008) 6 NWLR (PT.1083) 418 AT 450. He urged us to resolve the issue in favour of the Appellant.

Arguing to the contrary, learned counsel for the Respondent submitted that the action of the Appellant amounts to a breach of contract as a bank has to honour a customer’s cheque when there are funds in the account and a refusal to do so, will be actionable, and liable in damages — WEMA BANK PLC. VS. OSILARU (2008) 4 WRN 160 AT 178 AND MEKWUNYE VS. EMIRATES AIRLINES (2019) 9 NWLR (PT. 1677) 191 AT 225.

It was out of order for the Appellant to introduce the issue of lis pendens he argued, as it cannot be invoked to over reach a party in a suit. Since the motion seeking injunctive reliefs was sought for from the Court and not the bank, he argued, it was erroneous to grant them sitting in its board room. Unless there is a Court Order, the Appellant was not entitled to freeze the Respondent’s account.

The Appellant has not referred to any authority, stating that the pendency of a Mareva application in an exception to the general principle of law on fiduciary duty of a banker to its customer. I am

aware that a bank is contractually bound to honour a cheque of a customer once there are sufficient funds in the account. This is not only basic, it is fundamental as that is one of the essence of banking transactions. Where a bank fails to so honour the cheque, it has breached its contractual obligation and it is liable in damages. In WEMA BANK PLC VS OSILARU (SUPRA) it was held that “where a banker refuses to pay a customer’s cheque as in the instant case, when the banker holds in hand an amount equivalent to that endorsed on the cheque belonging to the customer, such an act of refusal amounts to a breach of contract. An action lies in damages for breach of contract.”

Court. There were other Respondents in the Mareva application. Furthermore, contrary to the usual practice of making the application ex parte, it was done on notice, thereby discarding any idea of urgency and secrecy which are the fundamental aspects of a Mareva application — AKINGBOLA VS CHAIRMAN EFCC (2012) LPELR – 8404 (CA) 33 AT 34. That was enough to show the Appellant that there was no urgency and ought to exercise restraint and patience to see the outcome and not rush to an overzealous action, being more Catholic than the Pope. This can never be equated to a situation of lis pendens at all, as argued by the Appellant. It is still the law, that for a bank to freeze, place a “caution” or any form of restrain on its customer’s account, it has to be satisfied that there is a Court Order to that effect, otherwise it will be liable for a breach of contract, unless there is a statute that gives it such mandate. See G.T.B PLC VS. ADEDAMOLA (2019) 5 NWLR (PT. 1664) 30 AT 43; U.B.A. VS MARCUS (2015) LPELR – 40397 (CA); DIKE VS. ACB LTD. (2000) 5 NWLR (PT. 657) 441; AND OLALEKAN OYERINDE VS. ACCESS BANK PLC. (2014) LPELR – 23461 (CA).

The Appellant in this appeal, did not have a Court Order mandating it to deny the Respondent access to its account, both to withdraw and to deposit. Its action is not backed by law. It breached the contractual duty it owed its customer, the Respondent and is liable in damages —MEKWUNYE VS EMIRATES AIRLINES (SUPRA) AT 225. I therefore resolve this issue against the Appellant and in favour of the Respondent.

ISSUES 3 & 4
“3. Whether the trial Court was right when it granted reliefs not sought by the Respondent.
4. Whether the trial Court was right when it entered Judgment in favour of the Respondent and awarded the total sum of N5,500,000.00 in favour of the Respondent as damages and cost of the suit”.
On issue No. 3, learned counsel for the Appellant referred to reliefs 5 and 6 claimed by the Respondent, the decision of the trial Court on same and raised the questions (a) What current banking interest is applicable to the Respondent against the Appellant? (b) Upon which specific accounts is the Appellant liable to pay the said current banking interest? And (c) Upon what amount is the Appellant liable to pay the said current banking interest? He argued that

none of these, was pleaded or established by the Respondent at the trial Court and no such reliefs were sought. Relying on NIGERIAN AIRFORCE VS. SHEKETE (2002) LPELR – 3193 (SC) 23; LADOKE & ORS VS. OLOBAYO & ANR (1992) LPELR – 15138 (CA) 36 AND IYEKE VS. ABU (2015) LPELR – 25735 (CA) 14, counsel submitted that a Court is without power to grant reliefs not sought and that therefore, the Order of the trial Court for the Appellant to pay the Respondent current banking interest on an account from the date of freezing, till the date of release, a relief not sought for in the pleading, or proved, was wrong.

I need to state right away, that the questions posed by the Appellant are such that an interpretation of the Judgment of the trial Court is what is prayed for. It is not the duty of an Appellate Court to interprete the Judgment of a trial Court for the Appellant, especially where it is clear and unambiguous. As learned counsel for the Respondent has stated, the Court was clear on the reliefs granted. Again “current banking interest” must refer to the current banking interest at the time of the Judgment for which the Appellant as a bank must be

deemed to know without any struggle, since that is its daily business.

The submission of the Appellant that the Respondent did not seek the relief of current banking interest in his pleading is not correct. Relief (c) in the statement of claim of page 6 of the record reads —
“An Order directing the Defendant to pay the Plaintiff the current banking interest on the said amount till the date of release of the sum”.

It is therefore crystal clear that the relief was sought for and the Appellant is not in order to submit the contrary. It is on the basis of the relief sought for, that the trial Judge at page 154 ordered —
“The Defendant is also ordered to pay the Plaintiff current banking interest on the said amount from the date of freezing till the date of release, which is today”.

Issue No. 3 has not been made out at all and it is therefore resolved against the Appellant and in favour of the Respondent.

In respect of issue No. 4, learned counsel for the Appellant at page 19 of the brief, paragraph 7.1, submitted that —
“The generality of the Appellant’s arguments in issues 1, 2 and 3 above is to

the effect that the Respondent is not in any way entitled to the Judgment entered in its favour by the trial Court on 5th July, 2019, To this end, and to the extent that this Honourable Court concedes with the Appellant in that regard, the award of the total sum of N5,500,000.00 (Five Million Five Hundred Thousand Naira) as damages and cost is not justifiable and has no leg to stand”.

Counsel argued that since award of damages is usually presumed in law to be the direct, natural or probable consequence of an act complained of, where the claim is found to lack merit, the award of damages cannot stand — TAO AND SONS INDUSTRIES LTD. VS GOVERNOR OYO STATE & ANR (2010) LPELR – 5002 (CA) 14-15.

My understanding of the above submissions, is that issue No. 4 has its foundation on issues 1, 2 and 3 in that if they fail, issue No. 4 must succeed and be resolved in favour of the Appellant. But if they succeed, then issue No. 4 must fail and be resolved against the Appellant. I have already resolved issues Nos. 1, 2 and 3 in favour of the Respondent. In other words, the trial Judge was right that the Appellant had a duty to honour cheques of a

customer where there are funds. If it fails to do that or places any form of restriction on the account such that the customer is denied access to it there is a breach of duty and that the Appellant had breached that duty, having put a “caution” on the accounts and denying the Respondent access to same. In MEKWUNYE VS. EMIRATES AIRLINES (SUPRA), the Supreme Court held that once a breach of contract is established by the plaintiff, then damages follow, and the general damages to be awarded, are the losses that flow naturally. It is not pleaded or proved but generally assumed. see also RE:ABDULLAHI (2018) 14 NWLR (PT.1639) 272 AT 295. In the premise, the trial Judge was well within his jurisdiction to make the award. Issue No. 4 is thus resolved against the Appellant and in favour of the Respondent, since the foundation i.e. issues 1, 2 and 3 have succeeded.

The Respondent’s brief at page 13, paragraph 4.46 talked about a Respondent Notice. I have not seen such Notice in the file. I therefore decline to address the issue raised therein.

Consequently, this appeal has no merit and it is hereby dismissed in its entirety. I affirm the Judgment of the

trial Court delivered on 5th July 2019.
N350,000 costs to the Respondent.

UCHECHUKWU ONYEMENAM, J.C.A.: I perused before now the lead Judgment just delivered by my learned brother, ABUBAKAR DATTI YAHAYA, JCA.
I agree with the resolutions of my learned Brother in the 4 issues submitted for determination in the lead judgment.
I too hold that the appeal is incompetent and the same is accordingly dismissed. I uphold the judgment of the trial Court delivered on 5th July, 2019 and I abide by the Order made as to costs.

PETER OLABISI IGE, J.C.A.: I agree.

Appearances:

M. Aliyu For Appellant(s)

Alozie Nmerengwa For Respondent(s)