LINTON INDUSTRIAL TRADING COMPANY NIGERIA LIMITED v. CENTRAL BANK OF NIGERIA & ANOR (2013)

LINTON INDUSTRIAL TRADING COMPANY NIGERIA LIMITED v. CENTRAL BANK OF NIGERIA & ANOR

(2013)LCN/6479(CA)

In The Court of Appeal of Nigeria

On Thursday, the 31st day of October, 2013

CA/L/160/2002

JUSTICE

CHINWE EUGENIA IYIZOBA Justice of The Court of Appeal of Nigeria

SAMUEL CHUKWUDUMEBI OSEJI Justice of The Court of Appeal of Nigeria

TIJJANI ABUBAKAR Justice of The Court of Appeal of Nigeria

Between

LINTON INDUSTRIAL TRADING COMPANY NIGERIA LIMITEDAppellant(s)

AND

1. CENTRAL BANK OF NIGERIA
2. NATIONAL BANK OF NIGERIA LIMITEDRespondent(s)

RATIO

WHETHER OR NOT ISSUES FOR DETERMINATION MUST BE BASED ON GROUNDS OF APPEAL FILED BY A PARTY

Now, it is trite that where issues are formulated for determination in a brief of argument, they must be based on the grounds of appeal filed by a party. Where the issues so formulated are not related to any ground of appeal, they to all intents and purposes become irrelevant and go to no issue.
Consequently, any argument in the brief in support of such issue will be discountenanced by the court. See MOMODU VS. MOMOH (1991) 1 NWLR (PT.169) 608, JC LTD VS. EZENWA (1996) 4 NWLR (PT.443) 391, UPS LTD. VS UFOT (2006) 2 NWLR (PT 963) 1 and IBATOR VS. BARAKURO (2007) 9 NWLR (PT.1040) 475. PER OSEJI, J.C.A.

WHETHER OR NOT THE RELATIONSHIP THAT EXISTS BETWEEN A BANKER AND A CUSTOMER IS FOUNDED ON A BANKER AND CUSTOMER CONTRACT

The relationship that exists between a banker and a customer is one founded on a Banker and customer contract. It involves a species of contract with special usages with particular reference to monetary or commercial transactions. Thus a Banker has a duty under its contract with its customer to exercise reasonable care and skill in carrying out its part with regard to transactions within its contracts with its customers. The Banker’s duty to exercise reasonable care and skill stretches over the whole range of banking business within the ambit of the contract with the customer. Consequently, this duty applies to interpreting, ascertaining and acting in accordance with the instruction of the customer. See NNB LTD VS ODIASE (1993) 8 NWLR (PT 310) 235, FIRST BANK OF NIGERIA LTD VS AFRICAN PETROLEUM LTD (1996) 4 NWLR (PT 443) 438; UBA VS FOLARIN (2003) 7 NWLR (PT 818) 18 and AGBANELO VS UNION BANK OF NIGERIA PLC (2004) 4 SC (PT 1) 243. In a situation where Bank presents itself as being professionally competent and skilled to execute certain obligations inherent in a transaction but eventually shirks that responsibility, this constitutes a prima facie act of negligence having failed in the duty of care it primarily owed its customer. See AGBONMAGBE BANK LTD VS CFAO (1966) 1 SCNLR 367 and SGBN LTD VS ELEGANZA INDUSTRIES LTD (2004) 8 NWLR (PT 875) 432. PER OSEJI, J.C.A.

WHETHER OR NOT PARTIES ARE BOUND BY THEIR TERMS OF AGREEMENT IN A CONTRACT

It is settled law that parties to an agreement or contract are bound by the terms and conditions of the contract they signed and the primary duty of the court is restricted to interpretation and enforcement of the terms of the contract as agreed by the parties thereto. See ISHENO VS JULIUS BERGER PLC (2008) 33 NSCQR (PT 1) 296, KAYDEE VENTURES LTD VS MINISTER, FCT (2010 41 (PT 2) NSCQR 830. PER OSEJI, J.C.A.

SAMUEL CHUKWUDUMEBI OSEJI, J.C.A. (Delivering the Leading Judgment): This is an appeal against the judgment of the Federal High Court Lagos Division delivered on 10-2-2000 by R.N. Ukeje CJ in Suit No. FHC/L/CS/469/85 wherein the plaintiff’s claim was dismissed.
The appellant who was the plaintiff before the Federal High Court, Lagos (hereinafter referred to as the lower court) commenced an action claiming against the defendant (now Respondent) as per paragraph 17 of the Amended Statement of Claim dated 20-1-97 as follows:-
A DECLARATION that the Defendant is in breach of Contract having failed to remit the sum of $19,530 (Nineteen thousand, five hundred and thirty U.S. Dollars) to Messrs Linton Industry Company Limited, Hong Kong, being proceeds from 3 lots of C.K.D. Watch components parts despite approval and allocation of foreign exchange by The Central Bank of Nigeria vide CBN FORM M NUMBERS 008436, 008437 and payment of same in Local currency by the Plaintiff.

A DECLARATION that the Plaintiff is entitled to special damages as a result of the Defendant’s failure or neglect to remit the sum of $19,530 (Nineteen Thousand, Five hundred and thirty U.S. Dollars) to Messrs Linton Industrial Company Limited, Hong Kong being amount for the proceeds of 3 lots C.K.D. Watch Components Parts thereby resulting in cancellation by Linton Industrial Co. Ltd. Hong Kong of the remaining 8 lots of C.K.D. Watch components parts vide Proforma Invoice No. W – 0572 – WO579 which were awaiting shipment then, despite approval and allocation of foreign currency by the Central Bank of Nigeria and payment of same in local currency by the Plaintiff.
(c) The sum of N8,800,000.00 being special damages resulting from the said breach by the Defendant.
(d) Payment of sum of $19,530 (Nineteen Thousand, five hundred and thirty U.S. Dollars) of current autonomous exchange rate being an amount due to the Plaintiff as a result of non-remittance of the said sum of Linton Industrial Company Limited, Hong Kong.
(e) Interest on the said sum at the current bank rate per annum from 1984 until judgment on the said sum as in paragraph 4.
(f) 10% monthly interest after judgment till payment is made.

Briefly, the facts of the case was that the appellant was a long standing customer of the Respondent Bank. Sometime in 1984 it submitted three (form Ms) application for foreign exchange allocation, through the Respondent to the Central Bank of Nigeria. It also paid the sum of N14,655,57k which is the Naira equivalent of the total foreign exchange being sought to the Respondent which in turn kept the sum in a suspense account pending the allocation by the Central Bank. However the Central Bank accepted the application but did not release the approved sum. This was the position till 1986 when a new foreign exchange guideline was released with the creation of a Second Tier Foreign Exchange Market. Based on the aforementioned, the appellant’s application earlier approved was rejected by the Central Bank on the ground that the items imported by the appellant was not subjected to Preshipment Inspection by the accredited body (S.G.S.). Accordingly, no foreign exchange was released with respect to the three applications for which the relevant export products have been sent by the exporter (Linton Industrial Trading Company Limited, Hong Kong) and duly received and utilized by the appellant. Due to its inability to receive payment for the already exported goods, the exporter, thereafter cancelled its plan to send more consignments of the goods to the appellant. Hence the appellant filed this suit in the lower court against the Respondent.

Pleadings were subsequent ordered, filed and exchanged but subsequently subjected to amendments by the parties. The appellants final pleading was the Amended Statement of Claim dated 20-1-97 and filed on 21/1/97. For the Respondent, it is the further Amended Statement of defence dated 11-3-97.

At the trial which commenced on 6-3-99 both parties called one witness each. The appellant tendered 15 documentary exhibits while the respondent tendered 2 in evidence. In her judgment delivered on 10-2-2002, by R.N. Ujeke C.J. (as he then was) the appellant’s claim was dismissed.

Being dissatisfied and aggrieved by the outcome, a notice of appeal was filed on 10-5-2002 and it contains four grounds of appeal. Subsequently and in compliance with Rules of this court the parties filed and exchanged briefs of argument.

The appellant’s brief of argument settled by S.A. Akorede-Lawal Esq. was dated and filed on 11-1-11 but deemed properly filed on 25-2-13. The Respondent’s brief settled by F.O. Fagbohungbe Esq. was date 2nd filed on 28-9-2009 but deemed properly filed on 25-2-2013.

At the hearing of the appeal on 18-9-13 counsel for both parties adopted and relied on their respective briefs of argument. But not before the Respondent’s counsel moved his notice of preliminary objection dated 13-9-2013 and filed on 16/9/13. The grounds for the objection are as follows:-
1. Issue No 4 formulated and argued by the appellant in its brief of argument was not distilled from any grounds of appeal as contained in the Amended Notice of Appeal.
2. Issue No 4 formulated and argued by the appellant in His brief of argument does not relate to ground 3 of the amended Notice of Appeal.

Argument in support of the preliminary objection was incorporated into the Respondents brief of argument, particularly at pages 4 and 5. Wherein it was submitted that the issue for determination must relate to and arise from the grounds of appeal filed by the appellant and that any issue that is not distilled from the grounds of appeal is incompetent and must be struck out.

Learned counsel cited in support the following authorities:- GODWIN VS. CAC (1998) NWLR (PT 584) 162 at 174; CARLFN (NIG) LTD VS UNIVERSITY OF JOS & ANOR (1994) 1 NWLR (PT 323) 631 and AGWUNEDU & ORS VS ONWUMERE (1994) 1 NWLR (PT 321) 375.

The appellant’s counsel, in his reply submitted that issue 4 of the Appellant’s brief of argument was formulated from Ground 3 of the Amended Notice of Appeal. He added that the particulars of error under ground 3 buttress the complaint of the appellant and gave the true nature of the particulars of errors in law from which issue No 4 emanated from. Learned counsel further referred to Order 6 Rule 2(3) of the Court of Appeals Rules 2007 vis-a-vis the amended notice of Appeal to contend that issue No 4 flows from ground 3 of the Amended Notice of Appeal.

The contention of learned counsel for the Respondent is that issue No 4 in the appellant’s brief was not distilled from any of the grounds of appeal and as such should be struck out. For the appellant’s counsel, the said issue No 4 arose from ground 3 of the Amended Notice of Appeal and is therefore competent.
Ground 3 of the appellant’s Amended Notice of Appeal dated 3-4-3009 reads thus:
“The learned Trial judge erred in law when she held that the respondent cannot therefore be held liable for breach of Contract to the appellant with whom upon high authorities it had no specific collateral contract”

PARTICULARS OF ERROR
(a) The learned trial judge, give (sic) no consideration to the fact that the Respondent’s witness admitted at the trial that the Respondent collected commission from the Appellant specifically for the Remittance of foreign exchange to the appellant’s Supplier in Hong Kong”.

(b) The learned trial judge gave no consideration to the effect of the payment of commission by the appellant to the Respondent.”

The said issue No 4 in contention reads as follows:-

“Whether or not the Plaintiff’s case is distinguishable from the case of CENTRAL BANK OF NIGERIA VS. MAN EXPORT S.A. & ORS (1987) NWLR (PT 47) 86 on which the learned trial judge relied in reaching her decision?

I have carefully and wholesomely perused the ground of appeal and even the particulars of error vis-a-vis issue No 4 in the appellant’s brief of argument which no doubt speaks for itself and I fail to find any nexus between the two. In other words the said issue No 4 cannot correctly be said to have been distilled from ground 3 of the Amended Notice of Appeal or any of the other grounds of appeal. Issues for determination are supposed to be distilled from the grounds of appeal filed by an appellant and not to be raised at large, failing which it will be discountenance or struck out. See AMADI VS NNPC (2000) 10 NWLR (PT 674) 76 and ABI VS C.B.N. (2012) 3 NWLR (PT.1286) 1 at 47. In the circumstance, the Preliminary objection is hereby upheld. The appellant’s issue No 4 having not been distilled from any ground of appeal is hereby struck out and the argument in support thereof is hereby discountenanced.

On the Main appeal, the appellant had formulated four issues for determination as follows:-
(1) Whether or not apart from the general Banker/customer relationship, there was a specific collateral contract for the remittance of foreign Exchange by the defendant/Respondent to the Appellant’s supplier in Hong Kong?
(2) Whether or not having regard to the totality of the evidence placed before the Honourable court there was a breach of contract to remit foreign exchange by the Defendant/Respondent to the Plaintiff/appellant’s supplier in Hong Kong?
(3) Whether the plaintiff/appellant has locus standi to canvass for the return of the Naira Equivalent deposited with the defendant/Respondent?
(4) Whether or not the plaintiff’s case is distinguishable from the case of CENTRAL BANK OF NIGERIA VS MAN EXPORT S.A. & ORS (1987) NWLR (PT.47) 86 on which the learned trial judge relied in reaching her decision?

Having earlier on struck out the appellants issue No 4 what is left to be considered in this appeal are issues No 1 to 3.
For the Respondent, three issues were formulated for determination as follows:-
(1) Whether the Respondent was negligent in the way and manner it handled the foreign exchange transaction of the Appellant.

(2) Whether the lower court was right when it held that there was no contract between the Appellant and the Respondent under the Bills for collection for which the Respondent could be held liable.

(3) Whether the Appellant has locus standi to by claim to the sum of fourteen thousand naira (N14,000) being the value of the goods collected by it.

The three issue left to be canvassed by the appellants are substantially similar in content to those raised in the Respondent’s brief of argument but I will adopt the appellant’s three issues in the consideration of this appeal.

ISSUE NO 1

Dwelling on this issue, learned counsel for the appellant submitted that the Respondent did enter into a collateral contract with the appellant when it accepted commission from the appellant’s suppliers in Hong Kong. He added that the appellant’s case was that because of the Respondent’s failure to respond to CBN’s queries on its three applications, coupled with its failure to offer timely professional advice on the provisions of second tier foreign exchange Decree, the appellant suffered humiliation of the cancellation of the shipment of the remaining 8 lots of goods awaiting shipment. And having fulfilled it’s obligation by paying to the respondent what it was required to pay, owing to the negligence on the part of the respondent in its foreign exchange allocation applications however, it was subjected to the damages it enumerated. Learned counsel thus submitted that there exists a valid and enforceable contract between the appellant and the Respondent for the remittance of foreign exchange, the breach of which was occasioned due to the negligent handling of the appellant’s 3 applications for foreign exchange allocation. He relied on CCB VS MBAKWE (2002) 7 NWLR (PT 765) 80.

Arguing in response, in their issue No 2, learned counsel for the Respondent submitted that there is no doubt that the relationship between the appellant and the respondent is that of Banker and customer which basically is contractual. But apart from this general contractual relationship, the respondent had no specific collateral contract with the appellant with regard to the remittance of foreign exchange to the exporter, Linton Industrial Trading Company of Hong Kong. Rather the duty of the Respondent under the bills for collection transaction is to transmit foreign exchange to Linton Industrial Company Limited Hong Kong upon release of such by the Central Bank of Nigeria.

Learned counsel added that the Respondent did all within its power to secure the release of the foreign exchange by the Central Bank of Nigeria but to no avail and as such is not in breach of the general contractual relationship it had with the appellant.

Furthermore, he argued, the query issued by the Central Bank of Nigeria was done simultaneously with the certificate of rejection as the two were issued together through a letter dated 29/9/84 and admitted as Exhibit R- R6 and as a result, the Respondent had no opportunity to answer the query before the rejection. It was learned counsel’s further submission that there was no breach of contract between it and the exporter because there was no foreign exchange to remit, same having been refused by the Central Bank of Nigeria who has the sole authority to allocate it to applicant.

The Banker’s duty to exercise reasonable care and skill stretches over the whole range of banking business within the ambit of the contract with the customer. Consequently, this duty applies to interpreting, ascertaining and acting in accordance with the instruction of the customer. See NNB LTD VS ODIASE (1993) 8 NWLR (PT 310) 235, FIRST BANK OF NIGERIA LTD VS AFRICAN PETROLEUM LTD (1996) 4 NWLR (PT 443) 438; UBA VS FOLARIN (2003) 7 NWLR (PT 818) 18 and AGBANELO VS UNION BANK OF NIGERIA PLC (2004) 4 SC (PT 1) 243.

In a situation where Bank presents itself as being professionally competent and skilled to execute certain obligations inherent in a transaction but eventually shirks that responsibility, this constitutes a prima facie act of negligence having failed in the duty of care it primarily owed its customer. See AGBONMAGBE BANK LTD VS CFAO (1966) 1 SCNLR 367 and SGBN LTD VS ELEGANZA INDUSTRIES LTD (2004) 8 NWLR (PT 875) 432.

The bone of contention here is whether there exists a specific collateral contract for the remittance of foreign exchange by the respondent to the appellants supplier in Hong Kong and which the Respondent failed to fulfill.

From the parties pleadings and evidence in the lower court, there is no doubt that the appellant submitted three applications for allocation of foreign exchange to the Respondent for onward transmission to the Central Bank of Nigeria. It is also not in dispute that the applications were duly submitted by the Respondent and to the knowledge of the appellant. The parties are also ad idem on the fact that there was a long delay by the Central Bank in the release of the foreign exchange even after initial approval of the appellant’s application.

Problem arose when in 1986 a new Second Tier foreign Exchange Regime was introduced which requires all foreign exchange applicants to update their applications and this was done by the appellant through the Respondent. Unfortunately, what would have passed with ease under the old regime was found by the Central Bank of Nigeria (through the Chase Manhattan Bank) to have had some shortcomings having not gone through preshipment inspection and the appellants applications were queried and rejected.

Now collateral contract is defined as a side agreement that relates to a contract, which if unintergrated, can be supplemented by evidence of the side agreement; an agreement made before or at the same time as, but separately from another contract. See BLACK’s LAW DICTIONARY 9th Edition at page 1809.

The learned trial judge in his judgment at page 160 of the record held inter alia as follows:-
“The Defendant cannot therefore and thereby be held liable for breach of contract to the plaintiff with whom upon the high judicial authorities supra, it had no specific collateral contract in that regard. His duty was (sic) to the Buyer was to transmit foreign exchange upon release by CBN, which never happened.”

In the light of the definition of a collateral contract herein before given, I find it difficult to fault the reasoning of the lower court in that regard. The transaction between the appellant and the Respondent upon which a commission was paid to the latter was to help transmit the three applications for foreign exchange to the Central Bank on behalf of the appellant and upon approval and release of same, to remit it to the exporter (Linton Industrial Trading Co. Ltd, Hong Kong). Hence the receipt of the naira equivalent of $19,530 by the Respondent from the appellant and deposit of same in a suspense account. The appellant having collected from the respondent, the shipping documents of the imported goods.

In this regard I see nothing in the transaction to justify the invocation of the nomenclature “collateral contract” given the fact that the respondent’s mandate was direct and positive and there is no evidence of any side agreement between the parties. This is however without prejudice to the normal duty of care expected of the respondent in a normal Banker/customer relationship. Whether there was a breach of this duty shall be addressed when I consider issue No 2.

As regards this issue No 1, it is hereby resolved against the appellant.

ISSUE NO 2
Dwelling on this issue learned counsel for the appellant after a review of the evidence of Dw1 raised the question whether the respondent was not under obligation to adequately represent to the Central Bank of Nigeria that the appellant’s three applications were for goods below the value of N5000 and were as such exempted from S.G.S. inspection.

He submitted that the Dw1. under cross examination admitted that the Respondent did nothing to address the inadvertent queries raised by the Central Bank on the three applications but only passed it on to the appellant.

Learned counsel contended that failure of the Respondent to respond to the Central Bank queries raised in respect of the appellant’s three applications for non compliance with the S.G.S. inspection amounts to gross negligence and a breach of the Respondent’s contractual duty to source foreign exchange and remit same to the appellant’s supplier in Hong Kong. He relied on AFRICAN CONTINENTAL BANK PLC VS UZOR BROTHERS (NIG) LTD (1997) 6 NWLR (PT 510) 692 and CCB (NIG) LTD VS MBAKWE (2002) 7 NWLR (PT 765) 158.

Furthermore, learned counsel submitted that the Respondent was under contractual obligation to acquaint the appellant with the provisions of the Second Tier Foreign Exchange Market which allows the purchase and remittance of foreign Exchange from Nigeria without prior approval of the minister of Finance or the Central Bank. But it failed or neglected to offer such professional advice which would have afforded the appellant an alternative means of remitting to it’s supplier the sum of US$19,530 and save the shipment of the remaining 8 lots of goods from cancellation and subsequent damage suffered by the appellant. He then urged this court to hold the Respondent liable in negligence and breach of contract to the appellant.

Responding on this issue, learned counsel for the Respondent submitted that when the Central Bank rejected the applications, there was nothing else the respondent could do other than to forward the certificates of rejection to the appellant. He referred to the Exchange Control Act 1962 to contend that by its provisions, it is the prerogative of the Central Bank of Nigeria to allocate foreign exchange to would be applicants and the Respondent could not challenge the Central Bank on the matter. Learned counsel referred to the case of CENTRAL BANK OF NIGERIA VS MAN EXPORT SA. & ORS. (1987) 1 NWLR (PT 47) 86 where it was held that there was no statute which makes it obligatory for the Central Bank of Nigeria to furnish foreign exchange to any person whether corporate or incorporated.

On the argument by appellants counsel, that given the circumstance of rejection of the applications, the respondent had an obligation to protest to the Central Bank by stating that the value of the goods involved were below N5000 and as such exempted from S.G.S. inspection, Learned counsel for the Respondent contended that the argument must fail given the circumstances in which the applications were rejected.

Now the transaction in question, requires Linton Industrial Trading Company Ltd Hong Kong (the exporter) to supply three lots of Watch components to the appellant (the importer) and to dispatch the relevant documents through its own bank in Hong Kong i.e. (the collecting bank) to the Respondent (the Remitting bank). The relevant shipping documents were forwarded by the respondent to the appellant for the clearing of the goods. Thereafter the appellant submitted its three applications for foreign exchange (Form Ms) to the Respondent who then applied on its behalf to the Central Bank of Nigeria for allocation of foreign exchange to cover the cost of the imported goods with a view to remitting same to the exporter through its bank in Hong Kong. The said Form Ms (Exhibits A – A2) duly submitted by the Respondent were received by the Central Bank which accepted same vide Exhibit Q (Allocation Schedule No: M (NBN) DP84/404 dated 7/8/84.

However, inspite of the acceptance and approval for allocation of foreign exchange, the Central Bank did not eventually release the money for onward transmission to the exporter. This scenario lingered till 1986 when a new foreign exchange guidelines was introduced by the Government of Nigeria wherein the Central Bank of Nigeria sent ‘claim terms’ Exhibits B – B2 to the Appellant and the exporter for completion and forwarding through the Respondent to the Chase Manhattan Bank, New York (the accredited Representative of the Central Bank of Nigeria)

Unfortunately however, the Chase Manhattan Bank issued a Certificate (Exhibit R – R6) showing that the three applications for foreign exchange were rejected by the central Bank for “SGS querying.” This development was said to have been communicated to the appellant and the Exporter by the Respondent who contended that there was nothing else to do (after the rejection), than to forward the certificate of rejection to them.

From the scenario detailed above, can it be said that there was a breach of contract to remit foreign exchange by the Respondent to the Hong Kong.?

In the instant case, no written contract or agreement was presented in evidence detailing the terms of contract if any as regards the scope or extent of responsibility to be borne by either party. However, in the absence of an express agreement between the parties, an agreement regulating the relationship of Banker and customer can be implied from the ordinary course of business between them. See ANGYU VS MALAMI (1992) 9 NWLR (PT 264) 242.

From the pleadings and evidence adduced during the trial, there seem however, no to be any sign of tardiness, negligence on shirking of duty of care on the part of the respondent throughout the transaction. The evidence of Dw1 which was very clear, educative, succinct and uncontradicted is of great assistance. His testimony at pages 77 to 78 of the record is relevant here and it reads thus:-
QUESTION: Look at Exh Q. what is its particular importance

ANSWER: This application was the application designed by CBN for all Banks (commercial and Merchant) applying for foreign Exchange Allocation on behalf of their customer.

When CBN receives this application with all the relevant documents the applications will be checked by CBN and if accepted, it will be indicated on the Application; and this is an indication that CBN will grant foreign exchange Allocation to the Applicant – Bank.

The CBN will retain those document and give a copy, the accepted applicant on schedule to the Bank that submitted it. But where the CBN rejects it a rejection Certificate wilt be issued and all documents submitted will be returned to the Bank that submitted it.

That is the importance of the Application schedule.

QUESTION: In this case, was the Application accepted or rejected.

ANSWER: This applications was checked and accepted with a reference No NBN/002 of E/3/84 by CBN. It was stamped checked and accepted; an indication that foreign exchange allocation would be given to the Application.

QUESTION: Did the NBN do all that was expected of it under this kind of transaction.

ANSWER: Yes, initially, that was what was expected of the Bank to apply for foreign exchange. And we complied with it.

QUESTION: Was foreign exchange allocated by CBN

Answer: The foreign exchange that was allocated was not eventually released by CBN because as at that time, this application fell within the period when the country had foreign exchange problem. Then CBN released this foreign exchange allocations on preferential basis, as it was the prerogative of CBN to do so.

QUESTION: If CBN does not release after allocation, what happens

ANSWER: Actually, not only for this application, but for all other applications we submitted awaiting foreign exchange allocation, we continued to check with CBN to see if the foreign exchange will be released to their Beneficiary customers. They told us that the beneficiary were mounting pressure for the payment. And we wrote to the beneficiary to tell them this position of their applications. We even sent a Telex that the applications have been granted cover but the foreign exchange allocation were yet to be released by CBN.

Question: Have a look at Exhibit K and H. Are they the letter and telex you tell about.

ANSWER: Yes, Exhibit K is one of the letters and Exhibit H is our Telex.

QUESTION: What followed thereafter

ANSWER: That was the position until there was a new foreign exchange guidelines of 26/9/86 in within the second Tier foreign exchange Market was started (FEM) CBN issued a circular that at Banks that have applications awaiting foreign exchange release should come forward to lay claims to them.

On two occasions, we quickly presented those application to the CBN.

Question: Was the customer here aware of your application.

ANSWER: They were aware. We used a letter to send the application to CBN.

QUESTION: Have a look at EXH E & F

ANSWER: Yes EXHIBITS E AND F are the 2 letters we sent to the CBN and were duly received by CBN.

His testimony under cross examination went thus:
Q: Look at Exhibits R – R6. There is an inscription “SGS Query”, what does it mean.

A: The ‘SGS Query” then between my and Hong Kong SGS was the inspecting agent it was their responsibility to inspect all goods to be shipped either to us from both countries, inspecting as to both the quality and quantity of these goods. Thereby preventing over invoicing. “SGS Query” Therefore means “inspection against query”, but is that when these goods were brought into this country, they should have been subjected to “pre-inspection”.

Q. Before these goods were shipped into this country, were this goods subjected to Pre-Shipment inspections.

A: What transpired as at the time we know very well that any goods below N5000 will not be inspected and that was why we collected this. Application from the Applicant and passed them on to the CBN. CBN accepted the applications and they were not rejected. We were not aware of this rejected until when the CBN rejected the application.

Q: When you became aware of this situation, what steps did you take to alert the CBN of this irregularity.

A: This transaction was concluded after the rejection for them there was nothing else we could do. We must had to pass the thing over to the customer

Q: You informed the customer of the irregularity by EXH G.

A: Yes. (Reads EXH G)

This was a letter from Linton Hong Kong, Through us – (Exemption from SGS inspect on)

Q: What do you do in response to EXH G. – EXH G1

A: This letter was not to us. It was to CBN. Hong passed through us. Their reaction should be from CBN and that would be to allocate forex.

Q: When Plaintiffs applied for foreign exchange they paid you commission.

A: Yes. We should receive our commission. We are profit oriented.

Q: So you acted as agent to the Plaintiff.

A: Yes. We acted as agent.

Q: As agent you were expected to do your job diligently and efficiently.

A: Yes. As an agent, we have diligently efficiently and indeed effectively carried out our job. We did all we could do. Not only that, we used our moral persuasion to put pressure on CBN to release the forex but all to no avail.

Q: I put it to you that you did not perform your duty efficiently and diligently. Because you did not communicate the irregularity to the CBN

A: We did all we could do efficiently and effectively. We even asked them to write to CBN through us.

Linton is one of our long-standing customers and we could not toy with their applications. Indeed, these were not the only application they had with us.

Furthermore, Exhibits E and F are ‘relevant documents forwarding the appellants three applications for foreign exchange by the respondent to the Central Bank of Nigeria pursuant to the Trade Debut Refinancing Circular of 19-1-84.

Exhibit ‘H’ is a Telex message sent by the Respondent to the exporter’s bank in Hong Kong informing it of the receipt of foreign exchange cover totaling 19,530 US Dollars from the Central Bank and that the said sum will be remitted to it when the Central Bank releases the relevant foreign exchange.

Exhibit J is another letter from the Respondent to the Exporters Bank reassuring it of the remittance of the relevant sum in no distant future.

Exhibit K dated 24/9/84 and written by the Respondent to the exporters representative in Hong Kong is quite illuminating. Reproduced below is the body of the letter. It reads:
“We write to acknowledge receipt of your telex message of the above quoted references and explain our position regarding this matter.
For your information, we do not handle the transaction of the remittance as you claimed. We act as clearing house between our customer here in Nigeria (i.e.) the importer and your client in Hong Kong (the exporter). Already we have confirmed to your client that the importer has deposited local currency and that we have processed all relevant documents to the Central Bank of Nigeria for foreign Exchange Allocations.
The Central Bank of Nigeria have accepted the documents (i.e.) the application has received foreign exchange cover but foreign exchange Allocation has not been released.
Up till the time of writing, the Central Bank of Nigeria have not released (sic) said Foreign Exchange Allocations.
Therefore, no remittance could be made without release of Foreign Exchange Allocations. We shall forward proceeds of the collection to your client as soon as the Central Bank of Nigeria releases Foreign Exchange Allocation.

Yours faithfully

Signed
For National Bank of (Nig) Ltd”

From the manifest effort of the Respondent with regard to the whole transaction, it cannot by any means be concluded that it did not exercise due diligence in its dealings on behalf of the appellant or the exporter. In this regard the learned trial judge at page 160 of the record held thus:-
“I find as a fact that the defendant did everything within its power to get foreign exchange released but all to no avail. The defendant cannot therefore be held liable for breach of contract to the plaintiff with whom upon the high judicial authorities supra it had no specific collateral contract in that regard. His duty was to the buyer to transmit foreign exchange upon release by the Central Bank of Nigeria which never happened.”
I entirely agree with the findings of the learned trial judge. I see the whole event as a case of the appellant trying to make a scape goat of the Respondent on a matter beyond its control. The real ball is in the court of the Central Bank of Nigeria who has the final say on the issue of foreign exchange allocation. See CENTRAL BANK OF NIGERIA VS. MAN EXPORTER S.A. supra.
From the foregoing, this issue No. 2 is hereby resolved against the appellant.

ISSUE NO 3
That is whether the appellant has the locus standi to canvass for the return of the Naira equivalent deposited with the Respondent? Herein, it was submitted by the appellant’s counsel that even when it is agreed between buyer and seller that payment should be made by furnishing of a documentary credit, the buyer can still be liable to pay for the goods on the default of the banker. He cited A.C.B. LTD VS UZOR BROS (NIG) LTD. (1997) 6 NWLR (PT 510) 692.

Also referring to BENJAMIN’s SALE OF GOODS 1st EDITION (2046). He added that the interest of the buyer is to ensure that the payments reach the hand of the seller. Learned Counsel further submitted that, with the Respondent’s default in remitting the foreign exchange, the appellant remains liable in payment to its supplier in Hong Kong. Accordingly, the appellant has the locus standi to demand for US$19,530 or the Naira equivalent so as to ensure the remittance of the said sum to its supplier in Hong Kong.

He added that the supplier or its bankers (the issuing bank) could not sue on the remittance because of lack of privity of contract between it and the appellant who had a binding and enforceable contract with the Respondent for the transmission of the money to Hong Kong as held in CCB (NIG) LTD VS. MBAKWE (2002) 7 NWLR (PT 765) 158.

Responding on this issue, learned counsel for the Respondent referred to the evidence of the DW1 at page 82 of the Record to submit that the Respondent holds the money in trust for the Exporter who is at liberty to deal directly with or appoint an agent to deal with the Respondent concerning the release of the sum or its equivalent. He added that the appellant having collected the goods turn around and seeks to collect the naira value deposited for the goods received from the exporter.

Learned counsel further contended that since 1986 when the Central Bank of Nigeria rejected the applications for foreign exchange and the rejection communicated to Linton Industrial Trading Company Ltd, Hong Kong, the exporter ceased to have any further dealings with the appellant and there is no proof that the exporter instructed the appellant to institute any action in accordance with International Commercial Practice. He referred to ABCOS (NIG) LTD VS. KWPT LTD (1987) 4 NWLR (PT 67) 894 and ACB LTD VS. UZOR & BROS (NIG) LTD. supra.

He then concluded that by the above authorities, it can be deduced that the appellant has no further right to the naira value deposited with the Respondent for onward remittance to the exporter as proceeds of the three lots of watches component already received by the appellant.

There is no disputing that fact that the appellant received from Linton Industrial Trading Company Ltd Hong Kong (the exporter) the three lots of C K D watch components being the goods involved in the Bills for collection transaction through the Respondent.

After collection of the shipping documents of the goods, from the Respondent, the appellant deposited the sum of N14,655,57K with the Respondent being the naira value or equivalent of the goods which sum was placed in a Suspense account pending the allocation of foreign exchange by the Central bank for the benefit of the exporter. At this stage all dealings relating to the remittance of the agreed sum of the foreign exchange is between the Respondent and the exporter or its bank in Hong Kong.

The situation is made clearer with a perusal of Exhibit D, a letter from the Respondent to notify the appellant that the shipping documents have been sent to it by the exporter and for the appellant to arrange to pay the relevant amount for the goods plus bank charges before collecting the shipping documents. In other words, the appellant had duly collected the goods shipped to it by the exporter and has paid for the naira equivalent of the value of the said goods to the Respondent whose responsibility is to remit same to the exporter upon receipt of the foreign exchange from the Central Bank.

The evidence of the DW1 in this regard is quite instructive and it reads:-
Q: Has the Plaintiff collected the goods under this transactions

A: The plaintiff collected the goods. That was why he was able to submit to us the exchange control documents, which he used in applying to CBN for allocations of foreign exchange initially. But before we sent those applications to the CBN it was mandatory on us to collect the naira equivalent of those applications; and we collected N14,655.57 which we put in our suspense account paid Bills awaiting CBN cover on behalf of the beneficiary on LINTON INDUSTRIAL COMPANY, Hong Kong and when foreign exchange is eventually released by the CBN, then we make use of that cover with the naira in the suspense account.

Q: Who owns the naira equivalent in your possession, in essence.

A: It is Linton Industrial Company Hong Kong, the Beneficiary.

Q: Can the Plaintiffs herein lay claim to the money.

A: It cannot lay claim to the money unless with the consent of the beneficiary in Hong Kong on whose instructions we shall be acting now, through their Banker, commercial Bank Hong Kong.

Q: Having received the goods, the money is no longer that of the plaintiffs. Is that what you are saying.

A: Yes. That is what I am saying.

At pages 157 to 158 of the record, the learned trial judge after a review of the cases of ACB LTD VS. UZOR BROS (NIG) LTD supra and ABCOS (NIG) LTD VS. KWPT LTD supra. Held thus:-
“The defendant incurs no liability to the importer but may be regarded as an agent of the Bank of Hong Kong or the Exporter. Also the plaintiff having collected the goods cannot also turn around and seek to collect the naira value deposited against the documents.
The defendant holds that money in trust for the exporter, who is at liberty to deal directly with the defendant concerning its release, or with any person authorized in that behalf by the exporter.”

I am inclined to agree with the findings of the lower court, bearing in mind the fact that if the appellant has collected from the exporter the three lots of watch components being the goods involved in the Bills for collection transaction and has paid the naira equivalent of the value of the goods to the Respondent who kept it in a suspense account pending the remittance of the dollar value to the exporter.

To mind it will be wrong for the appellant to seek to claim the said sum of N14,655,57 being the value of the goods it had received to itself from the exporter. In the absence of any specific instruction or authorization to that effect by the exporter, the appellant lacks the locus to seek the refund of the said sum. It will amount to one eating his cake and having it.

This issue is accordingly resolved against the appellant.

On the whole, I hold that this appeal fails and it is hereby dismissed.

The judgment of the Federal High Court Lagos Division delivered by R. N. Ukeje CJ, on the 10th day of February, 2000 is hereby affirmed.

Parties to bear their cost.

CHINWE EUGENIA IYIZOBA, J.C.A.: I had the privilege of reading in advance the lead judgment just delivered by my learned brother SAMUEL CHUKWUDUMEBI OSEJI JCA. I agree with his reasons for dismissing the appeal. I adopt them as mine. The Respondent was under no obligation to return to the appellant the money he deposited for allocation of foreign exchange by the CBN as the foreign exchange was meant for his suppliers in Hong Kong. The Appellant had received the goods for which he deposited the foreign exchange and there was no evidence that he was authorized by his suppliers to retrieve the money.
I agree that the appeal lacks merit. I also dismiss it and I abide by the consequential orders in the, lead judgment including the order as to costs.

TIJJANI ABUBAKAR, J.C.A.: I had the privilege of reading in draft the lead Judgment just delivered by my learned brother Oseji JCA. I am in complete agreement with his reasoning and conclusion, he sufficiently covered the field, I therefore adopt the Judgment as my own.
The law is settled, that an issue for determination may derive its origin from at least one ground of appeal, otherwise it will be incompetent. The Appeal Court will be justified in outrightly disregarding such issue in the determination of the appeal.
Any issue for determination that fails the test of tracing its origin to appellants ground of appeal, must be struck out and any argument canvassed on such issue must be outrightly discountenanced. See: PATIENCE OMAOBEMI VS. GUINNESS NIGERIA LTD (1995) 2 NWLR PART 377, 266 – 267 where Uwais JSC (as he then was) said:
“It is now settled that any issue or issues for determination formulated in either the brief of argument of the appellant or the respondent, in any case, must be based on and be pertinent to the ground or grounds of appeal that give life to the appeal. If the issue or issues do not conform with the grounds of appeal, then they cannot stand for being irrelevant, it follows, that any argument in the brief based on the faulty issue for determination is equally irrelevant to the appeal, …….. See: also IBATOR VS. BARAKURO (2007) 9 NWLR (PART 1040) 475”.

The decision to uphold Respondents preliminary objection by my learned brother is premised on concrete grounds, I also order that issue number 4 be struck out and arguments canvassed thereon be discountenanced.
On the main appeal, I also resolve the three surviving issues against the appellant and consequently dismiss the appeal.
The Judgment of the Federal High Court delivered by R. N. Ukeje CJ, is also affirmed by me.
Parties shall bear their respective costs.
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Appearances

O.A. AderibigbeFor Appellant

AND

Opeyemi Usiola-Kuti with Anyalewa OnojaFor Respondent