ZENITH BANK v. AREO
(2021)LCN/15850(CA)
In The Court Of Appeal
(LAGOS JUDICIAL DIVISION)
On Thursday, March 04, 2021
CA/L/946/13
Before Our Lordships:
Ignatius Igwe Agube Justice of the Court of Appeal
Saidu Tanko Hussaini Justice of the Court of Appeal
Balkisu Bello Aliyu Justice of the Court of Appeal
Between
ZENITH BANK PLC APPELANT(S)
And
WILLIAMS AREO RESPONDENT(S)
RATIO:
THE TORT OF NEGLIGENCE
It is correct that case law is fully settled that what is required to succeed in a claim based on the tort of negligence primarily is to prove the existence of legal duty of care and to go further to establish that there was breach of such duty of care consequent which damage, injury or economic loss was suffered. If there was an incident, a Court of law considering a claim on negligence, must, while considering the evidence before it, ask and answer the question, whose conduct substantially caused the event. It is the entire circumstances of the matter that must be considered to answer this question. PER BALKISU BELLO ALIYU, J.C.A.
THE INGREDIENTS OF THE TORT OF NEGLIGENCE
Thus, a claimant of the tort of negligence must not only plead negligence, but must substantiate same with particulars of the conduct of the defendant that amounted to the allegation of the breach or failure of care owed him and the consequential damages he suffers as a result of that breach. He then must lead sufficient evidence directly or circumstantially that will prove that breach of the duty of care and the consequential damages he suffers as a result. This is the reason why this Court also held in the case of AKINYEMI DARE & ANOR. VS. CALEB FAGBAMILA (supra) (referred to by the Appellant) that the most fundamental of the three ingredients of the tort of negligence is duty of care owed to the claimant by the defendant. It is the bedrock and foundation of the claim, without which the claimant in a case on tort of negligence will fail. PER BALKISU BELLO ALIYU, J.C.A.
BALKISU BELLO ALIYU, J.C.A. (Delivering the Leading Judgment): This appeal is against the judgment of the High Court of Lagos State (trial Court) delivered on the 30th April 2013 in favour of the Respondent against the Appellant in the sum of N1, 235, 300 being the total sums of money withdrawn from the Respondent’s bank account with the Appellant. The Respondent commenced this suit as the plaintiff vide a writ of summons and an amended statement of claim filed on the 8th June 2011, copied in pages 138 to 145 of the record of appeal. The Respondent was a customer of the Appellant being his banker with which he maintained a current account No: 6021427276 at the Dugbe Branch, Ibadan, Oyo State. The Appellant issued the Respondent with Zenith EasyCard debit card, which allows him access to his account through the Appellant’s Automatic Teller Machines (ATM), Point-of-Sale Terminals (POS) and E-Commerce sites on the INTERSWITCH network. Upon receiving his debit card from the Appellant, the Respondent activated it and changed his default personal identification number (PIN) as instructed and began using it in the stated services, though he never used it at any e-commerce web site.
At the material time he received his debit card, the maximum withdrawal per day allowed on his card from ATM was NGN60, 000 at NGN20, 000 per transaction. The Respondent insisted that he kept his debit card safely in his wallet and never handed it to anyone nor misplaced or lost it. So also he guarded his PIN and was only known to him. As at 1st October 2008, the credit balance standing in his account with the Appellant was NGN1, 235, 953. 92.
The genesis of this case was that on the 2nd October 2008, without the knowledge, authority or consent of the Respondent, a total sum of NGN300, 000. 00 was illegally and fraudulently debited and withdrawn from the Claimant’s account in tranches of NGN20, 000. 00 each by unknown persons via ATM and the Appellant debited the Respondent’s account with the sum of NGN1,500.00 as ATM fees for the transaction. Also on the same date, a total of NGN906, 600. 00 was illegally and fraudulently debited from the Respondent’s account via POS. Again on the 7th October 2008 another sum of NGN17, 200. 00 was illegally and fraudulently debited and withdrawn from the Respondent’s account by unknown persons via ATM. He came to know of these transactions on the 9th October 2008 when he issued a cheque to one Queen Ofumela to withdraw some money from his account and the Appellant’s officers dishonoured the cheque. Upon enquiry, he was informed that as at 7th October 2008, the balance standing against his account with the Appellant was only NGN653. 92. He protested the alleged balance because he had over one million Naira in his account. He was given his statement of account where he discovered the above stated illegal and fraudulent transactions, which he did not make and he demanded a refund, but it was refused by the Appellant.
The Respondent’s case at the trial Court was that the Appellant was negligent in allowing the illegal and fraudulent withdrawals from his account without his mandate. He posited, among other particulars of negligence, that the pattern of withdrawals should have alerted the Appellant as a reasonable banker to decline the transactions especially at the POS terminals for a total sum of NGN906, 600.00. It was his case also before the trial Court that the debit card issued to him by the Appellant was a magnetic strip card that was not secure and could easily be cloned. That the banks were aware of this susceptibility of the Magnetic strip cards and in fact, the Appellant’s officials and staff have been reported to have been involved in fraudulent activities relating to ATM cards including the cloning of them and compromising PIN numbers of the bank customers. It was for this reason that the Central Bank of Nigeria (CBN) directed the banks to switch to the Chip and PIN technology which directives the Appellant failed to comply with.
Upon these facts, the Respondent prayed the trial Court for the following reliefs against the Appellant:
1. A DECALARATION that the withdrawals and payments totaling NGN1,225,300.00 from the claimant’s account with the Defendant’s Dugbe Branch, Ibadan, Oyo State on the 2nd and 7th of October 2008 respectively via Automated Teller Machines (ATM) and point of sale terminals (POS) by unknown persons were illegal, fraudulent and were done without the claimant’s mandate.
2. A DECLARATION that by allowing withdrawals and payments totaling NGN1, 225, 300. 00 from the claimant’s account with the Defendant’s Dugbe Branch, Ibadan, Oyo State on the 2nd and 7th of October 2008 respectively via Automated Teller Machines (ATM) and point of sale terminals (POS), the Defendant was negligent and in breach of its duty of care to the Claimant.
3. The sum of NGN1,225,300.00 being the credit balance standing against the Claimant’s account with the Defendant’s Dugbe Branch, Ibadan, Oyo State as at the 1st October 2008;
4. Interest on the said sum of N1, 225, 300. 00 at the rate of 21% per annum from the 8th day of October 2008 to the date of judgment and thereafter at the same rate until the whole amount is fully liquidated.
5. Further or other reliefs and costs.
The Appellant (Defendant before the trial Court) denied the claims of the Respondent vide its statement of defence filed on the 28th January 2010 (page 70 to 71 of the record of appeal). Its defence was that its debit cards services are safe and secure and it was not possible for withdrawals to be made on the Respondent’s account without his card or PIN number. The Appellant insisted that its debit cards are tamper proof and its ATM machines could not be manipulated within or without. That in this case either the Respondent withdrew the sums of money from his account or an unauthorized person withdrew the sums with his ATM card and PIN number, as such it incurred no liability in the Respondent’s negligent handling of his debit card. That, the Appellant as bankers did all what it was supposed to do in terms of technology deployment, security and staffing in respect of its card services and was not liable to the Respondent.
During the trial the Respondent testified as PW1 and tendered documentary exhibits including his debit card issued by the Appellant, which was admitted as exhibit ‘P3’. He also subpoenaed PW2 to tender his statement of account with the Appellant, which showed that there was a withdrawal of N20.000 15 times on the same day from the Respondent’s account. On its part, the Appellant called one witness its information technology auditor who testified as DW1, that the Respondent must have authorized the withdrawals from his account.
At the conclusion of the trial, the learned trial Judge after considering the evidence led and the final written addresses of counsel from both sides found and held that the Respondent proved its case of negligence against the Appellant and entered judgment in terms of the sum of NGN1, 225, 300 and interest on the sum at a rate of 15% per annum from the date of judgment till liquidation. The cost of N100, 000 was awarded to the Respondent against the Appellant. However, the trial Court refused to grant the Respondent’s claim of pre-judgment interest of 21% per annum on the ground that the Respondent failed to lead evidence to prove that claim.
The Appellant felt dissatisfied with the judgment of the trial Court and it filed notice of appeal against it on the 30th May 2013 reproduced in pages 349 to 352 of the record of appeal. It relied on four grounds of appeal to pray this Court to allow the appeal and set aside the judgment of the trial Court in its entirety. Having transmitted the record of appeal, the Appellant filed its brief of argument, settled by Lakan Awogbemila Esq. on the 18th December 2013, but deemed properly filed and served on the 5th February 2018. The Appellant distilled two issues for determination from the four grounds of appeal as follows:
1. Whether the trial Court was right to hold that the Appellant was in breach of its duty to the Respondent in respect of the transactions made on the 2nd and 7th day of October 2008 and therefore liable to refund the sum of N1, 225, 300. 00.
2. Whether the award of cost of N100, 000. 00 by the lower Court was justified.
The Respondent was also dissatisfied with the part of the trial Court’s judgment refusing his relief four (4) whereby he prayed for pre-judgment interest on the sums claimed at 21% per annum till judgment. He therefore filed a notice of cross-appeal against that part of the judgment on the 2nd June 2013 copied at page 357 to 359 of the record of appeal. He relied on a single ground of appeal to pray that the cross appeal be allowed. He filed a Respondent/Cross Appellant’s brief of argument, settled by Alfred Akinjo Esq. on the 7th March 2018.
In response to the main appeal, the Respondent/Cross-Appellant adopted the issues formulated by the Appellant for the determination of the appeal.
The appeal came up for hearing on the 9th December 2020 and the counsel on both sides adopted the parties’ brief of argument in support and in opposition to the appeal. Their submissions are considered and reviewed below:
APPELLANT’S SUBMISSIONS
On issue one, the learned Appellant’s counsel submitted that the trial Judge anchored its judgment on its finding that the evidence of the Respondent on the daily withdrawal limit of N60, 000.00 was more probable than the evidence of the Appellant. He submitted that the Respondent has the burden to establish that there was a contract or custom underpinning the N60, 000.00 daily limit and that when the transaction was taking place on the ATM on the 2nd October 2008, it was without the Respondent’s fault, and that the Respondent failed to discharge this burden of proof before the trial Court.
He submitted that at the stage of pleadings and evidence of the parties on the claim of daily withdrawal limit, they were on even keel and it is the party who would lose if no further evidence were adduced that has burden of adducing “further” evidence by virtue of Section 135 (2) of the Evidence Act 2011. That, the Respondent did not call such “further evidence” before the trial Court and this Court cannot take judicial notice of such assertion outside the pleadings and evidence led at the trial. He referred us to the testimonies of PW1 and PW2 on this issue in pages 325 to 327 of the record of appeal, urged us to hold that the Respondent did not do enough to establish in his pleadings that the agreed and allowable daily limit on exhibit P3 (ATM debit card) was N60, 000, as such he did not prove that fact on the balance of probability. Therefore, the Appellant cannot be held liable for negligence/breach of duty owed the Respondent.
The learned Appellant’s counsel urged the Court to note that evidence showed that the Respondent was in possession of his ATM debit card at all times material to this case, and he testified under cross-examination (in pages 309 to 310) that for money to be withdrawn from the ATM machine, a person must have the card and the PIN number and the only other means was through a cheque. The Appellant submitted that the only inescapable interpretation to be reached on the evidence of the Respondent is that he was responsible directly or indirectly for the withdrawals from his account. Learned Appellant’s counsel also relied on the evidence of DW1 in page 328 of the record of appeal to submit that to be cloned, the debit card must be available to the fraudster/cloner. The Court was therefore urged to hold that the withdrawals were made with the mandate of the Respondent and the Appellant cannot be held liable to him for breach of duty. He relied on the cases of AKINYEMI DARE & ANOR. VS. CALEB FAGBAMILA (2009) 14 NWLR (PT. 1160) 177 @ 194, A-F and U.L.G.C. VS. INWANG (2010) NWLR (PT. 1185) 529 AT 540, to submit that since no other person(s) can make withdrawals from the ATM machine except the holder of the debit card, the Respondent as the holder of the right to use the card has the duty to ensure the protection of that right.
If, however, this Court is inclined to hold that the withdrawals vide Appellant’s ATM to the tune of N300, 000 on the 28th October 2008 was unusual or ought to have been prevented by the Appellant, learned counsel urged us not to hold the Appellant liable for the POS transaction for the reasons that POS is a different platform compared to ATM. That, there is no transaction limit on POS and no evidence to the contrary was pleaded by the Respondent, and the parties agreed that the transactions were automated. Finally submitted that there was no evidence led to show that the ATM and POS transactions were done the same day. It was thus submitted that for the Respondent to seek declaration for the refund or repayment of the sum spent via POS by the Respondent or by persons enabled by him, amounts to an attempt by him to eat his cake and have it, an act of gold digging which the Court must be wary of. He relied on the case of G. K. F. I. (NIG.) LTD VS. NITEL PLC (2009) 15 NWLR (PT. 1164) 344 for support.
On issue two, the Appellant submitted that though the discretion of the trial Court to award cost is not in doubt, but that discretion must be exercised judicially and judiciously. Learned Appellant’s counsel quoted Order 49 Rule 1(1) of the High Court of Lagos State (Civil Procedure) Rules 2012 which provides that; “In fixing the amount of cost, the principle to be observed is that the party who is in the right is to be indemnified for the expenses to which he has been necessarily put in the course of the proceedings, as well as compensation for his time and effort in coming to Court….”
He however argued that the award of the N100, 000 to the Respondent as cost was excessive and the trial Court did not give any basis/reason for the award since there was no evidence led by the Respondent to support this humungous award to him. The filing fees for the claim of N1.2million was only N5000 and the two subpoenaed witnesses called by the Respondent bore their expenses. He submitted that the award of cost is not meant to be a bonus to the successful party and should not be awarded on sentiment. He relied on the case of OJIEGBE VS. UBANI (1961) 1 ALL NLR 277 in support and to urge the Court to invoke its powers under Section 16 of the Court of Appeal Act to review the cost awarded by the trial Court as we did in the case of OLUSANYA VS. OSINLEYE (2013) NWLR (PT. 1367) 148 on the basis that cost ought not be punitive or excessive. Conclusively, he urged the Court to allow this appeal and set aside the trial Court’s judgment upon the submissions made supra.
RESPONDENT/CROSS-APPELLANT SUBMISSIONS
On issue one, the learned counsel for the Respondent/cross Appellant submitted that it was not in contention at the trial Court that the relationship between the parties herein was banker/customer one. Neither was it in contention that the sums of NGN300, 000 was withdrawn vide ATM from the Respondent’s account and the Appellant further debited the Respondent with NGN1, 500 as ATM for the said transaction. On the same date, a total sum of NGN906, 600 was also debited from the Respondent’s cross-appellant’s account vide POS transaction and on the 7th October 2008 another sum of NGN17, 200 was debited from the Respondent’s account vide ATM. The issue of contention was whether the Appellant as banker of the Respondent was negligent in allowing the withdrawals from the accounts of the Respondent.
It was his contention that the Appellant as a banker owed the Respondent a duty of care and the law is sufficiently settled that the relationship between a banker and customer is contractual and the standard and duty of care and skill required from a banker to its customer is high vide the Apex Court’s decisions in the cases of U.B.A. VS. FOLARIN (2003) 7 NWLR (PT. 818) and U.B.N PLC VS. AJABULE (2011) 18 NWLR (PT. 1278) 152 and AGBANELO VS. UNION BANK OF NIG. LTD. (2000) 7 NWLR (PT. 666) 127 AT 243.
The Respondent/cross appellant conceded that having alleged negligence before the trial Court, it has the onus to prove it and in this case it has successfully discharged this burden by leading evidence on the daily ATM withdrawal limit of NGN60, 000 but the sum of NGN300, 000 was withdrawn on the same date vide ATM exceeding the daily limit. The learned trial Judge was therefore right when he held in page 344 of the record that the Appellant failed to sufficiently traverse the daily limit ATM withdrawals alleged by the Respondent. He argued that the burden of proof in civil cases is not static, but fluctuates as provided in Section 131 of the Evidence Act, relying on the case of EZEMBA VS. IBENEME (2004) 14 NWLR (PT. 894) 617; and that the Respondent has discharged this burden by credible evidence that was more probable than that of the Appellant. The Court was urged to so hold and affirm the finding of the trial Court in page 346 of the record of appeal.
In response to the argument of the Appellant regarding the daily ATM withdrawal limit, to the effect that the Respondent failed to prove that claim, the Respondent submitted that the Appellant merely denied the weighty averments regarding the daily limit ATM withdrawal. He submitted, on the authority of the cases of ODIBA VS. MUEMUE (1999) 6 S. C. (PT.I) 57 and UBA V. MUSTAPHA (2004) 1 NWLR (PT. 855) 443 at 480 B-C, that the law is settled that a fact averred must be properly denied by the opponent, and a mere denial will not qualify as proper traverse.
It was further submitted that the evidence of PW2 and DW1 showed that there was indeed a daily limit on ATM withdrawal but that was determined by the type of debit card a customer was issued with. The Respondent pleaded and testified on the daily limit ATM withdrawal on his card, thus the burden shifted to the Appellant to prove what the daily limit of ATM withdrawal was with regard to the debit card issued to him. It was the failure of the Appellant to provide this evidence that left the trial Court with no option but to accept the evidence of the Respondent on the issue.
In response to the argument of the Appellant that the Respondent has the duty to safeguard his debit card and the right to use it, Respondent referred to and relied on the book “Pen & Shea: Law relating to Domestic Banking” Volume 1, 2nd Edition, Chapter 15- “Cards and new technology” under the heading “liability for loss, theft and use without authorization, paragraph 15-039, the learned authors opined that; “Importantly, if it is asserted that the card holder allowed another person to use the card, or that the use occurred before the creditor was given notice, the onus of proof lies on the creditor not the card holder.” He urged the Court to hold that since the Appellant was the party that asserted at the trial Court that the Respondent allowed another person to use his ATM card and PIN to withdraw money from his account, the onus of proof lies on it as the issuer of the card to establish that fact and not on the Respondent. He relied for support on Section 135 of the Evidence Act and the case of UTB (NIG.) VS. OZOEMENA (2007) 3 NWLR (PT. 1022) 448 AT 491 F-H.
On issue two distilled from ground 5 of appeal, the Respondent submitted that it is the law that cost always follows event and it is solely awarded at the discretion of the Court, albeit judicially and judiciously. That the trial Court considered that the Respondent incurred a lot of cost in filing fees, solicitors’ fees etc. over the four years he prosecuted this case. The Court is therefore urged not to interfere with the award of cost made by the trial Court because the Appellant failed to show that the discretion of the trial Court in awarding the N100, 000 cost was not properly, judicially and judiciously exercised but merely stated that it was excessive. He relied on the cases of the COOMASSIE VS. TELL COMMUNICATIONS LTD (2003) 1 NWLR (PT.802) 551 at 566 and OLOKUNLADE VS. SAMUEL (2011) 17 NWLR (PT. 1276) 322 C-D to urge the Court to so hold and discountenance the case of OLUSANYA VS. OSINLEYE (supra) cited by the Appellant being inapplicable.
APPELLANT’S REPLY BRIEF
In response to the assertion of the Respondent that the lower Court was right to hold that the Appellant was in breach of duty of care and liable to refund the money, the Appellant submitted that the trial Court was wrong to consider both ATM withdrawal and POS transaction together when they are different and distinct. He submitted that the Respondent did not plead the limit on POS transaction neither did he provide evidence of the Appellant’s failure to monitor the system to show debits done on through POS. The Court was urged to discountenance the Respondent’s reliance on the book “Pen & Shea in Law Relating to Domestic Banking” Vol. 1 2nd Edition because the assertion therein is contrary to Section 135 of the Evidence Act 2011. The burden of proof is on the Respondent/Claimant who asserted.
RESOLUTION
The parties are in agreement on the issues arising for determination of the main appeal and I also agree with them and I adopt the Appellant’s issues to be my guide in the determination of the appeal.
ISSUE ONE
Under this issue, the Appellant questioned the trial Court’s decision, holding that it (Appellant) breached the duty of care owed to the Respondent in the transactions that gave rise to this appeal. In the case of N.P.A. VS. RAHMAN BROTHERS LTD (2010) LPELR-8962 (CA) this Court, per Gumel JCA held at pages 18-19, paragraphs E-B that:
It is correct that case law is fully settled that what is required to succeed in a claim based on the tort of negligence primarily is to prove the existence of legal duty of care and to go further to establish that there was breach of such duty of care consequent which damage, injury or economic loss was suffered. If there was an incident, a Court of law considering a claim on negligence, must, while considering the evidence before it, ask and answer the question, whose conduct substantially caused the event. It is the entire circumstances of the matter that must be considered to answer this question.
Also in the case of U.T.B. NIG. VS. OZOEMENA (SUPRA) cited by the Respondent, it was held at page 475, paragraph F-G per Oguntade J.S.C. that:
It ought generally to be borne in mind however that negligence is a question of fact not law, and each case must be decided in the light of its own facts…. It is also settled principle of law that in an action based on negligence, the plaintiff must show that the defendant owed him a duty of care and that he suffered damages in consequence of the defendant’s failure to care….
Thus, a claimant of the tort of negligence must not only plead negligence, but must substantiate same with particulars of the conduct of the defendant that amounted to the allegation of the breach or failure of care owed him and the consequential damages he suffers as a result of that breach. He then must lead sufficient evidence directly or circumstantially that will prove that breach of the duty of care and the consequential damages he suffers as a result. This is the reason why this Court also held in the case of AKINYEMI DARE & ANOR. VS. CALEB FAGBAMILA (supra) (referred to by the Appellant) that the most fundamental of the three ingredients of the tort of negligence is duty of care owed to the claimant by the defendant. It is the bedrock and foundation of the claim, without which the claimant in a case on tort of negligence will fail.
I have given ample consideration to the pleadings and evidence laid before the trial Court particularly, evidence of witnesses under cross-examination. The Appellant started his argument under this issue with the statement of law to the effect that the duty of the trial Court is to evaluate all the evidence adduced before it with a judicial perception and ascribe probative value to each material aspect of the evidence to arrive at its decision. Its argument was that as far as the state of pleadings were concerned, the two parties are “on an even keel” and it is a party who will lose if no further evidence is called that carried the burden of proof. To determine whether this argument is correct, I examined the pleadings of the parties on this particular complaint. In paragraph 8 of the Respondent amended statement of claim (page 139 of the record), he stated that:
8. The Claimant avers that maximum withdrawal per transaction at an Automated Teller Machine was NGN20, 000. 00 while the maximum amount the Claimant could withdraw in a day was NGN60, 000. 00 i.e. maximum of 3 transactions per day.
In paragraph 9 of the Respondent’s statement on oath, (contained in page 10 to 13 of the record of appeal), which he adopted as his evidence-in-chief as PW1 at the trial, he made the same averments as stated in his pleading supra.
In response to this pleading, the Appellant stated in paragraph 2 of its statement of defence copied at pages 70 to 71 of the record that: 2. Defendant denies the averments in paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 20, 21, 22 and 23 of the statement of claim.
The Appellant’s counsel was therefore not correct when he submitted that the parties were “on equal keel” on the dispute of daily allowable withdrawal on the debit card from the Appellant’s ATM. The Appellant merely denied the specific pleading of the Respondent on the issue. Equally, the Appellant’s marketing officer that the Respondent subpoenaed to testify and to produce the Respondent’s statement of account stated that there was indeed a daily limit withdrawal but it depended on the type of debit card issued by the Appellant. He however could not say the daily withdrawal limit on the Respondent’s debit card (exhibit P3).
I also examined the testimony of the Appellant’s witness (DW1). His statement on oath is copied in pages 73 to74 of the record and it is a replica of the Appellant’s statement of defence. His paragraph 3 is exactly the same word for word with paragraph 2 of the statement of defence reproduce supra, in which it merely made a general denial regarding a daily limit of N60, 000 in three transaction on the Respondent’s debit card. Under cross-examination, DW1, who worked with the IT department of the Appellant said he was “familiar with the Defendant ATM system and processes” (page 326 to 327 of the record), and admitted that; “there is a daily limit for ATM withdrawals”. Yet he could not say the limit of daily withdrawal on the Respondent’s debit card.
My observation of the pleadings and the evidence led before the trial Court is that while the Respondent was specific in its pleading and evidence with regards to the daily withdrawal limit on the debit card issued to him by the Appellant, the Appellant’s officers (PW2 and DW1) were evasive and developed selective amnesia when asked specifically on the daily limit on the Respondent’s ATM card which the Appellant issued to him. In fact, in his evidence, the Appellant’s DW1 stated in pages 327 to 328 of the record that:
The Defendant sets the ground rules for using the ATM cards. The system enforces that the customer should change the default pin. The system has its own security software features which allows the Bank to monitor the ATM to the extent that the system is configured if there is a need to do so…. The ATM has an onboard camera though not all the cameras are functional. Another type of camera is that mounted around the ATM. The camera may however not be functional. The issue of daily limits for withdrawal is a business decision not a security feature. There is a daily limits for withdrawals. It is difficult for one to tell on this card because it is a stripe card which has expired. I cannot tell the limit because they were changing from time to time…. (Underlining supplied by me).
The evidence of the DW1 supra confirmed without a doubt that the Appellant was in control of all the mechanisms for the use of the ATM card it issued. It controlled the withdrawals limit; it ensures security on the ATM by putting cameras, but, by its own admission, left the cameras unfunctional. With all these mechanisms under its control, yet, DW1 and PW2 could not say the daily limit on the Respondent’s ATM card. I believe the Appellant’s officers suffer selective amnesia on the daily withdrawal limits on the Respondent’s debit ATM card. They were not worthy of belief on this issue. The argument of the Appellant that the parties were on equal pedestal is incorrect and disregarded. The evidence of the Respondent far outweighed that of the Appellant at the trial Court on the issue of daily withdrawal limit.
It is for the above reasons that I approve and totally agree with the finding and the holding of the learned trial Judge that the Appellant breached the duty of care it owed the Respondent in respect of the ATM card as a result of which he suffered damages in economic loss of the money withdrawn from his account. Issue one is resolved against the Appellant.
ISSUE TWO
This issue is whether the award of cost of N100, 000. 00 by the lower Court was justified. The Appellant quoted Order 49 Rule 1(1) of the trial Court’s Rules whereby the trial Court was directed to indemnify a party found in the right for the expenses to which he has been necessarily put in the course of the proceedings as well as compensation for his time and effort for coming to Court. The Appellant’s contention under this issue is that though the trial Judge has the discretion supported by the Court’s Rules to award cost, but in this case the cost of the N100, 000 to the Respondent is excessive because the trial Court did not give any reason for the award, and there was no evidence on record to support what the Appellant described as a humungous amount to the Respondent.
It is observed that the provisions of Order 49 Rule 1(1) of the High Court of Lagos State Civil Procedure Rules that empowers the trial Court to award cost are in line with the Supreme Court’s decision in the case of HACO Vs. Brown (1973) LPELR-1347 (SC) where IRIKEFE, J.S.C. held at pages 8-9 of the report that:
Now it is settled law that costs normally follow the event, unless there are circumstances warranting the contrary. (See Order 62 Rule 3 Annual Practice 1969). The award of costs involves a judicial discretion which must be exercised on fixed principles, that is according to rules of reason and justice, not according to private opinion…. Similarly, the exercise of this discretion must not be affected by questions of benevolence or sympathy…. We are satisfied that there is abundant authority in support of the proposition that a successful party in an action, unless he misconducts himself, is entitled to costs as of right…. (Underlining supplied).
See also the case OLUSANYA VS. OSINLEYE (supra), referred to by the Appellant, and can also be found in (2013) LPELR-20641 (SC), where, ALAGOA, J.S.C. speaking for the Apex Court held at page 22-23 that:
Costs awarded are supposed to be compensatory to a successful party without being punitive to an unsuccessful party and costs that are awarded to serve as a deterrent to an unsuccessful party to prevent him from filing future claims of a particular kind are certainly punitive and a Court that awards such costs cannot be said to be exercising its discretion judiciously and judicially. The power to vary such an order on costs wrongly exercised by the High Court is vested in the Court of Appeal by Section 16 of the Court of Appeal Act and the Court of Appeal Rules….
The common denominator on the cases referred to supra is that the award of cost is at the discretion of the trial Court and an Appellate Court will not interfere with same unless it is shown that the trial Court did not exercise the discretion judicially and judiciously. This means that the Appellant has to do more than complain that the award was excessive, but must show that the award was also unmerited and perverse for the Appeal Court to interfere with it. Otherwise, the cost follows the event of success in the litigation as of right.
In this case, the Respondent sought for costs in relief 5 of the writ of summons, same as his paragraph (V) in the amended statement of claim. The trial Court correctly found and held that the Appellant was negligent in the duty of care owed the Respondent as a result of which he suffered loss of his funds in the account kept by the Appellant. In the circumstance, the Respondent is entitled to cost of prosecuting the case as of right, especially as he stated in paragraphs 16 to 20 of his statement on oath, the unsuccessful efforts he made to get a refund of his money from the Appellant through his solicitors and the filing of this suit on 28th July 2009 to 30th April 2013 when the judgment was delivered, a period of over four years. It is my view that the award of N100, 000 was not excessive and I so hold. Issue two is resolved against the Appellant.
Consequent to my resolving the two issues against the Appellant, this appeal fails and it is dismissed by me. The judgment of the trial Court delivered on the 30th April 2013 by Hon. Justice K. A. Jose (Mrs.) in respect of Suit NO: LD/1226/09 is affirmed by me. Cost of N100, 000. 00 (One hundred Thousand Naira) awarded to the Respondent against the Appellant.
CROSS APPEAL
The notice of cross appeal was filed on the 2nd July 2013 contained in pages 357 to 359 of the record of appeal. The Respondent/Cross-Appellant relied on a sole ground of appeal namely:
The learned trial Judge erred in law when she held thus:
“The fourth relief for interest on the sum of N1, 225, 300. 00 at the rate of 21% per annum from the 8th of October 2008 to the date of judgment and thereafter at the same rate until the whole amount is liquidated. This means that there is a claim for pre-judgment and post judgment interest. A claim for pre-judgment interest must be based on evidence. See Ekwunife V. Wayne (W/A) Ltd (1989) 5 NWLR (pt. 122). Here the Claimant did not lead any evidence in support of his claim for interest on the claimed N1, 225, 300. 00 from 8th October till the date of judgment, thus the Court cannot award same to him.”
In page 3 paragraph 3.2 of the Respondent/Cross-Appellant brief of argument, he raised a sole issue from the ground of appeal for the determination of the cross appeal as:
Whether the learned trial Judge was right when she refused to award the interest claimed by the Respondent/Cross-Appellant at the rate of 21% per annum from 8th day of October 2008 to the date of judgment.
The argument canvassed in support of this issue is contained under issue three in pages 9 to 11 of the said brief. He submitted that the trial Court should have followed the recent decision in the case of A. I. B. LTD VS. I.D.S. LTD (2012) 17 NWLR (PT. 1328) 1 instead of the case of EKWUNIFE VS. WAYNE (W/A) LTD (1989) 5 NWLR (PT. 122) it relied on to refuse the grant of pre-judgment interest to the cross appellant. Further submitted that the banker/customer relationship between the parties was purely commercial and the cross Appellant was deprived of the use of his money for a long time. The Court was urged to allow the cross appeal on the argument canvassed.
The Cross Respondent opposed the cross appeal and filed Cross Respondent’s brief on the 11th January 2019 wherein submitted that the position of the law remains that pre-judgment interest claims must be pleaded and proved for the Court to award it, relying on the case of A.G. FERRERO & CO. VS. HENKEL CHEMICAL (NIG.) LTD (2011) 13 NWLR (PT. 1265) and others in support. It was further argued that the case of A.I.B. VS. I.D.S LTD (supra) recommended by the Respondent in preference to the case of EKWUNIFE VS. WAYNE (W/A) LTD (supra) is actually an authority re-stating the law as enunciated in Ekwunife’s case to the effect that claims of pre-judgment interest must be specifically pleaded and evidence called to establish same.
It was further argued by the Cross Respondent that the transaction that constituted this suit was not purely a commercial transaction and the question of detaining the Cross Appellant’s money did not arise. We were referred to paragraph 23 of the Cross Appellant’s amended statement of claim where he claimed that the Cross Respondent breached its duty of care by allowing the fraudulent withdrawals of his money from its ATM and POS services. Further submitted that the Cross Appellant failed to establish effective legal challenge to the exercise of the discretion of the trial Court in refusing to award pre-judgment interest to him.
In resolving the cross appeal, I adopt the sole issue for determination, proposed by the Cross Appellant and agreed to by the Cross Respondent. In his brief, the Cross Appellant suggested that there was a conflict between the two Supreme Court’s decisions in Ekwunife’s and AIB ltd Cases, and that the trial Court ought to have followed the latest decision which was the case of AIB Ltd vs. IDS Ltd.
The case of Ekwunife Vs. Wayne (W/A) ltd was based on breach of contract of supply and laying of electricity underground cables. The claim was for payment of the contract sum, which was refused after the completion of the contract. The trial Court, the High Court of Plateau State entered judgment in favour of the Respondent for the contract sums and awarded interest on the said sum vide its Order 27 Rule 8 of its Rules from the date of the accrual of the cause of action. The Supreme Court interpreted the said Order 27 Rule 8 of the trial Court’s Rules and held that the interest on the judgment debt means interest awarded after the judgment was entered and not before. It held that the trial Court had no power to award pre-judgment interest unless such interest was contemplated by the parties and claimed as of right by the claimant. In that situation, the claimant must plead and call evidence to establish such entitlement, including the proper rate and the date from which the interest should accrue in the circumstances of the case must be established by evidence.
The case of A.I.B. Vs. I.D.S. LTD (supra) on the other hand was based on loan facility granted to a customer by its bank and the claim of interest on the said loan was based on the CBN policy guidelines, which the lending bank was bound to apply. The claim of interest was pleaded by the bank and evidence called at the trial to show the applicable interest on the loan and its variation from time to time. The Apex Court did not contradict its decision in Ekwunife Vs. Wayne (supra), rather it relied on that decision in page 49 paragraph E-F. The ratio decidendi in that case is contained in page 50 paragraph D-G, per ARIWOOLA, J.S.C. that:<br< p=”” style=”box-sizing: inherit; margin: 0px; padding: 0px;”></br<>
In the instant case, it is clear that Cross Respondent merely claimed the pre-judgment interest upon expiry of the contract and the facility was due for repayment, yet it failed to plead specifically and adduced credible evidence to establish such claim. In my view, the Plaintiff/Cross Respondent was not therefore entitled to any pre-judgment interest as awarded by the Court below….
There was therefore no conflict in the two decisions. The principle of law established by the Apex Court in the two cases remained that interest may be awarded to a claimant in two distinct circumstances; (a) as of right and (b) where the Court was statutorily conferred with the power to do so. A claim of interest as of right can only be awarded where the parties contemplate it in their agreement, as was the case in A.I. B’s case. In that scenario, it must be pleaded and proved by evidence.
I have examined the amended statement of claim of the Cross Appellant/Claimant contained in pages 138 to 145 of the record of appeal and I found that apart from the claim in relief (iv) for the pre-judgment interest, there were no facts stated in support of that relief. More so, I agree with the submissions of the Cross Respondent that the claim of the Cross Appellant was for negligence for failure of duty of care owed to him by his bankers on the ATM debit card issued to him. In the circumstance, I affirm a stamp of approval to the learned trial Judge’s holding in page 348 of the record that the Cross Appellant is not entitled to award of pre-judgment interest as of right, but only entitled to the award of post judgment interest because same was allowed by Order 35 Rule 6 of its Rules. I therefore resolve the lone issue against the Cross Appellant, to the resultant effect that there is no merit in the cross appeal and I dismiss it. I affirm the part of the judgment of the lower Court refusing the grant of Cross Appellant/Claimant’s relief IV. I make no order of cost.
IGNATIUS IGWE AGUBE, J.C.A.: I had the advantage of reading the draft of the Lead Judgment of my learned brother, HON. JUSTICE BALKISU BELLO ALIYU, JCA and I endorse the reasoning and conclusion that the Appellant’s Appeal lacks merit and same is hereby dismissed and that Relief (4) of the Cross-Appellant/Claimant in the Lower Court is granted.
SAIDU TANKO HUSSAINI, J.C.A.: I am privileged to have read in advance the lead judgment prepared and delivered by my Lord, Balkisu Bello Aliyu, JCA with whom I agree with the reasoning and conclusion both in the main appeal and the cross-appeal.
Appearances:
SOLALEKAN BADE JOHN,ESQ. WITH HIM, LILIAN OKOLOAGU,ESQ. For Appellant(s)
ALFRED AKINJO,ESQ. For Respondent(s)