⦿ CASE SUMMARY OF:
Citibank Nigeria Limited v. Gratis Properties Limited (2015) – CA
by NSA PaulPipAr
⦿ LITE HOLDING
The Court of Appeal dismissed the appeal by the Appellant. The Court of Appeal was of the holding that the respondent did not receive notice of the bank account closure effected by the Appellant. Further, such closure without notice to the respondent was injurious to the reputation of the respondent.
⦿AREA OF LAW
– Banking Law.
– Notice of bank account closure.
Citibank Nigeria Limited
Gratis Properties Limited
Court of Appeal
⦿ LEAD JUDGEMENT DELIVERED BY:
Amina Adamu Augie, J.C.A.
* FOR THE APPELLANT
– C. Ikwuazom, Esq.,
* FOR THE RESPONDENT
– R. O. Aladesanmi, Esq.,
⦿ FACT (as relating to the issues)
The Respondent maintained a current account at the Allen Avenue Branch of the Appellant, Ikeja, Lagos. On 16/4/2003, it issued a cheque in favour of “Integrated Environmental Control and Safety System” for N12,000.00 that was returned to the beneficiary with the inscription “Account Closed”.
Aggrieved by the Appellant’s action, which it believed had dented it’s credit and reputation, the Respondent instituted an action against the Appellant at the Lagos State High Court, wherein it claimed the following reliefs –
(a) A DECLARATION that the purported unilateral closure of the Plaintiff’s Account No. 0030949005 by the Defendant is unlawful and a breach of the Defendant’s duty to the Plaintiff.
(b) A DECLARATION that the inscription and publication of the words, “Account Closed” by the Defendant on the cheque dated 16/4/2003 and issued by the Plaintiff in favour of Integrated Environmental Control and Safety System, is defamatory of the Plaintiff.
(c) DAMAGES of the sum of N10 Million Naira for the defamation of the Plaintiff as a result of the Defendant’s said publication and failure and/or refusal to honour the Plaintiff’s said cheque referred to above.
(d) INTEREST at the rate of 7% per annum on the Judgment debt until the entire Judgment debt is liquidated.
In response, the Appellant filed a Statement of Defence and Counter-Claim, wherein it counter-claimed against the Respondent for the following –
a. A DECLARATION that the Plaintiff is bound to return to the Defendant with effect from 21/3/2003 all unused cheque leaves issued by the Defendant in its possession.
b. An ORDER that the Plaintiff do forthwith cause to be returned to the Defendant all unused cheque books, leaves and other materials relating to the extinguished Account No. 0030949005 in its possession.
The Respondent filed a – Reply to the Statement of Defence and Defence to the Counter-Claim, wherein it denied any allegation of indebtedness to the Appellant and insisted that it had sufficient credit to satisfy the said cheque.
The trial court after considering all the evidence tendered, gave judgement in favour of the plaintiff. The Trial Court stated that the plaintiff was not given sufficient notice before his bank account was closed; that the plaintiff’s bank account was closed unilaterally by the defendant.
The defendant being aggrieved have filed this appeal.
1. Whether having regard to the evidence adduced by both the Appellant and the Respondent at the Court below, the Court below did properly evaluate the evidence in reaching a decision to sustain the Respondent’s case and dismiss that of the Appellant?
2. Whether the Court below was right to have awarded the sum of N1,500.000.00 only, in favour of the Respondent as compensation for damages, which it alleged it suffered, as a result of the inscription by the Appellant of the words “Account Closed” on the Respondent’s cheque dated 16/4/2003?
⦿ RESOLUTION OF ISSUE(S)
[APPEAL: DISMISSED, WITH N30,000 AGAINST THE APPELLANT]
1. ISSUE 1 WAS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.
i. Yes, Exhibit D3 got to NIPOST, but there is nothing to show that PW1 or any staff of the Respondent had signed for and collected it from NIPOST. They are two different things; the mere fact that Exhibit D3 got to NIPOST, cannot be equated with proof that the Respondent did receive Exhibit D3. In the circumstances, the lower Court was right to reason as follows – “Exhibit D4 cannot be equated with evidence of dispatch by registered post. There must either be acknowledgment by the [Respondent] on Exhibit D3, or evidence of dispatch by registered post of Exhibit D3, that will convince the Court that Exhibit D3 was in truth and in fact received by the [Respondent]. He who assert must prove – the onus is on the [Appellant] to prove the receipt of Exhibit D3. Exhibit D4 is not a convincing documentary evidence to prove the receipt of Exhibit D3. Exhibit D3 was not delivered to the [Respondent] and therefore the [Respondent] did not receive Exhibit D3. The [Appellant] has, therefore, failed to prove the receipt of Exhibit D3”. I agree entirely.
ii. The Appellant provided “proof of receipt by the Post Office”, but failed to provide proof of the receipt of Exhibit D3 by the Respondent, and it would be taken that the Respondent was not aware that its Account had been closed, which inevitably led to the lower Court’s conclusion that – “The [Appellant]’s unilateral closure of [Respondent]’s account is unlawful and a breach of [Appellant]’s duty to the [Respondent]”.
2. ISSUE 2 WAS RESOLVED AGAINST THE APPELLANT BUT IN FAVOUR OF THE RESPONDENT.
i. The wrongful dishonour of a cheque in itself entitles the customer to damages for the breach of contract, and where he is a person in business, it is assumed that the dishonour has also caused damage to his reputation. The Respondent did not need to prove actual damage to its reputation, and the Appellant’s contention to the contrary is a misapprehension of the law.
⦿ SOME PROVISION(S)
⦿ RELEVANT CASE(S)
This Court in, Citibank v. Mr. Martins Ikediashi (2014) LPELR-22447 (CA), judgment delivered by Oseji, JCA, on 7/2/2014, held thus – “The clauses [7 & 8] in the agreement [Exhibit C] are quite clear and unambiguous in my assessment and have no need for any other meaning being read into them – Clause 7 confers on the Appellant the right to close the Respondent’s account, whether it is in debit or credit, provided the Appellant gives the Respondent at least seven days’ notice before such closure. Clause 8, which is more of a general provision, provides for any notice or letter addressed to the Respondent by the Appellant and sent through the post to any address supplied by the Respondent shall be considered as delivered to and received by him at the time it would be delivered in the ordinary course of post. This – means that any notice or letter sent through the post to the Respondent shall be deemed to have been delivered to him, in the case of ordinary postage upon being handed to him but where he has a mailbox, upon it being delivered therein. But where the means is by registered post, then upon such letter being signed for and collected from the postal officials in whose custody such letter or notice remains until it is so collected after identification. This is given the fact that such registered letter or items cannot be taken to have been delivered to or received by the addressee until it is retrieved or collected from the custody of the postal officials, who according to DW3, have such unclaimed letters or items destroyed after a given period in the absence of a recipient. In the circumstance, an addressee of a letter or notice cannot be taken to have received such letter or notice sent by Registered Post unless and until he signs for and collects it from the officials of the Post Office. This is in contrast to an unregistered letter, which is directly delivered to his Private Mail Bag or a private letter box”.
Balogun v. N.B.N. (supra), where Idigbe, JSC, also explained as follows – “Direct and/or natural damage arising from a breach of contract by a banker to honour the cheque of his customer apart, there is, however, also the serious likelihood of considerable danger to the reputation of a customer and generally to his business; (if he – the customer – is engaged in business). People generally, whether in business or not in business, do not deal with a person, whose cheques are not paid, although it is conceded that instances of disinclination to deal with such a person more readily abound in the field of business. As it is always extremely difficult to have an accurate estimate of the extent of damage under this “head”, it has, therefore, been laid down by a long line of cases beginning with – Marzetti v. Williams (1830) 1 B & Ad 415 that damages in such cases are at “large”, which is to say that – a jury may within reason make an award of any sum as they consider the circumstances of the breach of contract or dishonour of cheque warrant although there has been no proof of any actual loss (i.e. special damage) to the customer”. “Damages at large” is an award that there is no exact measurement for, such as pain and suffering – see USLegal.com where it is defined as follows – “Damages at large are compensation for other than for material loss. The term refers to general damages consisting of non-economic loss and exemplary damages in appropriate cases. They may include, among others, elements for loss of reputation, injured feelings, bad or good conduct by either party, or punishment, and therefore no precise amount can be determined. The amounts of damages at large are based on a subjective determination made on a case-by-case basis, after taking all the facts and circumstances involved into account”.
⦿ CASE(S) RELATED
⦿ NOTABLE DICTA
It is when it is the banker who decided to have the account of the customer closed that he must give the customer reasonable notice in case there are outstanding cheques to he cleared or some business the customer intends to conclude through the bank account. – Augie, JSC. Citibank v. Gratis (2015)
The position of the law is that a cause of action will accrue where the bank refuses to pay a customer’s cheque, when in fact he has to his credit at least an equivalent to that endorsed on the cheque he has issued on his account. The act of dishonouring a cheque in such circumstances, as I said earlier, constitutes a breach of contract for which the bank is liable in damages. – Augie, JSC. Citibank v. Gratis (2015)