Court Orders UBA, Access Bank, GTB, Stanbic IBTC To Pay Customer N23m Over Unauthorized Withdrawal
.. Says They Failed To Comply With CBN Regulation
Kemisola Oye
FOR negligent in account opening of their customers and failure to exercise the requisite duty of care, Justice Oluwatoyin Odusanya of a Lagos High Court sitting Ikeja has ordered four banks to pay Twenty-Three Million, Fifty Thousand, Two Hundred and Thirty-Seven Naira, Fifty-Four Kobo ((N23,050,237. 54) to a customer.
Justice Odusanya also awarded Three Million, Fifty Thousand, Two Hundred and Thirty-Seven Naira, Fifty-Four Kobo (N3,050,237.54) as special damages, Twenty Million Naira (N20,000,000) as general damages against the defendants in favour of a claimant, Dr (Mrs) Oluwatosin Sanu in a Fifty-Three Million Naira (N53,000,000.00) suit instituted against the banks.
The court ordered that while interest was ordered to be paid on unauthorized withdrawal of Three Million, Fifty Thousand, Two Hundred andbThirty-Seven Naira, Fifty-Nine Kobo (N3,050,237.59) at the prevailing bank rate from 6 September 2013 till 5 August 2014 and thereafter interest on the judgment sum at 10 per cent per annum from 2 February 2024 to the date of payment.
The court however declined the claimant’s request for exemplary damages in the sum of Twenty-Five Million (N25,000,000.00) for being unable to prove the offence of “wanton, cruel and insolent conduct” against the first to fourth defendants.
The court gave the award having established “negligence and lack of duty of care” against the four out of five banks listed as defendants in the suit marked ID/ADR/195/14.
The banks listed as defendants are: United Bank of Africa Plc, Diamond Bank of Nigeria Plc, Guaranty Trust Bank Plc, Access Bank Nigeria Plc and Stanbic IBTC Bank first to fifth defendants respectively.
Justice Odusanya gave the awards while delivering judgment on 2 February 2024 in the suit marked ID/ADR/195/14 filed by Dr (Mrs) Sanu through her lawyer, Prof. Akin Ibidapo-Obe.
The suit was commenced by a Writ of Summons dated 5 August 2014 in which the claimant who owns and runs a current and savings accounts at the Idi-Araba Branch of the 1st defendant bank stated that the two banking accounts had credit in the sum of N2,568,847.94 in the current account number and N477 379.55 in the savings account number of the 1st defendant.
According to the writ, the claimant travelled to the United States when she received an e-mail from one Mr Olatunbosun Alakija informing her that purported transactions were going on in her banking accounts and that the claimant promptly repudiated the purported transaction as she had her chequebook and ATM card with her on her trip to the USA.
The claimants was then informed by the 1st defendant that a total sum of N3,050,237 had been transferred to various purported beneficiary accounts through the bank’s internet banking transactions.
The claimant stated that the 1st defendant breached the duty of care owed to her and was negligent in the management of her current banking account when it facilitated such huge withdrawals without the claimant’s knowledge and authorization.
In their various amended statements of defence, the 1st to 5th defendants stated that they were not negligent in handling the account of the claimant and that they observed safe practice in handling the internet and electronic banking transaction activities on the account.
In her examination-in-chief, the claimant adopted both the written deposition dated 5 August 2014 which were admitted as evidence in her testimony before the court.
Other exhibits which were tendered and admitted included a letter dated 17 September 2013 admitted and marked Exhibit A: a letter dated 26 August 2013 admitted and marked Exhibit B”; Statement of account with the Certificate of Identification and marked Exhibit C1 and C2 “
While delivering judgment, Justice Odusanya, citing several decided cases, held that superior courts have held that “a bank has a duty under its contract with its customer to exercise care and skill in carrying out its part with regard to the operations contract with its customers. The duty to exercise reasonable care extends over the whole range of banking business within the contract customers.”
The judge said this duty applies to interpreting, ascertaining and in accordance with the instructions of the customer.
Justice Odusanya also held: “It is trite law that customers’ monies in the hands of the banker in the custody or under the control of the customer and such monies are property in the custody and control of the banker and payable when a request is made. Thus if anything happens to the money thereafter e.g. theft or unauthorized withdrawal, it is the banker and not the customer that absorbs the loss.
“In an action on negligence, for a plaintiff to succeed must in addition to pleading and establishing the particulars of negligence relied on, also state and establish the duty of care owed to him by the defendant facts upon which that duty is founded and the breach of that duty by the defendant.”
The judge further held: “It is also accepted in law that there can be no action in negligence unless there is damage. Negligence is only actionable if actual damage is proved. The gist of the action is damage and there is even no right of action for nominal damages. Negligence alone does not give a cause of action. Damage alone does not give a cause of action. The two must co-exist.
“The essential ingredients of actionable negligence include the existence of a duty to take care owed to the complainant by the defendant; failure to attain that standard of care prescribed by the law and damage suffered by the complainant, which must be connected with the breach of duty to take care.”
The judge said once these requirements are satisfied, the defendant in law will be held liable for negligence.
Justice Odusanya held that it has been established that 1st to 4th defendant banks owed a duty of care to the claimant and were negligent in the performance of their duties and that it follows that she is entitled to damages that she is claiming.
The judge held all the defendants failed to comply with the CBN Regulation and were negligent in account opening of their customers and failed to exercise the requisite duty of care.
The judge held they also failed to comply with what even a reasonable man and professional should do especially with respect to information obtained from customers’ addresses and identity cards.
She said the court however found that the case of negligence had not been established against the 5th defendant and consequently dismissed the case of the claimant against the 5th defendant bank accordingly:
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