DUTY OF CARE AND SKILL OWED BY A BANK TO ITS CUSTOMERS

CASE TITLE: DIAMOND BANK LIMITED v. MOCOK ONU NIGERIA LIMITED (2019) LPELR-46440(CA)

PRACTICE AREA: TORT OF NEGLIGENCE

LEAD JUDGMENT BY: MUHAMMED LAWAL SHUAIBU, J.C.A.

FACTS OF THE CASE 

This appeal is against the judgment of the High Court of Cross River State sitting in Calabar delivered on 7th July, 2017 in Suit No. HC/308/2016 by HON. JUSTICE EDEM ITA KOOFFREH.

By Writ of Summons and statement of claim filed on 22/6/2016, the plaintiff now respondent claimed against the appellant herein as follows: –
(a) N500 million on the footing of compensatory and exemplary damages for the defendant’s negligence by failing to transfer funds from the plaintiff’s account to Mathew Egbeji.
Upon being served with the originating processes, the defendant denied that it was negligent in carrying out the request of the claimant and therefore not liable. After exchange of pleadings the matter proceeded to trial with parties leading evidence and tendering documentary exhibits.

At the end of the trial, the Court below entered judgment against the defendant in the sum of N3,000,000.00 as compensation and exemplary damages for negligence. 

Dissatisfied with the judgment, the defendant, now appellant, filed this appeal in the Court of Appeal.

The respondent by a Notice of cross appeal filed on 27/9/2017 crossed appeal against part of the judgment.

ISSUES FOR DETERMINATION

The Court determined the appeal based on the following issues for determination:
1. Whether the learned trial judge was right when he held that the respondent disclosed a reasonable cause of action against the appellant and that the appellant breached a duty of care to the respondent.

2. Whether the finding of the learned trial judge that “the negligence in this case is not the failure of the transaction per se, but the failure of the transaction and the non-recrediting of the claimant’s account on time and also not informing of the failed transfer” is not self-contradictory.
   3. Whether the learned trial judge was right to have awarded against the appellant the sum of N3,000,000.00 (Three Million Naira) as compensation and exemplary damages for the defendant’s negligence.

DECISION OF THE COURT 

In the final analysis, the Court of Appeal held that the appeal succeeded in part and it was accordingly allowed. The judgment of the trial Court delivered on 7th July, 2017 was set aside. The cross-appeal was struck out.

RATIO DECIDENDI

• ACTION – CAUSE(S) OF ACTION – Definition of cause of action; How the Court determines reasonable cause of action
• BANKING LAW – DUTY OF A BANK – Whether a bank has the duty to exercise reasonable care and skill in carrying out its customer’s instructions
• TORT – NEGLIGENCE – Fundamental ingredients a plaintiff must prove to succeed in an action for negligence