BOTH STATE AND FEDERAL HIGH COURTS HAVE CONCURRENT JURISDICTION ON ISSUE OF BANKER/CUSTOMER RELATIONSHIP

CASE TITLE: ECOBANK V. ANCHORAGE LEISURES LTD & ORS (2018) LPELR-45125(SC)

PRACTICE AREA: BANKING

HEADING: BOTH STATE AND FEDERAL HIGH COURTS HAVE CONCURRENT JURISDICTION ON ISSUE OF BANKER/CUSTOMER RELATIONSHIP

LEAD JUDGMENT: MARY UKAEGO PETER-ODILI, J.S.C.

SUMMARY OF JUDGMENT

INTRODUCTION:

This appeal borders on the Jurisdiction of the Federal High Court to try Banker-Customer relationship matters.

FACTS:

This is an appeal against the judgment of the Court of Appeal, Lagos Division, Coram: Sidi Dauda Bage, JCA (as he then was), Samuel Chukwudumebi Oseji and Abimbola O. Obaseki – Adejumo JJCA delivered on the 30th day of March, 2016 where the Court affirmed the ruling of the trial Court delivered on 11th day of November, 2015 per M. B. Idris J.

The Respondents’ grouse in presenting the suit in this appeal is that Appellant herein allegedly failed and/or neglected to adhere to an “in-principle” agreement reached between a certain Honeywell Group Limited (not a party in the suit of this appeal) and the appellant. The respondents herein were indebted to the appellant bank over sums in excess of N5.5 Billion following which Honeywell Group Limited proposed to the appellant bank that the latter grant to it concessions on the total indebtedness. Appellant indeed, gave the concession as sought by Honeywell Group Limited that out of the entire N5.5 Billion outstanding, the negotiating Honeywell Group Limited pay a concessionary sum of N3.5 Billion on terms and conditions mutually agreed at the meeting of 22nd July, 2013. Further agreed at the 22nd July, 2013 meeting was that the negotiating third party, Honeywell Group Limited pay an immediate sum of N500,000,000.00 whilst the remainder N3 Billion is paid in bullet point form and before the departure of the then visiting CBN examiners at the appellants bank, in August, 2013.

​In a letter dated 22nd July, 2013 the negotiating third party, Honeywell Group Limited proposed fresh terms so as to stagger the repayment of the N3 Billion balance contrary to the agreement earlier reached. 

In confirmation of the above and upon receipt of the fresh proposal, appellant herein immediately caused to be issued; a letter dated same 22nd July, 2013 rejecting the new proposal and demanding a reversion to the agreement of 22nd July, 2013. There is no record of Honeywell Group Limited’s immediately and/or prompt reaction to the above reproduced assertions. Also by a letter dated 6th September, 2013, it was again admitted by the negotiating third party that agreement reached at the meeting of 22nd July, 2013 and for good order’s sake was for a bullet payment of N3.5 Billion. 

By a letter dated 14th September, 2014, the appellant’s bank again informed the negotiating third party that the agreement of 22nd July, 2013 became extinct and frustrated in August, 2013 following the palpable breach as contained and proposed in the letter dated 22nd July, 2013. However, that based on its unending proposal that the N3.5 Billion be deemed as full and final settlement of the obligations, appellant’s management submitted the fresh proposal to its board of directors and having considered same, the board rejected the offer. 

Following the foregoing, the respondents herein approached the trial Court seeking certain reliefs. At the resumed hearing before the trial Court on the 11th day of December, 2015 appellant’s counsel, informed the learned trial Judge, Idris J of the contempt apparent on the Motion on Notice dated 5th November, 2015.

​Following parties’ arguments on the contempt apparent on the face of the respondents’ process, His Lordship, Idris J, ruled that he indeed, saw the subject Motion seeking for abridgment of time but disregarded same. Subsequent to this, the respondents withdrew the contemptuous Motion on Notice following which His Lordship, Idris J, again held as follows: 

“The application having been withdrawn this morning, it is hereby dismissed. Counsel should be warned to desist from filing applications that might make it appear as though they owned the Court. The Court belong (sic) to everyone, it belongs to no one. I award N5,000.00 cost in favour of the defendants against the plaintiffs. Matter is adjourned to 14/12/15 for hearing.”

The appellant aggrieved approached the Court of Appeal. The appellant filed 2 (two) Notices of Appeal before the Court of Appeal one challenging the ruling of the trial Court dismissing appellant’s notice of preliminary objection dated and filed on the 11th day of December, 2015. The second Notice of Appeal, dated same 11th December, 2015 was against the trial Court’s ruling in respect of respondents’ Motion on Notice dated 5th November, 2015 which was contemptuous of the trial Court and which the trial Court discountenanced while adjourning hearing on the contempt proceedings commenced by the respondents against the appellant bank. 

At the hearing of the appeal, appellant herein withdrew the Notice of Appeal against the trial Court’s ruling over respondents’ contemptuous Motion on Notice.

The Court of Appeal in its judgment affirmed the decision of the trial Court hence this appeal.

ISSUES:

The Court determined the appeal on the Respondents’ issues as follows:

(i) Whether the Lower Court was right to have affirmed the decision of the trial Court to assume jurisdiction on the claim before it arising out of a banker-customer relationship.

(ii) Whether the Lower Court was correct in its resolution of the issue of cause of action, having considered the entire circumstances and facts of the case.

(iii) Did the decision of either of the two Lower Courts breach appellant’s right to fair hearing. 

DECISION/HELD:

In the final analysis, the Court held that the appeal lacked merit and it was accordingly dismissed. Consequently, the decision of the Court of Appeal and High Court was affirmed.

RATIOS:

• APPEAL – NATURE OF APPEAL – Nature of an appeal

“…That shown to be the angle put forward by the objector, there needs be cleared the point variously referred to by this Court that an appeal presumes or presupposes the existence of some decision appealed against where there is an absence of such a decision on a point it will be a waste of time for an appeal to lie against what the Lower Court had not reached and pronounced a decision upon. This is in consonance with the laid down practice of law that an appeal is a rehearing and for that to take place the appellate Court would reconsider the materials before the trial judge and would not hesitate to overrule his decision even on facts where after due regard and consideration it is manifest that the decision is wrong. See Babalola v. State (1989) 4 NWLR (Pt.115) 264 at 294 per Oputa JSC; Okhuarobo v. Aigbe (2002) 9 NWLR (Pt.711) 29 at 83 per Ayoola JSC.”

Per MARY UKAEGO PETER-ODILI ,J.S.C ( P. 14, paras. A-E )

 

• JURISDICTION – JURISDICTION OF THE FEDERAL HIGH COURT – Whether the Federal High Court has exclusive jurisdiction in cases of banker/customer relationship

“…To set the stage in this deliberation is to go into the constitutional provisions of Section 251 (1) (d) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) CFRN for short and thus:- 251 (1) – Notwithstanding anything to the contrary in this Constitution and in addition to such other jurisdiction as may be conferred upon it by an Act of the National Assembly, the Federal High Court shall have and exercise jurisdiction to the exclusion of any other Court in civil cases and matters – (a)…; (b)…; (c)…’ (d) connected with or pertaining to banking, banks, other financial institutions, including any action between one bank and another, any action by or against the Central Bank of Nigeria arising from banking, foreign exchange, coinage, legal tender, bills of exchange, letters of credit, promissory notes and other fiscal measures: Provided that this paragraph shall not apply to any dispute between an individual customer and his bank in respect of transactions between the individual customer and the bank.” From the provisions of Section 251 (1) (d) CFRN, the Federal High Court is vested with exclusive jurisdiction in relation to issues pertaining to banks, banking and other financial institutions but when the dispute relates to banker/customer relationship, the jurisdiction is not exclusive and the said jurisdiction is concurrently shared with the Federal High Court and the State High Courts and that of the Federal capital Territory. The interpretation clearing the grey area on the confusion that would have otherwise arisen is seen in the case of NDIC v. Okem Ent. Ltd (2004) 10 NWLR (Pt.680) 107 at 221 where the Supreme Court stated thus:- “Section 251 (1) (d) does not confer exclusive jurisdiction in disputes arising between individual customer and the bank on the State High Court. All it did is to remove the exclusivity in dealing with those kinds of disputes from the Federal High Court; which means that the High Court of a State by virtue of Section 272 (1) of the 1999 Constitution also shares the jurisdiction with the Federal High Court.”

Per MARY UKAEGO PETER-ODILI ,J.S.C ( Pp. 21-23, paras. F-D )

 

• BANKING LAW – BANKER-CUSTOMER RELATIONSHIP – Nature of a banker/customer relationship

“It is to be noted though the situation has become trite that it is the claim of a plaintiff that vests jurisdiction in a Court. See Adeyemi v Opeyori (1976) 9 – 10 SC 31. That is the basis on which the trial Court held thus:- “Whilst the defendant is not contesting the fact that it acquired all the rights and liabilities accruable to Oceanic Bank Plc, it then becomes lucid that the banker-customer relationship which existed between the plaintiffs and Oceanic Bank transposes to a relationship between the defendants (sic) and the defendant. See paragraph 9 of the statement of claim”‘ As a guide I shall cite the case of Bank of the North v. Yau (2001) 10 NWLR (Pt.721) 408 at 438 paras D – E, this Court per Ayoola JSC held thus:- “In the course of carrying on business of banking, a bank enters into several contractual relationships and performs various roles. It is important in an action between bank and customer to be clear which of the several contractual relationships forms or form the basis of the action. In this case, it is pertinent to note only four of these possible relationships, namely: (i) The relationship of creditor and debtor that arises in regard to the customer’s funds in the hands of the bank; (ii) The relationship of creditor and debtor that arises when the bank loans money to the customer or allows him to overdraw on this accounts; (iii) The relationship that arises from the role of the bank as a collecting bank of cheques drawn or other banks or branches of the same bank by a third person; and (iv) the possible role of the bank as a holder for value of a negotiable instrument.” (Underline mine for emphasis). The said meeting was also specifically referenced in relief 45 (a) of the statement of claim thus:- “A declaration that the plaintiffs (as customers), by the agreement reached at the meetings of July 22, 2013 and December 12, 2013 with the defendant (as banker to the plaintiffs) are not indebted to the defendant in any amount apart from the agreed sum of N3,500,000,000.00 (Three Billion, Five Hundred Million Naira) as full and final settlement/liquidation of their indebtedness.” Evidently clear from what has been showcased above is that what is available as the relationship between the parties is that of banker/customer, a situation of interaction emanating from a banking transaction where both parties assumed the role of creditor and debtor however the colouring presentation may seem to be. See Bank of the North v Yau (supra).”

Per MARY UKAEGO PETER-ODILI ,J.S.C ( Pp. 28-31, paras. F-A )

 

• APPEAL – UNAPPEALED FINDING(S)/DECISION(S) – Effect of unappealed finding(s)/decision(s) of court

“It follows that the objection raised by the appellant in the Court below would be headed for failure since that meeting of 22nd July, 2013 was held in the clear purview of the banker/customer relationship. The decision of the Court below in that regard being not appealed against has the matter settled for all time. I shall place reliance on the case of Akere v Governor of Oyo State (2012) 12 NWLR (Pt.1314) 240 at 278 wherein this Court held thus:- “In the circumstance, it is very clear and as settled in a long line of cases by this Court that a decision of a Court/tribunal not appealed against is deemed accepted and remains binding on the parties and all and sundry.” See also Kraus Thompson Organisation Ltd v Unical (2004) 9 NWLR (Pt.879) 631 at 653; A.G, Anambra State v A. G. Federation (2005) 9 NWLR (Pt.931) 572 at 615. The point has to be made that the learned counsel for the appellant’s submission cannot take the place of the pleadings before the Court nor the evidence proffered. Therefore the findings of the trial Court of Appeal that what was at stake was based on a banker/customer relationship and upon which the trial High Court was empowered to entertain not having been appealed against, learned counsel now bringing up the same issue at this address stage has in my humble view laboured in vain. See Obasuyi v Business Ventures Ltd (2000) 5 NWLR (Pt.558) 568 at 690; Akinbobola v Plisson Fisko (1991) 1 NWLR (Pt.167) 270 at 287. Indeed the Lower Court could only have decided the issue of cause of action on the same basis as the trial Court’s decision in reiteration that a reply address of counsel can neither be a re-argument nor an avenue to raise fresh not contained in the initial address or what was outside the pleadings of the plaintiff. Also to be brought in is the fact that the finding of the trial Court discountenancing the objection of the appellant on the cause of action as it relates to third party negotiations was not appealed in the court below and so remains binding and cannot be reopened at this stage either without a ground of appeal so holding it. See Akere v. Governor of Oyo State (supra) and A. G. Anambra State v A. G. Federation (supra); Agbakoba v INEC (2008) 18 NWLR (Pt.1119) 489; KT & Industries Plc v The Tug Boat M/V Japaul B. (2011) 9 NWLR (Pt.1251) 13 at 151 – 152. On the third issue on whether or not the right to fair hearing of the appellant was breached. The stance of the appellant on this question stems from a motion filed by the respondents on 5th November, 2015 and when it was called up for hearing on 11th December, 2015 which said motion was withdrawn and the appellant opposed the said withdrawal and the Court of trial allowed the withdrawal and dismissed the application and no appeal arose therefrom. The implication of there being no appeal in that regard is that the order of dismissal remained a final determination and end of all rights of a party arising from the dismissed process. I refer to Mohammed v. Abdulaziz (2009) All FWLR (Pt.465) 1684 at 1701.”

Per MARY UKAEGO PETER-ODILI ,J.S.C ( Pp. 31-33, paras. B-F )

 

• COURT – JURISDICTION – What determines jurisdiction of Court to entertain a cause/matter

“The law is trite that it is the claim of the plaintiff which determines the jurisdiction of the Court to entertain the matter. See Jev v. Iyortyom (2014) 14 NWLR (Pt.1428) 575, Adetayo & Ors v. Ademola & Ors (2010) 3-5 SC. (Pt.1) 87, Salik v. Idris (2014) 15 NWLR (Pt.1429) 36, Adetona & Ors v. Igele General Enterprises Ltd (2011) 7 NWLR (Pt.1247) 535.”

Per JOHN INYANG OKORO ,J.S.C ( P. 36, paras. B-D )

 

• JURISDICTION – JURISDICTION OF THE FEDERAL HIGH COURT – Whether the Federal High Court has exclusive jurisdiction in cases of banker/customer relationship

“A close perusal of the originating process before the trial Court clearly shows that the relationship between the appellant and the respondents is that of banker/customer relationship. There is nothing in the entire process to show a matter relating to simple contract. Section 251(1) of the Constitution of the Federal Republic of Nigeria vests exclusive jurisdiction on disputes between banks and other financial institutions but the Proviso thereto confers concurrent jurisdiction on the Federal and State High Courts in matters between an individual customer and his bank in respect of transactions between the individual customer and the bank. It is therefore erroneous to ague that the Federal High Court does not have jurisdiction in this matter between the Appellant and the Respondents. See Nigeria Deposit Insurance Corporation v. Okem Enterprises Ltd (2004) 10 NWLR (pt 880) 107, (2004) LPELR – 1999 (SC.), Merill Guaranty Saving & Loans Ltd & Anor v. Worldgate Building Society Ltd (2013) 1 NWLR (Pt.1336) 581; It must be noted that Section 251(1) (d) of the 1999 Constitution particularly the proviso thereof does not lose sight of the provision of Section 272(1) of the same constitution which provides that – “subject to the provisions of Section 251 and other provision of the Constitution the High Court of a State shall have jurisdiction to hear and determine any civil proceedings in which the existence or extent of a legal right, power, duty, liability, privilege, interest, obligation or claim is in issue.” I do not think this provision provides exclusive jurisdiction on the State High Court on issue of disputes between an individual customer and his bank. Both Courts have concurrent jurisdiction on issue of banker/customer relationship. Based on the above few words of mine and the elaborate reasons in the lead judgment, I agree that the Court below was right to uphold the jurisdiction of the Federal High Court to entertain this matter.” 

Per JOHN INYANG OKORO ,J.S.C ( Pp. 36-38, paras. D-A )