Can an Action for Wrongful Freezing of Account be brought Under the Fundamental Rights (Enforcement Procedure) Rules?

CASE TITLE: GTB PLC v. HENSTEEL ENGINEERING CONSTRUCTION LTD & ANOR (2024) LPELR-61909(CA)

JUDGMENT DATE: 14TH MARCH, 2024

JUSTICES: MISITURA OMODERE BOLAJI-YUSUFF JCA
ABIMBOLA OSARUGUE OBASEKI-ADEJUMO JCA
ABDUL-AZEEZ WAZIRI JCA

DIVISION: ASABA

PRACTICE AREA: PRACTICE AND PROCEDURE

FACTS:

This appeal arises from a judgment by the High Court of Delta State, where the 1st Respondent alleged that its account was unlawfully frozen by the Appellant at the instruction of the 2nd Respondent without a Court order, violating its rights to access its funds and own property. The Appellant argued that the account was frozen following a legitimate order from the High Court of Edo State, dated February 11, 2022, which they verified as authentic before restricting access. However, the trial Court found that the account had been frozen before the Appellant received the Court order, thereby infringing on the 1st Respondent’s fundamental rights. The Court awarded the 1st Respondent N2,000,000 in exemplary damages and N500,000 in costs against both the Appellant and the 2nd Respondent. Dissatisfied with this decision, the Appellant filed an appeal.

ISSUES FOR DETERMINATION:

The Court determined the appeal on the following issues, viz:

1) Whether the lower Court erred in law when it failed to determine/resolve the issue of jurisdiction raised by the appellant before proceeding to assume jurisdiction in the matter?

2) Whether the failure to determine/resolve the issue of jurisdiction invalidates the proceeding?

3) Whether the lower Court was right to have assumed jurisdiction in this matter under the Fundamental Human Rights Proceedings?

4) Whether the 1st respondent discharged the burden to prove the allegation that the appellant unlawfully restricted its account to be entitled to judgment?

COUNSEL SUBMISSIONS:

The appellant’s counsel argued that the alleged unlawful freezing of the 1st respondent’s account by the appellant, at the request of the 2nd respondent, was a matter concerning the banker/customer relationship and not a constitutional issue under Chapter IV of the 1999 Constitution. Therefore, it should not have been handled through fundamental human rights enforcement proceedings. He cited Dongtoe vs. Civil Service Commission, Plateau State, to support this view. He further contended that the 1st respondent’s account was not covered by Sections 43 and 44 of the Constitution, as Section 43 refers to “immovable property” and Section 44 deals with “compulsory acquisition” of property, which did not apply in this case. The counsel maintained that the trial Court incorrectly assumed jurisdiction under fundamental human rights enforcement procedures for a matter that was clearly a banker/customer issue, citing Gafar v. Government of Kwara State and R.T.E.C.W.A. v. Governor of Jigawa State as supporting authorities.

In response, the 1st respondent’s counsel argued that the appellant’s claim that the issue was merely contractual was misguided. He emphasized that the case involved the unlawful freezing of the account, which constituted a violation of the 1st respondent’s rights, as recognized by the trial Court and supported by previous cases, including GTB v. Adedamola and Access Bank Plc v. Agbasiere. The counsel asserted that the primary complaint was the breach of the 1st respondent’s right to operate its account, which had been frozen without a Court order, violating its fundamental right to movable property as protected by Section 44 of the Constitution.

In reply, the appellant’s counsel reiterated that the relationship between a bank and its customer was fundamentally contractual, and any breach of such contractual obligations should be pursued through civil action for damages. He referenced Wema Bank vs. Osilaru and UBN Plc vs. Ifeoluwa Nig Enterprises Ltd. to reinforce his argument.

DECISION/HELD:

In the final analysis, the Court set aside the judgment of the trial Court. In its stead, the reliefs sought by the 1st respondent against the appellant failed and was dismissed by the Court.

RATIO:

PRACTICE AND PROCEDURE – FUNDAMENTAL RIGHT (ENFORCEMENT PROCEDURE) RULES: Whether a person whose account was frozen without Court order can bring an action under the Fundamental Right (Enforcement Procedure) Rules

“In the instant case, the 1st respondent’s case is that his account was frozen without an order of Court and that the action is an infringement of his right to property guaranteed under Section 44(1) of the Constitution, which provides that:

“No moveable property or any interest in an immoveable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by law.” The words of Section 44(1) of the Constitution are very clear and unambiguous. While Section 43 gives and guarantees the right of citizens to acquire and own immovable property anywhere in Nigeria, Section 44(1) guarantees and protects the right of a citizen to his movable and immovable property. It forbids taking possession of a citizen’s right in both moveable and immoveable property except in the manner and for the purposes prescribed by law. Section 44 (2) (k) of the Constitution allows temporary taking of possession of property for the purpose of any examination, investigation and enquiry.

Freezing a bank account denies the owner of the account the right to the money in the account, even if temporarily. The issue of whether a person whose account is frozen without a Court order can bring an action under the Fundamental Right (Enforcement Procedure) Rules was considered in ACCESS BANK PLC v. AGBASIERE [2022] LPELR-58489 [CA]. This Court held that:

“The real question is whether the Respondent’s right or cause of action lies in an application for enforcement of fundamental rights under the Fundamental Rights (Enforcement Procedure) Rules or through a regular Writ of Summons. In answering this question, it is important to reproduce the provisions of Section 44 (1) of the 1999 Constitution allegedly breached by the Appellant. It provides follows: “No moveable property or any interest in an immovable property shall be taken possession of compulsorily and no right over or interest in any such property shall be acquired compulsorily in any part of Nigeria except in the manner and for the purposes prescribed by law.” in resolving a similar dispute, this Court in the case of OLAGUNJU V EFCC (2019) LPELR-48461 (CA) in ruling in a preliminary objection held thus: “In the resolution of issue NO.1, I have held that the freezing of the applicant’s account by the Respondent is unlawful and unconstitutional having been done without a Court order. Furthermore, I hold that the freezing of the Appellant’s account on the order of the Respondent without a Court order amounts to a breach of the Appellant’s fundamental right to moveable property guaranteed by Section 44 (2) (k) of the Constitution of the Federal Republic of Nigeria, 1999 and Section 34 (1) of the EFCC Act. ” This Court also came to the same conclusion in the case of GTB PLC V ADEDAMOLA & ORS (2019) 5 NWLR, PT 1664, 30 (CA), where the appellant contended that the respondent’s suit was not enforceable under the Fundamental Rights (Enforcement Procedure) Rules because, like in the instant case, the action centered on the restriction of the Respondent’s account as its principal relief. The instant case is on all fours with these two cases cited. I have no reason to depart therefrom. Consequently, I hold that the lower Court acted rightly in the exercise of its jurisdiction when he heard and determined the application.” ​Though the relationship between the appellant and 1st respondent is that of a banker and customer, what determines the type of action to institute and the relief(s) to be sought by a party is the cause of action. The same facts may give rise to two distinct causes of action and where that occurs, a party has the right to elect which is the better cause of action to follow in seeking remedy or redress for the perceived wrong. See A.I.C. LTD V. MANNESMANN-ANLAGENDAU AG & ANOR (1993) LPELR-14510(CA) AT 20-21 (E-D). The law is settled that in determining whether an action qualifies as a fundamental right action, it is the reliefs sought, the grounds for such reliefs, and the facts relied upon that should be considered. The cause of action in the instant case is the alleged freezing of the 1st respondent’s account on the instruction of the 2nd respondent without a Court order, which, if established, would amount to an infringement of the 1st respondent’s right to its movable property.” Per BOLAJI-YUSUFF, J.C.A.