EFFECT OF FAILURE TO HONOR AN ATM CARD TRANSACTION WHERE THERE ARE SUFFICIENT FUNDS IN THE ACCOUNT OF THE CUSTOMER

CASE TITLE:                         MR. MOSES G. JWAN v. ECOBANK NIGERIA PLC & ANOR (2020) LPELR-55243(CA)

JUDGMENT DATE:           23RD MARCH, 2020

JUSTICES:                            ADZIRA GANA MSHELIA, JCA

                                           TANI YUSUF HASSAN, JCA

                                           BALKISU BELLO ALIYU, JCA

COURT DIVISION:            JOS

PRACTICE AREA:              Banking Law- Duty of a Bank

FACTS

The Appellant, Mr. Moses G. Jwan is a customer of the 1st Respondent, Ecobank Nigeria Plc, which issued him with an ATM card to have access to his account. He used the ATM card in the ATM of the 2nd Respondent, United Bank of Africa, located at Federal School of Forestry, Bauchi Road, Jos, to attempt to withdraw the sum of N10,000.

The machine did not dispense money for him to retrieve but it showed that the transaction was successful and his account was debited when in fact he did not receive the requested money. His complaint to the officers of both banks did not yield any positive result because Ecobank claimed that their record showed that he was paid the money by the ATM.

The Appellant subsequently sued both banks at the High Court of Justice of Plateau State claiming for the sum of Ten Thousand Naira being the amount debited from his account with Ecobank Nigeria Plc and for which the United Bank of Africa surcharged him, Special damages of One Hundred Thousand and Twenty Naira being the amount expended by him in pursuit of his claim from the Respondents and the sum of Five Hundred Thousand Naira against the Respondents jointly and severally as general damages for negligence.

The Appellant pleaded res ipsa loquitur and claimed he could not explain how his account could be debited by the United Bank of Africa’s ATM when he was not paid the money. He went to both banks severally in an attempt to recover his money as a result of which he incurred other expenses, thus his claim for special and general damages before the High Court.

Both banks denied Mr. Moses G. Jwan’s claim that they were negligent and insisted that by their records, he was paid the sum of N10,000 by the ATM of United Bank of Africa.

In its considered judgment, the High Court found and held that the Appellant had failed to discharge the burden of proof placed on him in the case and thereby dismissed his entire claim.

The Appellant being dissatisfied with the High Court’s decision, appealed to the Court of Appeal.

ISSUES FOR DETERMINATION

The Court determined the appeal upon consideration of the following issues:

1. Whether the learned trial Judge was right in admitting Exhibit 19 and in giving it probative value.

2. Whether the learned trial Judge was right in holding that in the circumstances of the case, the doctrine of res ipsa loquitor was inapplicable and in placing the burden of proof in the case on the appellant.

3. Whether the learned trial Judge was right when he held that the respondents were not negligent and in dismissing the appellant’s claims.

The Learned Counsel for the Appellant argued that the learned trial Judge was wrong when he admitted the photocopy of the 2nd Respondent’s ATM journal as Exhibit 19, which the Respondents claimed recorded the ATM transaction leading to the suit. Learned Counsel also argued that it was incumbent on the Respondents to prove by evidence that the occurrence was by accident and not through their negligence. That the essence of the doctrine of res ipsa loquitur was to shift the onus on the defendant, which the learned trial Judge erroneously ignored to do.

The Learned Counsel for the 1st Respondent, on the other hand, submitted that having desired the trial Court to direct the Respondents to award to him his claims, the Appellant had the duty of proving his entitlement to the said claims to the satisfaction of the trial Court.

He further contended that the doctrine of res ipsa loquitur as a cause of action was not available to the Appellant who has failed to prove the material facts of his claims of negligence occasioned by the duty of care owed him before the trial Court. It was finally argued that evidence of the Respondents through their witnesses was more credible and believable than the evidence of the Appellant.

The 2nd Respondent’s Counsel in addition to the 1st Respondent’s Counsel’s submission contended that the learned trial Judge was right to admit the copy of Exhibit 19 (bank’s journal) and accord it probative value in entering judgment against the Appellant because the facts regarding it were pleaded and the Respondent’s witness explained that its original was lost.

DECISION/HELD

In the final analysis, the Court of Appeal held that the appeal had merit and it was allowed. All the reliefs claimed by the Appellant were accordingly granted against the Respondents jointly.

RATIOS

1. BANKING LAW- DUTY OF A BANK

Whether the duty of a banker towards its customers extends to ATM transactions; effect of failure to honor an ATM card transaction where there are sufficient funds in the account of the customer – “…Therefore, the respondents as bankers to the appellant owed him a duty to exercise reasonable care, diligence and skill in carrying his instructions, which duty has been held to extend over a whole range of banking business including ATM transaction in issue. See Diamond Bank Plc V. Partnership Inv. Com. Ltd. (2009) 12 SCNJ 322; (2009) 18 NWLR (Pt. 1172) 67 and Agbanelo v. U.B.N. Ltd. (2000) LPELR-234(SC); (2000) 7 NWLR (Pt. 666) 534. The ATM card issued by a bank being akin to a cheque, which must be honored on request once there are enough funds in the customer’s account, and failure to do that will mean the banker is in breach of the duty of care owed to its customer. No doubt it is one of banking innovations to use an ATM card by a customer to request for and withdraw cash from his bank account, and indeed a specialized banking service offered by the respondents. Therefore, the issuance of the ATM cards by the banks to its customers carries with it the duty to ensure that both the cards and the ATMs work as they are meant to and where there is the failure of these services to a customer, the banks are duty-bound to explain what happened. This is quite common since the ATMs and their operations are under the control and management at the banks.” Per ALIYU, J.C.A.

• BANKING LAW- BANKER-CUSTOMER RELATIONSHIP:

Nature of a banker/customer relationship – “The relationship between a customer and his bank was explained by the Supreme Court in the case of U.B.N. Plc v. Chimaeze (2014) LPELR-22699(SC); (2014) 9 NWLR (Pt. 1411) 166 per Ariwoola, JSC at pages 40-41 that: “…the appellant is a fiduciary to the respondent. It owes the respondent a duty to exercise a high standard of care in managing the respondent’s money. Therefore, for dishonoring his cheque when his account was in credit to accommodate the amount on the cheque, the appellant had breached the fiduciary relationship between them, to which the respondent was entitled to compensation by way of damages.” Per ALIYU, J.C.A.

• TORT- RES IPSA LOQUITUR

Position of the law as regards the required proof of negligence and the applicability of the doctrine of res ipsa loquitor – “The general rule of evidence is that a plaintiff who alleges negligence has the duty to prove specific acts or omissions on the part of the defendant that will qualify as negligent conduct that caused him damages. However, sometimes circumstances of a case may warrant the Court drawing inference of negligence against the defendant without hearing detailed evidence of what he did or did not do. In such circumstance, the inference connotes that in the absence of explanation from the defendant, the plaintiff has discharged his burden of proof. This is what is where the doctrine of res ipsa loquitur is invoked. Res ipsa loquitur means the thing speaks for itself… There are certain happenings that do not normally occur in the absence of negligence, and upon proof of these, a Court will probably hold that there is a case to answer.” The plea of res ipsa loquitur by the plaintiff is therefore meant to raise an inference of negligence on the part of the defendant in view of the circumstances of the case. Whether or not the maxim applies in a particular case depends on the strength of the inference and the duty of care that the defendant owed the plaintiff. In fact, it is not even necessary to specifically plead the maxim for it to apply. The effect of its application would entitle the plaintiff to judgment unless the defendant rebuts the inference and exonerates himself by showing firstly, how the event happened, and secondly, that there was no lack of care on his part or on the part of other persons for whom he is responsible. See Woods v. Duncan (1946) AC 401; S.P.D.C. v. Anaro & Ors. (2015) LPELR-24750 (SC); (2015) 12 NWLR (Pt. 1472) 122 and Chudi Verdical Co. Ltd. v. Ifesinachi Ind. (Nig.) Ltd. & Anor. (2018) LPELR-44701 (SC); (2018) 16 NWLR (Pt. 1646) 520.” Per ALIYU, J.C.A.