CASE TITLE: FBN LTD v. OGWEMOH (2023) LPELR-60298(CA)
JUDGMENT DATE: 17TH APRIL, 2023
PRACTICE AREA: CONTRACT
LEAD JUDGMENT: MUHAMMED LAWAL SHUAIBU, J.C.A.
SUMMARY OF JUDGMENT:
INTRODUCTION:
This appeal borders on fraudulent misrepresentation in a contract.
FACTS:
This is an appeal against the judgment of the Federal High Court, Lagos.
By an amended writ of summons filed on 4/11/2013, the plaintiff claimed against the defendant, inter alia for a declaration that the defendant breached the terms of Margin Trading Facility Agreement(MLA) dated 20/2/2008 and that same occasioned huge losses to the plaintiff.
The respondent vide a letter dated February 6, 2008, applied for a Margin Loan Facility from the appellant and the appellant offered the respondent a N20,000,000.00 margin loan which was accepted by the respondent by her letter dated February 20, 2008. The terms and conditions of the margin loan is that the appellant availed the respondent the facility for the purchase of multi-scrip shares (that is, shares of different companies) namely Standard Alliance Assurance Ltd, Access Bank Plc and Equity Assurance Plc.
As required under the MLA the respondent also provided certain units of Union Bank and Guaranty Trust Bank’s shares purchased with facility and shares deposited as the appellant’s 30% contribution pledged with appellant as security for the Facility granted under the MLA.
The respondent case was that the appellant induced her to enter the MLA and that the appellant also breached the terms of the MLA which allegations, the appellant vehemently denied.
Parties filed and exchanged pleadings. At the trial, both parties led oral and documentary evidence. Satisfied that the plaintiff had proven its case against the defendant, the trial judge entered judgment for the plaintiff. Dissatisfied with the judgment of the trial Court, defendant/appellant appealed to the Court of Appeal.
ISSUES:
The Court determined the appeal on the following issues, viz:
1. Whether the lower Court was right when it held that it has jurisdiction to entertain the suit.
2. Whether the trial Court erred when it found that the appellant misrepresented its skills and induced the respondent into signing the margin loan agreement which made her lose all her investments in the U-first product?
3. Whether the lower Court was right when it held that the appellant breached the terms of the MLA and granted the reliefs sought by the respondent?
DECISION/HELD:
In the final analysis, the appeal was allowed.
RATIOS:
- BANKING LAW – BANKING BUSINESS: What constitutes banking business
- CONTRACT – FRAUDULENT MISREPRESENTATION: What a party whose claim is based on fraudulent misrepresentation must prove to succeed
- CONTRACT – AGREEMENT: Whether the Court is allowed to read terms which were not agreed to by the parties into their agreement
- CONTRACT – TERMS OF CONTRACT: Whether parties are bound by the terms of their contract; what is the legal source of information for the purpose of resolving a dispute between the parties to a written agreement
- CONTRACT – WRITTEN CONTRACT: Whether oral/extrinsic evidence can vary a written contract
- EVIDENCE – STANDARD OF PROOF: Standard of proof required where fraud is alleged in any proceedings
- JURISDICTION – JURISDICTION OF THE STATE/FEDERAL HIGH COURT: Whether the State High Court or Federal High Court has jurisdiction over a simple contract arising from a banker-customer relationship.
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