A CUSTOMER CANNOT BE FORECLOSED FROM SUING TO RECOVER ITS DEPOSIT WITH A BANK WHERE SUCH BANK CONTINUES TO USE SAME FOR BUSINESS

FIRST BANK v. STANDARD POLYPLASTIC INDUSTRIES LTD (2018) LPELR-44081(CA)

PRACTICE AREA: CONTRACT

INTRODUCTION

“It should be appreciated that, in the law relating to statute of limitation, time cannot run out in a situation of a continuous act of damage or injury, complained of. Where a bank is holding onto some deposit of a customer, and is profiting from the deposit, by using same for its business. I cannot see how time can run out for the customer to take out action to recover the said deposit and/or interest, thereon, to suggest foreclosing the customer from recovering the money from the bank, particularly where the bank has admitted custodying the funds of the customer, in whatever currency.” These were some of the words of MBABA, J.C.A. while delivering the leading judgment in this appeal.

He went further to posit that “… where by Exhibit CM, Appellant admitted that the money (the naira deposit for the foreign exchange cover) was with it (Appellant), and represented the Appellant’s only liability in the transaction. The said acknowledgement, as per the Exhibit CM, had revived the right to recover the money (if at all that was necessary), as stated by the Respondent”

Making sure that there is no grey area, the Honourable Justice clarified that: “It should also be added that, it would be immoral and legally offensive, in my opinion, for a party to seek to invoke the rule of statute bar, just to defeat a legitimate claim for refund of money and escape responsibility, after taking advantage of a contract and benefiting from the transaction for which he is called upon to account. He cannot hold on to the funds of Claimant and continue to trade with it and refuse to render account, alleging that the claimant is statutorily barred from taking action to recover his money, and for damages/interests.”

FACTS

The facts, as contained in this judgment are that the Respondent (as Claimant) filed a suit against the Appellant (who was the Defendant) at the Abia State High Court. The Respondent’s came was inter alia for an order for refund to the plaintiff of the unremitted USD 134,580 in respect of letters of credit (L/Cs) Nos. 330/83/11/1D (USD 129,150.00) and 330/83/21/ID (USD 5,430.00) which the Defendant procured from the Central Bank of Nigeria on behalf of the Claimant for remittance to claimant’s customer, Bramchas Trading Company London, for supply of goods to the Claimant, which The Defendant failed to remit to the said Bramchas Trading Company, London; the sum of USD 5,439,044.14 being interest from 30/5/83 to 31/8/13 on the said unremitted USD 134,580.00 which the Defendant failed to remit to the Claimant’s said customers as aforesaid but rather employed same in its banking transaction business and interest at the rate of 12% on the said USD 134,580.00 from September, 2013 till judgement was delivered.

Parties exchanged pleadings and on 2/5/14, Appellant (as Defendant) filed a motion for the suit to be dismissed for being statute barred, and for lack of locus standi by the Respondent (as Claimant) to bring the suit. The Trial Court dismissed the objection on 27/10/14, saying that the Appellant’s letter of 13/9/2010 (Exhibit CM) had revived the cause of action. At the conclusion of the trial, the trial Court found for the claimant.

Dissatisfied by the judgment, Appellant filed a Notice of Appeal at the Court of Appeal to initiate this extant appeal.

ISSUES FOR DETERMINATION

The six issues formulated by the Appellant for the determination of this appeal were re-couched into three broad heads by the Court and used to determine this appeal. The issues are as follows:

(1) Whether the trial Court had jurisdiction to determine the Suit, considering the allegation that the claim was statute barred and that the Respondent had no locus standi to bring the Suit.

(2) Whether the trial Court properly evaluated the evidence by the parties to reach its conclusion that Appellant was allocated foreign exchange by CBN, relying on the Exhibits CC, CD and others, which Appellant now says were not admissible?

(3) Whether the trial Court was right to award the damages in dollars, and the interest elements, claimed by the Respondent and relying on Exhibit CA?

HELD

I resolve the Issues against the Appellant, except as earlier stated in respect of the double compensation.

Thus, the interest accruing from the main claim of $134,580.00, from 30/5/83 to 31/8/2013 was US$5,304,464.14 (Five Million, Three Hundred and Four Thousand, Four Hundred and Sixty Four Dollars, Fourteen cents), instead of $5,439,044.14. The rest of the decision of the learned trial Court is hereby affirmed, as the appeal is dismissed.

Appellant shall pay the cost of this appeal, assessed at Fifty Thousand Naira (N50, 000.00) only.

RATIO DECIDENDI

LIMITATION LAW – ACKNOWLEDGEMENT OF DEBT: When does time begin to run to enforce a contract where debt is acknowledged

“The Respondent had relied on the Appellant’s letter (Exhibit CM) written on 13/9/2010 to the Respondent, on the lingering dispute about the refunds/remittance of the foreign exchange, made to the Respondent by the Central Bank of Nigeria (CBN), through Appellant. The said letter was a reply to Peak International Corporate Adjusters Ltd, retained by Respondent to demand for the refunds of the said remittance, by the Appellant.

The Respondent had argued that the above letter (Exhibit CM) had revived the right of a action in the contract, and that the Appellant had even acknowledged same in paragraphs 3.16 to 3.18 of the Brief (Pages 7 and 8 thereof), and so Appellant cannot talk about the Suit being statute barred.

At the trial, Appellant had said that the Respondent went into slumber, that it did not take the action, until after about twenty (20) years, the transaction having taken place in 1983; that Respondent did not take action to mitigate its damages.

Of course, the trial Court ruled that Appellant misfired; that interestingly, by Exhibit CM, Appellant acknowledged being in possession of the money in Naira. The trial Court also observed that it had earlier ruled against the Appellant in the challenge of jurisdiction on the grounds of the action being statute barred and on grounds of locus standi, and that ruling was not challenged on appeal. (See pages 140 – 142 of the Records)

As rightly argued by the Respondent, the Courts normally rely on the writ of summons and/or statement of claim (Claimant’s pleading) to determine whether or not a Suit is statute barred, and it does this by reference to when the cause of action arose (as pleaded by the Claimant) and the time the Claimant commenced action to claim his right. See Ogboru Vs Uduanghan (2012) 11 NWLR (Pt1311) 357; Odubeko Vs Fowler (1993) 7 NWLR (Pt.308) 637.

In this case the Respondent had stated in the pleadings when the cause of action arose, and had relied on the Appellant’s letter of 13/9/10. Moreover, this case is for the refund of money, which Appellant admits holding the Naira deposit of the value of the foreign exchange claimed.

In the case of FBN Plc Vs Ozokwere (2014) 3 NWLR (Pt.1395) 439 at 499, the Supreme Court said:

“… It should be noted that the case of the Respondent is simply for refund of the sum of money $186,990.00 paid to the Appellant for the benefit of Goodfit Trading Co. Ltd, for a consideration that failed. Also to be noted is the fact that it is not the case of the Appellant that it paid the money over to Goodfit Trading Co. Ltd or the correspondent bank. In fact, evidence abounds on record that the money in question is still in the possession of Appellant. These are some of the facts that ground the cause of action of the Respondents and there is evidence on record to support them. It is clear from the record that the mention of statute of limitation in the judgment of the lower Court, which senior Counsel for Appellant considers to be speculative, has nothing whatsoever to do with the case of the parties as pleaded and canvassed before the Court.”

I think the above agrees with the situation of the case, at hand, where by Exhibit CM, Appellant admitted that the money (the naira deposit for the foreign exchange cover) was with it (Appellant), and represented the Appellant’s only liability in the transaction. The said acknowledgement, as per the Exhibit CM, had revived the right to recover the money (if at all that was necessary), as stated by the Respondent – See Nigeria Social Insurance Trust Fund Management Boards Vs KLIFCO Nig. Ltd (2010) 13 NWLR (Pt.1211) 307, as Appellant in that letter (Exhibit CM) not only acknowledged liability in respect of the Naira deposit for the foreign exchange cover held by it in the Bank, but also further promised to conclude its review on the demand by the Respondent, upon Respondent forwarding more proof of its entitlement to the claims.

Thus, having written on September 13th, 2010 admitting the transaction that brought about the claim, and acknowledging liability in the naira deposit for the foreign exchange cover, Appellant, in my view, cannot raise any issue of statute of limitation against the liability and the claims of the Respondent, even if the doctrine of statute of limitation could be invoked to stop recovery of debt accruing in a contractual transaction, as in this case.

In the case of A.G. Adamawa State Vs A.G Federation (2014) 14 NWLR (Pt.1428) 515 at 566, the Supreme Court held:

“As clearly shown in the statement of claim of the Plaintiff, their cause of action arose at the acceptance and acknowledgement of indebtedness by the Defendant in July 1983, and time therefore began to run effectively from then.” Per Ariwoola JSC.

It was further held (at page 562 of the above case):

“… based on the dictum reproduced above, the Plaintiff’s cause of action, the fact or the factual situation which gave them the right to seek judicial relief or remedy, is the letter No. SCB/MKT/XIII/53 which the Defendant wrote to them, acknowledging indebtedness to the Plaintiff.”

It should be appreciated that, in the law relating to statute of limitation, time cannot run out in a situation of a continuous act of damage or injury, complained of. Where a bank is holding onto some deposit of a customer, and is profiting from the deposit, by using same for its business. I cannot see how time can run out for the customer to take out action to recover the said deposit and/or interest, thereon, to suggest foreclosing the customer from recovering the money from the bank, particularly where the bank has admitted custodying the funds of the customer, in whatever currency.

In the case of NNPC Vs Zaria & Anor (2014) LPELR – 22362 CA, this Court held:

“The law is that generally, where the injury complained of is a continuing one, time does not begin to run for the purpose of application of a limitation law, until the cessation of the event leading to the cause of action (Abiodun Vs Attorney General of the Federation (2007) 15 NWLR (Pt.1057) 35). Also where, the continuance of damage is such that gives rise to a fresh cause of action, everytime it occurs, limitation law will not apply to bar action on the fresh cause of action. See Shell Petroleum Development Company Nigeria Ltd Vs Amadi (2010) 13 NWLR (Pt.1210) 82…”

It should also be added that, it would be immoral and legally offensive, in my opinion, for a party to seek to invoke the rule of statute bar, just to defeat a legitimate claim for refund of money and escape responsibility, after taking advantage of a contract and benefiting from the transaction for which he is called upon to account. He cannot hold on to the funds of Claimant and continue to trade with it and refuse to render account, alleging that the claimant is statutorily barred from taking action to recover his money, and for damages/interests.

In the recent case of Emmanuel Mekaowulu Vs Ukwa West L.G.A: CA/OW/153/2009, delivered on 16th February, 2018, this Court held:

“It is therefore inconceivable to say, let alone, hold that such valid contract, duly executed and for which the Respondent enjoyed the benefits, could be held to be statute barred, when it comes to payment for the whole job done, which the Respondent had taken benefit of. To enforce such contraption, as law, would in my opinion, amount to entrenching evil, encouraging a party to profit from his own wrong doing, by taking benefit of a contract but refuse to pay for the job and manipulating the situation for a while… and then plead statute bar, when the Plaintiff, finally, takes action in Court to recover the debt…”

See also the case of PDP Vs Ezeonwuka & Anor. (2017) LPELR – 42563 (SC), where the Supreme Court said:

“Equity, acting in personam, would not allow a party to benefit from his own iniquity. It insists that whoever comes to it or justice must do justice, and must not come to temple of justice with dirty hands.”

And in Teriba Vs Adeyemo (2010) LPELR – 3143 (SC); (2010) 13 NWLR (Pt.1211) 242, it was held:

“… the applicable equitable principle being that a person cannot benefit from his own wrong. It is adjudicatory functions; the Court has a duty to prevent injustice in any given circumstance, and avoid rendering a decision which enables a party to escape from his obligation under contract by his own wrongful act…” Ekawm Vs Akpan (1991) 8 NWLR (Pt.211) 616.”Per MBABA, J.C.A. (Pp. 33-44, Paras. F-A)

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