On Monday 23rd March 2020, the judicial division of the Court of Appeal in Jos gave a landmark ruling in the case of Jwan Moses v Ecobank v Ors where the Court held that the failure of the bank to pay a customer through the Automated Teller Machine (ATM) when the customer has enough money in his account is a breach of duty of care and entitled the customer to damages. The judgment was reported last week July 26, 2021, by the Nigerian Weekly Law Reports. Hence, the citation of the case Jwan Moses v Ecobank v Ors [2021] 10 NWLR pt 1785.
In course of this article, attention is given to the facts of the case, the roadmap to the judgment, and the effect of the judgment in the Nigerian Legal Jurisprudence.
THE FACTS OF THE CASE
The appellant was a customer of the respondents (Eco Bank PLC and United Bank for Africa PLC). While the 1st respondent was the appellant’s primary bank with which he had an account where his money was lodged, the 2nd respondent is the owner of an Automated Teller Machine (ATM) by which it offered banking services to the public including the appellant, on commission of N100 per transaction. The appellant used his ATM card issued to him by the 1st respondent in the ATM of the 2nd respondent to request money. His account was debited N10,000 as money withdrawn and N100 as a service charge. But no money was dispensed to him. The appellant immediately reported to the officers of both respondents when the ATM debited his account without paying him the money. His complaint to the officers of the respondents did not yield any positive result. The 1st respondent claimed that their record showed that the appellant was paid the money by the ATM.
Aggrieved, the appellant instituted an action against the respondents at the Plateau State High Court relying on the doctrine of res ipsa loquitur under the Tort of Negligence. By the action, the appellant claimed against the respondents for the sum of N10,000 (Ten Thousand Naira) which was debited to his account but which he was not paid. He also claimed for special damages of One Hundred Thousand and Twenty Naira (N100,020.00) only being the amount expended by the plaintiff in pursuit of his claim and the sum of Five Hundred Thousand Naira (N500,000) against the defendants jointly and severally as general damages for negligence.
At the end of the trial, he lost and then appealed to the Court of Appeal.
ISSUES FOR DETERMINATION
At the appeal, three issues were distilled for determination:
(A) Whether the learned trial Judge was right when he accorded ‘exhibit 19’ probative value and admitted same in evidence.
(B) Whether the learned trial Judge was right when he held that the plea of res ipsa loquitor relied upon by the appellant was inapplicable and thus placed the burden of proof on the appellant.
(C) Whether the learned trial Judge was right when he dismissed the entire claim of the appellant on the grounds that the appellant failed to discharge the burden of proof placed on him and that the entire claim lacks merit.
In relation to this article, the second and third issues are relevant to the subject matter.
THE ROADPATH TO THE JUDGMENT
The appellant’s gamut of argument was hinged on negligence using the res ipsa loquitur rule. Negligence is generally defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation which the defendant did not exercise. To succeed in an action for negligence, the plaintiff must prove:
(A) that the defendant owed a duty of care to the plaintiff;
(B) that the defendant breached that duty of care,
(C) and that the plaintiff suffered damage as a result of the breach.
As earlier stated, the burden of proving negligence always lies on the plaintiff. This rests on the principle that he who asserts must prove. Nevertheless, there are instances where a plaintiff suffered damage yet he could not show how the damage occurred. By default, his case is meant to be struck out. Fortunately, the Courts do aid every plaintiff using the doctrine of res ipsa loquitur.
Res ipsa loquitur is a Latin maxim which means the thing speaks for itself. The doctrine is usually employed in cases of proof of alleged unexplained happenings, the occurrence of which could not have happened in the ordinary course of events or things without negligence on the part of somebody other than the claimant. For instance, a sponge that was left inside a patient following surgery is an example of medical negligence based on res ipsa loquitur.
A claimant who relies on res ipsa loquitur only needs to prove the resultant accident and injury and then ask the Court to infer from that, negligence on the part of the defendant. The effect of the doctrine is that the burden of proof shifts back to the defendant to explain why the accident happened and that it didn’t occur as a result of a lack of care on his part. Failure to do this amounts to liability on the defendant’s part.
In the case under review, the duty of care exists in that – the relationship between the appellant and the respondents – is a banker and 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) thus: ‘…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 dishonouring 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.’
Similarly, in Allied Bank of Nigeria LTD v Akubueze (1997) LPELR-SC.80/1995, the Court per Iguh J.S.C (as he then) stated that: ‘the first basic point that must be made is that a bank is bound to honour a cheque issued by its customer if the customer has enough funds to satisfy the amount payable on the cheque in respect of the relevant account. Refusal to honour the cheque will amount to a breach of contract which would render the banker liable in damages.’
Giving the lead judgment in the case under review, the Court of Appeal likened an ATM card to a cheque. The Court per ALIYU, J.C.A. stated that: ‘the ATM card issued by a bank being akin to a cheque, which must be honoured on request once there is 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.’
Also, 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. Diamond Bank Plc v. Partnership Inv. Com. Ltd. (2009)18 NWLR (Pt. 1172) 67 and Agbanelo v. U.B.N. Ltd. (2000) LPELR-234(SC).
The Court set aside the decision of the Court of first instance, (The State High Court) and granted all the remedies sought against the respondents. Moses uses 10k to get over 500K. Isn’t that naizzzz?😄
Furthermore, until and unless this decision is changed by the Supreme Court if the respondents appeal, the current position of law is that the failure of the bank to pay a customer through the ATM when the customer has enough money in his account is a breach of duty of care and entitled the customer to damages.
THE EFFECT OF THIS PRINCIPLE
Unlike Buju and Ladipoe, many Nigerians don’t like the way they felt over failed transactions at the ATM stand. It is usually an experience of frustration and disappointment to have been debited yet without getting cash.
Many Nigerians know that this act is wrong. Few people know that it is actionable while a few people despite their awareness would rather choose not to bring a lawsuit considering factors like time and whether the monetary compensation will even be worth the ‘stress’. By default, it sounds implausible that the plaintiff, Mr. Jwan Moses will institute an action based on failed transaction of Ten Thousand Naira (N10,000.00) – an amount considered infinitesimal by many to warrant a court proceeding.
His attitude is commendable because, without his action, they won’t be a principle of law and it is through the principle of law that leads to the development of the law. Like this cause of action (failed transaction), many actions are legally wrong but Nigerians don’t bother bringing them before the Court. As often stated, the Court is not a father Christmas that gives people things without asking. Even if the Courts know that an action is wrong, they cannot suo motu (on its own) give a principle. Principles follow when litigants bring an action before the Court.
Secondly, another effect is that this recent principle may usher in a floodgate of cases between banks and customers over failed transactions. However, it is pertinent to note that not all failed transactions will be actionable. Whether the claim of negligence will avail any plaintiff will be determined based on the facts of each case.
For instance, if the transaction shows a ‘User or Switch Inoperative’, which means that, the customer’s bank or card network is temporarily unavailable due to downtime. This is not actionable.
Also, such an error that leads to the failed transaction must have first being reported to the concerned bank(s). It will be an immature action to commence an action without first making attempts to resolve the issue. In addition, if the money is reversed within few days, then no action will arise. In the case under review, the money was deducted, the plaintiff didn’t get his cash, he laid a complaint and nothing was done about it. Hence, his case was unique.
In conclusion, this recent principle is commendable as it sends a strong note of warning to financial institutions in Nigeria to always deliver excellent and effective services to its customers, who now armed with the knowledge of the law, can institute an action, if the financial institutions breach this duty of care.
Thank you for reading❤. See you next week.🤗
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