A bank’s failure to pay an ATM request is a breach of duty of care

BD LAW DIGEST WITH CLRN & ALP NG & Co.

MR. MOSES G. JWAN v. ECOBANK NIGERIA PLC; UNITED BANK FOR AFRICA PLC

COURT OF APPEAL (NIGERIA)

(JOS DIVISION)

(MSHELIA; HASSAN; ALIYU, JJ.CA)

FACTS

Mr. Jwan (the Appellant) was a customer of Ecobank Nigeria Plc and United Bank for Africa Plc (the 1st & 2nd Respondents) who are both commercial banks. 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 ₦100 per transaction. The Appellant used his ATM card issued to him by the 1st respondent in the ATM of the 2nd respondent to request for money. His account was debited with the sum of ₦10,000 as the money withdrawn and ₦100 as a service charge, but no money was dispensed to him.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 results. The 1st respondent claimed that their record showed that the Appellant was paid the money by the ATM. This aggrieved the Appellant and he, therefore, instituted an action against the Respondents at the High Court of Plateau State. The Appellant claimed against the Respondents for the sum of ₦10,000(Ten Thousand Naira) which was debited from his account but which he was not paid. He also claimed special and general damages. At the trial, the Appellant pleaded res ipsa loquitur and claimed he could not explain how his account could be debited by the 2nd respondent’s ATM though the money was not dispensed to him. He tendered his statement of account showing he was debited with the sum of ₦10,000 as the money withdrawn and ₦100 as the service charge for the transaction. The Respondents denied the Appellant ’s claim that they were negligent. They insisted that by their records, the 2nd respondent’s ATM dispensed the sum of ₦10,000. In its judgment, the trial court held that the Appellant could not rely on the doctrine of res ipsa loquitur. The court also held that the Appellant failed to discharge the burden of proof on him with regard to his case. It therefore dismissed the Appellant ’s claims.

Dissatisfied, the Appellant appealed to the Court of Appeal. One of the issues for determination is: Whether the learned trial Judge was right when he held that the Respondents were not negligent and in dismissing the Appellant ’s claims.

ARGUMENT

Learned Counsel for the Appellant argued that since the Appellant was the one who asserted the negative to the effect that he was debited and not paid the cash by the Respondents, it is they that had the initial burden of proof having asserted the positive. The learned counsel referred to the Respondents evidence which they tendered to support their claim and argued that the evidence of the Respondents to the effect that they were still awaiting an image of the transaction was at variance with their later claim that there was no image of the transaction in issue. It was further argued that the debiting of the account was not in issue between the parties. What was in issue was the fact that the Appellant ’s account was debited, and the transaction was stated to be successful, but no money was paid to him. Counsel noted also that Respondents both admitted in their evidence, the possibility of a customer’s account being debited without the customer being paid which meant that the mere debiting of the account does not amount to conclusive evidence of payment to the Appellant or a success of the transaction. In conclusion the learned counsel submitted that the Respondents failed to prove that the Appellant was indeed paid and urged the Court to intervene and resolve the issue in favour of the Appellant.

In response, learned Counsel to the Respondent argued that the Appellant who alleged that the Respondents were jointly and severally liable for negligence, which led to his alleged loss, failed to plead the particulars of the negligence and to prove the same. The learned counsel relied on certain superior decisions of the court to support the argument and to urge the court to hold that the Appellant alone had the legal and evidential burden of proving his entitlement to the reliefs he sought of which he failed woefully in discharging that burden.

DECISION OF THE COURT

In resolving the issue, the Court held that:

It is not in contention that both Respondents are bankers to the Appellant. The relationship between a customer and his bank is one of fiduciary. A bank therefore owes a customer a duty to exercise a high standard of care in the management of his money. 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 transactions in issue. The ATM card issued by a bank is akin to a cheque, which must be honoured 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 a 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 of the banks.

Issue resolved in favour of the Appellant.

P.A. Guzol, Esq., for the Appellant

Leo M. Ebi, Esq., for the 1st Respondent
L.E. Anyia, Esq., for the 2nd Respondent

This summary is fully reported at (2023) 7 CLRN in association with ALP NG & Co.

See www.clrndirect.com; www.alp.company