When Pre-Judgment Interest In A Banker And Customer Relationship Claim Will Be Granted
When Pre-Judgment Interest In A Banker And Customer Relationship Claim Will Be Granted
When Pre-Judgment Interest In A Banker And Customer Relationship Claim Will Be Granted

In the Supreme Court of Nigeria; ON FRIDAY, 18TH DECEMBER, 2020; Suit No: SC.328/2012

Before Their Lordships: OLABODE RHODES-IVOUR, Justice of the Supreme Court, MUSA DATTIJO MUHAMMAD, Justice of the Supreme Court, KUDIRAT MOTONMORI, OLATOKUNBO KEKERE-EKUN, Justice of the Supreme Court, AMINA ADAMU AUGIE, Justice of the Supreme Court, EJEMBI EKO, Justice of the Supreme Court

Between BLESSING ISERAMENYA            – Appellant(s)




THE Appellant (Claimant at the trial Court) a customer of the Respondent was granted several facilities at the interest rate of between 21 per cent and 36 per cent, from   February 11,1998 to October13,1999. When it discovered that the bank imposed arbitrary and uncontracted interest rate charges on the said facilities, without the Appellant’s knowledge/consent, it engaged the services of a Financial Consultants to reconcile its accounts with the Respondent Bank after which it was revealed that there was a number of excess and unlawful interest charges on its two accounts.

The Appellant wrote letters of complaints to the Respondent and in reply the bank admitted it overcharged the Appellant’s accounts.

Sequel to this, the Appellant wrote several letters to the Respondent demanding payment and/or refund of all monies illegally appropriated from its accounts by the bank. However, the Respondent failed to comply. Thus, the Appellant instituted a suit at the High Court, wherein it sought a number of declaratory reliefs and damages.

During a pre-trial conference, the Respondent’s counsel admitted that “there are excess charges in the sum of N7,209,906.55” and the pre-trial Conference Judge, Oyebanji, J., entered Judgment for the Appellant in the sum of N7,290,966.55, admitted by the Respondent. The judge however failed to award interest to the Appellant. The Appellant filed a motion  on April 28, 2008 for award ofpre-judgment interest at the rate of 21 per cent per annum in respect of the Judgment of the Court in the sum of N7,209,906.55.

The judge dismissed the motion. Dissatisfied with the ruling, the Appellant appealed to the Court of Appeal. The Court of Appeal allowed the appeal in part; the Pre-Trial Conference Judgment was set aside. The Court of Appeal in line with Order 35 Rule 4 of the High Court of Lagos State (Civil Procedure Rules, 2004)and as empowered by Section 15 of the Court of Appeal Act, 2004, ordered the Respondent to pay post-judgment interest on the Judgment sum on N7,209, 906.55 at the rate of 10 per cent per annum with effect from May  25, 2009 when the Judgment sum was entered.

Still dissatisfied, the Appellant further appealed to the Supreme Court.

The Court of Appeal determined the appeal on the lone issue as follows:

Whether the Appellant is entitled to be awarded pre-Judgment interest on the admitted sum of N7,209, 906.55.


Appellant’s counsel contended that it is entitled to be awarded pre-judgment interest since it was claimed in its statement of claim, and also gave reasons for claiming the interest in paragraph 6 of its affidavit; beside the fact that it is a trading company and the relationship between the two parties that gave rise to this suit is purely commercial. Counsel cited President of India V. La Pintada Compania Navigacion S.A. (1984) 3 W.L.R 10 at 17; A.G. Ferrero & Co. Ltd V. Henkel Chemicals Nig. Ltd. (2011) 13 NWLR (Pt. 1265) 592 at 606, wherein Tabai, J.S.C., stated as follows:

“In purely commercial transactions, a party who holds on to the money of another for a long time without any justification and thus deprives that other of the use of such funds for the period should be liable to pay compensation by way of interests.”

Counsel argued that in so far as it pleaded interest at the rate of 21per cent per annum, and also averred in paragraph 6 of its affidavit that the Respondent claimed interest at the rate of 21per cent and 36percent per annum on the said facilities; and the Respondent admitted that it over deducted its account to the tune of N7,209,906.55, the Court of Appeal ought to have exercised its discretion to award pre-Judgment interest to it on the authority counsel cited.

Appellant’s counsel cited Agbakoba V. INEC (2008) 18 NWLR (Pt. 119) 489, and urged the Court to invoke its powers under Section 22 of the Supreme Court Act.

The Respondent’s counsel contended that the Appellant is not entitled to pre-Judgment interest because in its writ of summons and statement of claim, there was no specific claim of N7,209,906.55 as interest over change in any of the sub-head of claims upon which the award of pre-judgment interest could have been made, that there was no evidence establishing the various claims of pre-Judgment interest and what the rate of pre-judgment interest should be, and the basis for the rate.

Counsel submitted that it is only at the end of trial and upon proof by way of evidence that judgment in respect of a claim for pre-judgment interest could be awarded where it is established and that the Court of Appeal could not have so ordered in the absence of evidence in the record. That merely positing the claim for pre-judgment interest as stated in its pleading without proof does not entitle the Appellant to such an award.

In response to the Appellant’s submission on the interest claimed in the statement of claim, Respondent’s counsel citing Sani Abacha Foundation for Peace and Unity & Ors V. UBA Plc (2010) 17 NWLR (Pt. 1221) 192 at 207submitted that pleadings are mere averments which requires evidence on the Plaintiff’s part to prove the facts pleaded. That the Appellant is enjoined to lead evidence in proof of the facts pleaded in respect of the various claims of pre-judgment interest on the overcharge, as made out in its statement of claim.

The Court stated that pre-judgment is simply a judgment reached before evidence is available. That if the claim is for money, the Claimant may claim interest up until the date the judgment is given; that is pre-Judgment interest. The Court cited Berliet (Nig.) Ltd. V. Kachalla (1995) 9 NWLR (Pt. 420) 478 and mentioned that there is a clear difference between an award of interest pre-Judgment, where a Plaintiff must specifically claim such and prove it, and award of interest on a judgment-debt, which is purely statutory, and can only be awarded if there are provisions to that effect in the law or rules of Court.

Relying on Order 19 Rule 4 of the High Court of Lagos State (Civil Procedure) Rules, 2004, the Court stated that the Court does not have to wait to call witnesses before a decision is taken on a claim or counter claim where there is an application to do so as long as there is an admission of same. Citing Mosheshe General Merchant Ltd. V. Nig. Steel Products Ltd. (1987) 1 NSCC (Vol. 18) 502

The Court relying on Berende V. Usman (2005) 14 NWLR (944) 1 at 24 mentioned the trite position of the law stating that a claim for pre-Judgment interest may be made by a Plaintiff as of right, where it is expressly provided for in or is contemplated by the agreement between the parties or under a mercantile custom or under a principle of equity such as the breach of a fiduciary relationship.

The Court stated that there is a fiduciary relationship between the parties, which elicits a duty of care by the Respondent to the Appellant. That there is also a contractual banker customer relationship between the parties which imposes rights and duties on both of them. The case of Agbanelo V. UBN (2000) 7 NWLR (Pt. 666) 534was cited wherein Ayoola, J.S.C., aptly stated that “the Defendant’s duty to exercise reasonable care and skill in regard to its customer’s affairs is undoubted”

The Court mentioned that the Respondent did not controvert or challenge the averment in paragraph six of the Appellant’s Affidavit in support of motion for award on interest on Judgment Debt. The Court aligned with the Appellant that the law is clear that depositions in an affidavit that remain uncontroverted are accepted as true.

The Court posited that the depositions in the Appellant’s affidavit cannot be regarded as false because the Respondent admitted that it had over deducted or overcharged the Appellant’s accounts.

On the Respondent’s argument that it is only at the conclusion of trial and upon proof by way of evidence that judgment in respect of a claim for pre-judgment interest could be awarded; and that the Court of Appeal could not have ordered otherwise in the absence of evidence on record, the Apex Court relying on Mosheshe Gen. Merchant Ltd. V. Nig. Steel Products Ltd(1987) 2 NWLR (Pt. 55) 110 stated that the argument was misconceived.

The Court stated the trite position of law that what is admitted needs no further proof, that the Court of Appeal did accept the fact that the Respondent “admitted that it over deducted the Appellant’s account to the tune of N7,209,906.55″, the Court opined that this was sufficient to sway the Court of Appeal’s decision in the Appellant’s favour.

The Court stated that a banker-customer relationship is one that is founded on contract, with particular reference to commercial transactions.That where a bank presents itself as being professionally competent and skilled to execute certain obligations inherent in a commercial transaction, but eventually shirks that responsibility, this constitutes a prima facie act of negligence having failed in the duty of care that it primarily owed to its customer. Citing Linton Industrial Trading Co. (Nig.) Ltd. V. Central Bank (2013) LPELR-22036 (CA)

The Court opined that if the Court of Appeal had addressed its mind to the fact that the Respondent failed in its duty to handle the Appellant’s accounts with the competence and skill expected of a bank, then it would have arrived at a different conclusion. That the Respondent indicted itself when it admitted that it over deducted or overcharged the Appellant’s accounts to the tune of N7,209,906.55.

Finally, the Court held that the Appellant was entitled to an award of pre-Judgment interest because the Respondent by over deducting the admitted sum of N7,209,906.55 from its accounts, breached its contract with the Appellant, and failed in its duty to protect the money and interests of the Appellant with reasonable care and skill.

On the whole, the appeal was allowed. The Court set aside the decision of the Court of Appeal on pre-Judgment interest and entered an order that the Respondent pay the Appellant Pre-Judgment interest claimed on the Judgment sum, N7,209,906.55, at the rate of 21 per cent per annum from 18/3/2002 till 7/12/2006, when the Judgment sum was entered.





MATTHEW ESONANJOR, ESQ.                                                                       

For Respondent(s)
Compiled by LawPavilion

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