UNION BANK OF NIGERIA PLC V. PRINCE NWOKOCHA EZIKPE & ANOR (2017)

Background

This appeal arose from the judgment of the High Court of Lagos State in Suit No. LD/1092/2008, delivered on 17 April 2013. The High Court entered judgment for the respondents in the sum of US$217,381.05 against Union Bank of Nigeria Plc. The respondents were involved in the importation and distribution of goods and maintained a current account with the appellant. Between 1982 and 1983, they instructed the bank to arrange the remittance of foreign exchange to their overseas suppliers and business associates. In accordance with the foreign-exchange system applicable at the time, the bank debited the naira equivalent of the amount from the respondents’ account and was expected to remit the funds to the Central Bank of Nigeria for onward transfer.

The overseas suppliers later informed the respondents that they had not received the money. The bank allegedly represented that the matter was being investigated and that the respondents should exercise patience. The respondents maintained that it was only in 2005, following further enquiries and correspondence, that they discovered that the bank could not produce evidence showing that the money had actually been remitted to the Central Bank. After the bank failed to refund the money, the respondents commenced proceedings in 2008, claiming the amount as money had and received.

The bank defended the action on the grounds that it was statute-barred because the relevant transactions occurred in 1982–1983. It also contended that the funds had eventually been dealt with through a refinancing exercise involving the Central Bank and the Debt Management Office, and that the overseas suppliers had received the benefit of the transactions.

Issues

1. Whether the respondents’ cause of action accrued in 1983, when they first learned that their overseas suppliers had not received the money, or in 2005, when they allegedly discovered that the appellant had not remitted the funds to the Central Bank.
2. Whether the action commenced in 2008 was statute-barred under section 8 of the Limitation Law of Lagos State.
3. Whether the appellant’s evidence concerning refinancing and payment to the overseas suppliers was inadmissible hearsay.
4. Whether the respondents proved their entitlement to judgment for US$217,381.05.

Ratio Decidendi

The Court of Appeal held that a limitation objection challenges the jurisdiction of the court because a statute-barred claim is not maintainable. In determining limitation, the court ordinarily examines the claimant’s writ of summons and statement of claim to identify when the cause of action accrued, compares that date with the date of commencement of the action, and applies the period prescribed by the relevant statute. Oral evidence or a statement of defence is generally unnecessary for that preliminary determination.

A cause of action consists of the aggregate of facts which, if proved, entitle a claimant to a remedy. It arises when all material facts necessary to establish the right to relief have occurred. Although the respondents were informed in 1983 that their suppliers had not received the money, the evidence showed that the appellant continued to assure them that the remittance was being processed and that it was investigating the matter. The material fact giving rise to a definite claim against the bank was established in 2005, when the respondents obtained information indicating that the money had not been remitted to the Central Bank and the bank could not provide proof of remittance. Since the action was filed in 2008, it fell within the six-year limitation period.

The court further held that evidence of an out-of-court statement tendered to prove the truth of its contents is hearsay and is inadmissible unless an established exception applies. Although business records may be proved by an employee or agent of the relevant business, the witness must be speaking to records of the business he represents. An employee of Union Bank could not establish the truth of records or statements generated by the Central Bank or Debt Management Office merely by tendering them.

Court Findings

The Court found that the appellant failed to produce bank entries, correspondence, transfer records, or other documentary evidence tracing the money from the respondents’ account to the Central Bank. The testimony of the appellant’s witness concerning what officials of the Central Bank or Debt Management Office had allegedly told him was hearsay. Exhibits D3 and D5 could prove only that the documents existed or that the statements had been made; they could not prove the truth of the alleged refinancing, issuance of promissory notes, or eventual payment to the respondents’ suppliers.

The burden of proving that the money was remitted rested on the appellant because it asserted that affirmative fact. The respondents were not required, in the circumstances, to prove that they subsequently paid their foreign suppliers. Their claim was founded on the bank’s failure to account for or return money debited from their account. The appellant’s failure to discharge its evidential burden justified the trial court’s judgment.

Conclusion

The appeal was dismissed for lacking merit. The judgment of the High Court of Lagos State awarding the respondents US$217,381.05 was affirmed. The parties were ordered to bear their own costs.

Significance

The decision reinforces the principle that limitation periods begin when a complete and enforceable cause of action arises, not necessarily when the earliest related transaction occurred. It also illustrates the importance of examining the claimant’s pleadings when determining limitation and confirms that a bank seeking to rely on an alleged remittance must produce reliable, admissible evidence from its own records or from competent witnesses. The ruling provides useful guidance on the limits of the business-record exception to the hearsay rule and on the evidential responsibilities of banks handling customer funds.