By Amaka Ezeno MCLArb
From the purport and the meaning of cases that are considered under the doctrine of lis pendens and the conditions that need to be satisfied before the doctrine is applied, I feel safe to say that the criminal cases which were pending against the Appellant upon which the Respondent placed restriction on the account of the Appellant does not come within cases where the doctrine can be applied.
The point I am making is that the argument of the Respondent’s counsel would not fly as there is no connection between the offences the Appellant is charged with and the situation on ground which will prejudice the outcome of the criminal cases. The subject matter in the criminal matter is not the money but rather the fact that the Appellant is alleged to have fraudulently converted or approved credit facility to some persons.
In other words, abusing his position as Executive Director. The outcome of the criminal trials will be conviction if the Appellant is found liable or guilty. The outcome of the criminal cases will in no wise affect the accounts as there is no nexus between the criminal cases and the accounts restricted..
It is my firm position that bearing in mind the subject matter of the case upon which the doctrine of lis pendens is applied, I make bold to say that the doctrine of lis pendens is not applicable in the matter. The subject matter is not covered by the doctrine.
The doctrine cannot apply as the deposits in the various accounts are not tied to the criminal charges. Even if I am wrong, the point still remains that the condition for the application of the doctrine does not exist in this matter. In the circumstance, I do not feel persuaded by the authority of Agwaramgbo vs. UBN (supra).
I will now address the specific issue raised in issue 1, which was whether the lower Court was right in its decision that the Respondent was right in refusing to honour Exhibits C, D, E and F mainly on the premise that there is a criminal charge against the Appellant.
The relationship between the Respondent and the Appellant which is customer/banker, Agent/Principal, debtor/creditor does not give the Respondent the power to deal with the account of the Appellant unilaterally without the consent and knowledge of the Appellant, the account holder.
The main exception is if there is a judicial intervention as was mentioned in the GT Bank vs. Adedamola (supra). The point must be made loud and clear that I am not aware of any law that permits the Respondent to unilaterally place restriction on the account of the Appellant without a Court order on the premise that there is a criminal matter of fraud etc against the Appellant.
The Respondent justified the action by saying it was prudent to avoid jeopardizing the outcome of the criminal matter. I really do not buy into that argument as I cannot see how the Appellant’s operation of the accounts will jeopardize the outcome of the criminal matters against the Appellant. Maybe, I am not seeing it the way the Respondent is seeing it, but really such an argument will not hold water with me.
In the first place, the point must be made that what is prudent may not be necessarily legal. Prudence is within the realm of morality which is not necessarily legality. A moral action may not necessarily be a legal action. The action of the Respondent could receive moral approval but definitely not legal approval.
An action receives legal approval because there is an enabling law that backs such an action. When morally an action is fine but there is no law backing such an action, the action will be illegal because morality and law are not synonymous. See Unity Bank Plc vs. Olatunji (2015) 5 NWLR (Pt. 1452) 203; Salisu & Ors. vs. Abubakar & Ors. (2014) LPELR-23075 (CA).
The question now is, what is the law upon which the Respondent placed the restriction order on the accounts of the Appellant. The Respondent is a bank and therefore an agent of the Appellant. The duty of the Respondent as banker and agent is to carry out the instructions of the Appellant on the accounts.
The Respondent has no right to unilaterally take any action adverse to the Appellant on the account without express or implied agreement of the Appellant. Where the Respondent does anything adverse to the interest of the Appellant on the accounts, this will be treated as breach of contract or duty.
The Respondent has a duty in law to honour or pay any demand made by the Appellant on the account domiciled with the Respondent provided the account is funded. This is a duty that the Respondent is obligated to perform failing which there are consequences. See Access Bank Plc vs. Maryland Finance Co and Consultancy Services (2005) 3 NWLR (Pt. 913) 460; First African Trust Bank Ltd. vs. Partnership Investment Coy Ltd. (2003) 18 NWLR (Pt. 851) 35.
The only two instances recognized by law upon which the Respondent will not be obligated to honour payment instructions from the Appellant are, if the account is not funded or there are other legitimate and legal reasons which the Respondent will adhere to.
The only legal reason which comes to mind is if there is a Court order which authorizes the Respondent to place a restriction on the account. The refusal of any bank to honour cheques or withdrawal instruction from an account on these two grounds is undefendable. Apart from these, a bank will be walking on dangerous grounds to refuse to honour a cheque from a customer on a funded account.
The Respondent should have done better than it did. It would have been better for the Respondent to err on the side of caution than to take the dangerous risk of unilaterally placing restriction on the account of the Appellant. The law has made it easy on how to secure such an order which is by way of an ex parte application. The Respondent was not properly advised in unilaterally placing a restriction on the accounts of the Appellant.
The Appellant apparently standing criminal charges but he has not been found guilty, he is as innocent as anyone and he has rights that must be protected. In fact, all through the period of the trial, he is innocent and all his rights are intact and can only be taken away by the order of a Court and not by the action of a person or organization. No matter how prudent that may appear it is lawless.
The Respondent should not jump the gun but allow the Court to carry out its function. The least the Respondent should have done was to have secured a Court order to place a restriction on the Appellant’s account. Not to have done that but to unilaterally place a restriction on the accounts of the Appellant is lawless. To allow such a lawless action that does not have any legal basis even for the best moral or prudent reasons in the world will create anarchy as banks or organizations if not checked will just for the worse of reason place restrictions on people’s account.
The Nigerian Court cannot encourage such an action and I certainly will not. The Respondent stepped out of line in unilaterally placing a restriction on the account of the Appellant which informed endorsing Exhibit C with the words ‘DAR’ and Exhibits D, E and F ‘POSTING DISALLOWED.’ The point I am laboring to make here is that the Respondent has no power under any law to unilaterally place a restriction on the account of the Appellant and therefore refused to honour Exhibits C, D, E and F. I make bold to say that the fact that there are criminal trials against the Appellant does not help the case of the Respondent.
I can even go further that the fact that the Appellant knew that his account has been placed under restriction before presenting Exhibits C, D, E and F is of no moment as it relates to this issue. The Respondent’s action is void ab initio.
The Appellant was looking for evidence hence he presented those Exhibits and he got evidence. Since the action of the Respondent is void ab initio, the Respondent has breached the duty of care and indeed the contractual obligation he has with the Appellant when he did not honour the cheque and the withdrawal forms. The lower Court was therefore wrong in holding that the Respondent was right and justified in refusing to pay the value on Exhibit C, D, E and F.
In the circumstance, I have no difficulty in resolving this issue in favour of the Appellant.
For what to do when in similar situation, consult your lawyer.
Amaka Ezeno, MCIArb.