A duty of care refers to a legal obligation to take reasonable steps, skill, and prudence to avoid bringing foreseeable harm to another person or his property. This position of the law has been adumbrated in the landmark decision in Donoghue v Stevenson (1932) AC 562.
With regards to Banker customer relationship, there is no doubt that this is founded on good faith and trust whereby the banks as professional managers of funds and commercial keepers of money undertake to keep in safe custody any money or other valuables their customers may keep with them and the onus remains on them to fulfill that promise as well as promptly comply with lawful instructions of their customers with regards to money kept in the Bank.
This places a duty of care on the banks, because of the fiduciary nature of the relationship which imposes on the banks the duty to exercise utmost care, good faith and prudence in managing the monies in the customer’s account as well as honouring the account holder’s lawful instructions.
Indeed, there is a minimum duty of care expected of any bank in Nigeria to the customer and this involves application of reasonable care and skill in carrying out the customer’s lawful instructions. The courts have in plethora of cases given eloquent expression to this settled position of the law.
For instance, In DIAMOND BANK LIMITED v. MOCOK ONU NIGERIA LIMITED (2019) LPELR-46440(CA), the court of Appeal reaffirmed the duty of care owed by all commercial banks in Nigeria to their customers thus “The relationship between the appellant and the respondent is discernable from the averments in paragraphs 2 and 3 of the statement of claim as well as paragraph 2 of the statement of defence. By the combined effect of the said averments, the respondent maintained a current account with the appellant, a registered commercial bank. The nature of such relationship has been given recognition in plethora of judicial decisions that it involves specie of contract with special usages with particular reference to monetary or commercial transactions. Consequently, a banker has a duty under its contract with its customer to exercise reasonable care and skills in carrying out its part with regards to transactions in its contract with its customers.
The Banker’s duty to exercise reasonable care and skills stretches over the whole range of banking business within the ambit of the contract with the customer. This duty applies to interpreting, ascertaining and acting in accordance with the instruction of the customer. See N.N.B. LTD V ODIASE (1993) 8 NWLR (pt 310) 235, FIRST BANK OF NIGERIA LTD V AFRICAN PETROLEUM LTD (1996) 4 NWLR (pt 443) 438, U. B. A. V FOLARIN (2003) 7 NWLR (pt 818) 18, AGBANELO V UNION BANK PLC (2000) 7 NWLR (pt 666) 534 and LINTON INDUSTRIES.TRADING CO. (NIG) LTD V C.B.N. (2015) 4 NWLR (pt. 1447) 94.”
Similarly, in the case of Union Bank plc v N.M. Okpara Chimaeze (2014) LPELR-22699 sc., the Supreme Court of Nigeria held, “the appellant (bank) 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”
Again,in DIAMOND BANK LIMITED V. PARTNERSHIP INVESMENT LIMITED & ANOR (2009) LPELR- 939(SC),the apex court maintained that … “a Bank has a duty to exercise reasonable care and skill in carrying out its customer’s instructions. That this duty extends over the whole range of banking business within the contract with the customer.”
A breach of this duty of care is highly frowned at by the law as such breach imposes liability on the bank.
Thus in GUARANTY TRUST BANK v. CHIEF DOTUN OYEWOLE & ANOR (2013) LPELR-22166(CA), the court of Appeal Per DONGBAN-MENSEM,J.C.A (Pp. 10-11 para.E) held “By the state of pleadings of both parties, it is not disputed that 1st Respondent is an account holder with the Appellant which issued the 1st Respondent Account number 421/421752/110. This fact alone establishes a fiduciary relationship which thereby elicits a duty of care by the Appellant to the 1st Respondent. A breach of such a duty of care imposes a liability for negligence on the bank (The Appellant). (See Afribank Nig. Plc v. A. I. Investment Ltd (2002) 7 NWLR (Pt.765) 40, Agbanelo v. UBN Ltd (2000) 23 WRN 1, Ndoma-Egba v. A.C.B. (2005) 7 SC (Pt.111) 27.”
Elucidating on the consequences of bank’s breach of duty of care to customers, the court of Appeal in the case of CHIEF JOSEPH OLUWOLE ODULATE v. FIRST BANK NIGERIA LIMITED (2019) LPELR-47353(CA), maintained that “It is true in law and in fact to state that Banks owe their customers a duty of care. Banks are professional and commercial keepers of money who have represented that they would keep in safe custody any money or other valuables their customers may keep with them. The law holds them to that promise and also expects Banks to promptly comply with lawful instructions of their customers with regards to money kept in the Bank’s custody…”
In ZENITH BANK v. ATO PROPERTIES LTD (2019) LPELR-47783(CA), the supreme court held ; …” when it comes to the relationship between a bank and its customer, or whoever is having dealings with a bank in connection with his funds with the bank, it is settled law that generally a Bank in its dealings with its customers owes to them a duty of care and thus negligence if proved is a ground for liability against a Bank by its customer. It follows therefore, that between the Appellant, a Bank and its customer, the Respondent, negligence will arise where the bank, breaches the implied duty to observe the standard expected of a reasonable banker in respect of dealings with the customer’s fund and the onus, of proving that it is not negligent lies on the Appellant, the Bank.”
From the foregoing sagacious and illuminating judgments of our superior courts, it is crystal clear that a bank’s breach of duty of care to the customer attracts punishment including compensation to the aggrieved customer(s)
All the customer needs to show is the fact that he is an account holder with the bank and the onus of proving that it is not negligent in dealing with the ustomer’s fund lies on the Bank.
Any aggrieved customer has a right to remedy once a dereliction of duty of care has been established against the bank. The courts are very accessible to such aggrieved customers and it is advised that the services of a legal practitioner should be sought by and obtained by the customer for necessary steps towards ventilation of his grievances.
