The Supreme Court, in the case of Isiyaku vs United Bank for Africa Plc (2026) 6 NWLR (Pt. 2039) 327, SC, held that the award of aggravated and/or punitive damages by the trial Court was firmly grounded in law and evidence.
The decision was based on the finding that the Respondent gravely breached its fiduciary and contractual duties by unjustifiably and persistently denying the Appellant access to his funds, thereby causing severe and prolonged hardship to him and his dependants.
The Supreme Court noted that the Respondent’s conduct was not only negligent but also oppressive and demonstrated a reckless disregard for the Appellant’s rights, thus justifying the award of aggravated and punitive damages to compensate for the enhanced suffering, punish the wrongdoing, and deter similar conduct, placing reliance on the cases of Odiba vs. Azege (1998) LPELR-2215 (SC); G.K.F. Investment (Nig) Ltd. vs. NITEL Plc (2009) LPELR-1294 (SC) and Odiba & Anor. vs. Muemue (1999) LPELR-2216 (SC).
The issue of punitive damages in banking relationships has also been considered in Bernard & Anor. vs. First City Monument Bank Ltd. (2022) LCN/16024(CA).
Issue: Whether the act of a Bank wrongly restricting the operation of a customer’s account is of the magnitude to warrant the award of punitive or exemplary damages by the Court against it.
The Court held: “Upon a proper review of the pleadings and evidence led, the lower Court had, notwithstanding its finding and expunging the evidence of PW1, still held that on the evidence of the Respondent alone it was established that the Respondent, a Banker was under a contractual relationship with the Appellants as its Customers, failed to exercise reasonable care and skill with regards to the Appellant and was therefore, in breach of its contract with the Appellants.
It then awarded general damages of N100,000. 00 against the Respondent in favour of the Appellant for the breach of contractual obligations with the Appellants. There is no appeal against this finding and the award of general damages by the lower Court. This is understandably so because in law there is no duty on the Respondent to breach its contractual relationship of Banker-Customer with the Appellants in obedience to either an unlawful order and or instruction or an order of questionable existence, and therefore, such misplaced and or purported obedience is not a justification in law for a wrongful act in law. See G.T. Bank Plc V. Adedamola (2019) 5 NWLR (Pt. 1664) 30 at p. 43, where it was held inter alia thus: “Before freezing a customer’s account or placing any form of restrain on any bank account, a bank must be satisfied that there is an Order of Court.”
See also Zenith Bank Plc V. Yusuf Waili (2022) LPELR-57349 (CA), per Sir Biobele Abraham Georgewill, JCA.
The lower Court was therefore, right when it held that the relationship between the Respondent and the Appellants was that of a Banker-Customer and thus contractual in nature, a breach of which may lead to damages as it is the duty of the Respondent, the Bank to exercise reasonable care and skill in dealing with the account of the Appellants, its customer. See Agbanelo V. UBN (2000) 4 SC (Pt. 1) 233 at p. 24, where the Supreme Court had stated firmly and with finality inter alia thus: “The Defendant’s duty to exercise reasonable care and skill in regards to the customers affairs is undoubted…A Bank has a duty under its contract with the Customer to exercise reasonable care and skill in carrying out its part with regards to operations within its contract with its Customers. The duty to exercise reasonable care and skill extends over the whole range of banking business within the contract with the Customer.”
See also Zenith Bank Plc V. Yusuf Waili (2022) LPELR-57349 (CA), per Sir Biobele Abraham Georgewill, JCA; Allied Bank (Nig) Limited V. Akubueze (1997) 6 NWLR (Pt. 509) 374; Union Bank of Nigeria Limited V. Nwoye (1996) 3 NWLR (Pt. 435) 135; Guaranty Trust Bank Plc V. Odeyemi Oluyinka Joshua (2021) LPELR-53173 (CA), per Abiriyi, JCA.
My Lords, the only issue is therefore, whether the lower Court was right or wrong when it declined and or refused to award punitive or exemplary damages against the Respondent in favour of the Appellants? The Appellants had vehemently contended that the lower Court was wrong when it refused to grant their proved claim for punitive or exemplary damages against the Respondent.
In response, the Respondent had equally vehemently contended that there was no basis for the award of punitive or exemplary damages against the Respondent in favour of the Appellants.
So, what is exemplary or punitive damages and when in law should it be granted by the Court? In law, exemplary or punitive damages, as the name implies, are damages on an increased scale over and above special or actual or ordinary damages. It is only awarded in aggravated circumstances and are thus, punitive in nature to address proven acts of recklessness. Thus, damages are ‘punitive’ or ‘exemplary’ when they are awarded by way of punishment of the Defendant, or as a deterrent and are for atonment for the Claimant’s loss. In GKF Investment Nigeria Ltd. V.
Nigeria Telecommunications Limited (2009) 13 NWLR (Pt. 1164) 344 at p. 377, the Supreme Court per Ogbuagu, JSC, had stated inter alia thus: “Exemplary, punitive, vindictive or aggravated damages where claimed, are usually awarded whenever the Defendant’s conduct is sufficiently outrageous to merit punishment as where for instance, it discloses malice, fraud, cruelty, insolence or flagrant disregard of the law and the like.”
See also GKF Investment Nigeria Ltd. V. Nigeria Telecommunications Limited (2009) 13 NWLR (Pt. 1164) 344 at p. 377 per Niki Tobi, JSC.
In law, therefore, punitive or exemplary damages are damages awarded in addition to actual damages when the Defendant had acted with recklessness, malice, or deceit. They are specific damages by way of penalizing the wrongdoer or making an example to others. What then is the purpose of punitive damages? In Anthony Odiba V. Tule Azege (1998) LPELR-2215 (SC) at p. 15, the Supreme Court per Mohammed, JSC, had stated as follows: “The primary object of an award of damages is to compensate the plaintiff for the harm done to him or a possible secondary object is to punish the defendant for his conduct in inflicting that harm. Such a secondary object can be achieved by awarding, in addition to the normal compensatory damages, damages which go by various names to wit: exemplary damages, punitive damages, vindictive damages, even retributory damages and comes into play whenever the defendant’s conduct is sufficiently outrageous to merit punishment as where it discloses malice, fraud, cruelty, insolence, flagrant disregard of the law and the like.”
See also First Bank of Nigeria Plc & Ors. V. Boniface Chukwu (2018) LPELR-45148 (CA) per Oredola, JCA.
What then in law would amount to a reckless conduct? The word ‘reckless’ is defined as characterized by the creation of substantial and unjustifiable risk of harm to others and by a conscious, and sometimes deliberate, disregard for or indifference to that risk, heedless, rash. On its part, the word ‘heedless’ as one of the elements of recklessness, is defined as the quality of being thoughtless and inconsiderate, especially conduct whereby the person acting disregards the rights or safety of others. It is often construed to involve the same degree of fault as recklessness. See the Black’s Law Dictionary, Eight Edition at pages 740 and 1298.
My Lords, having considered the entire pleadings and evidence led in the circumstances as well as the unchallenged findings of the lower Court, I cannot but agree completely with the submission of learned counsel for the Respondent, a submission I find as not only apt but also unassailable, that on the totality of the averments in the pleadings and evidence led, as in the Record of Appeal, the Appellants who claimed punitive or exemplary damages failed woefully to show that the Respondent’s conduct was sufficiently outrageous or reckless to warrant an award of punitive and or exemplary damages as was rightly held by the lower Court.
The entirety of the evidence led by the Appellants also failed to disclose any malice in the conduct of the Respondent against the Appellants. I therefore, agree with the lower Court that the act of placing a restriction on the operation of the Appellants’ account though wrong and amounted to a breach of the contract of banker-customer relationship between the Respondent and the Appellants, and thus deserving of some form of damages, but it was not such a conduct as could be regarded as reckless or high handed and or of the magnitude to warrant the award of punitive and or exemplary damages against the Respondent. See Baker Marine Nig. Ltd. V. Chevron Nig. Ltd. (2006) LPELR-715 (SC) at p. 13. See also GKF Investment Nigeria Ltd. V. Nigeria Telecommunications Limited (2009) 13 NWLR (Pt. 1164) 344 at p. 377; Anthony Odiba V. Tule Azege (1998) LPELR-2215 (SC) at p. 15; First Bank of Nigeria Plc & Ors. V. Boniface Chukwu (2018) LPELR-45148 (CA).
In the light of all I have stated and held as above, the sole issue for determination is hereby resolved against the Appellants in favor of the Respondent.” Per GEORGEWILL, JCA.
