Barclays Bank Zambia PLc v Patricia Leah Chatta Chipepa (APPEAL NO.131/2014; SCZ/8/125/2014; SELECTED JUDGMENT NO. 16 OF 2017) [2017] ZMSC 314 (20 April 2017)

n ) (, i,/ L,n I ·VV--}" (A-.~ S j-v},-"v\ ~iJ ~{ ( v---_,,/J.-- SELECTED JUDGMENT NO.16 OF 2017 P. S22 IN THE SUJ.>REME COURT FOR ZAMBIA SCZ/8/125/2014 HOLDEN A'r KABWE (CIVIL JURISDICTION) BETWEEN: APPEAL NO.131/2014 · .-2>-c(lCfU~' BARCLAYS BANK ZAMBIA PLC APPELLANT AND PATRICIA LEAH CHATTA CHIPEPA RESPONDENT Coram Mwanamwambwa DCJ, Kabuka and Mutuna, JJS On 4th April 2017 and on 20th April 2017 For the· Appellant Mr. R. Mukuka of Messrs Robert and Partners For the Respondent N/A -JUDGMENT Mutuna JS, delivered the Judgment of the Court. Cases referred to: 1) Foley v Hill (1848) 2 HLC 28, 9 ER 1002 2) Tai Hing Cocton Mill Ltd v Liu Chong Hing Bank Limited (1986) AC so 3) London Joint Stock Bank Ltd v Macmillan (1918) AC 777 4) Greenwood v Martius Bank Ltd (1933) AC 51 5) Sithole v The State Lotteries Board (1975) ZR 140 J2 P.523 6) Sibongo v Shankanga (1969) ZR 149 7) Sichula & another v Chewe SCZ Judgment No.8 of 2000 8) Zambian National Commercial Bank Plc v Rosemary Bwalya T / A Lynette Guest House SCZ judgment No.25 of 2011 9) Georgina Mutale (T / A G. M. Manufacturers Limited v Zambia National Building Society (2000) ZR 19 10) 11} Collet v Van Zyl Bros Ltd (1966) ZR 65 Barclays Bank Ltd v W. J. Simms Son and Cooke (Southern} Ltd and another (1980) 2 WLR 218 12) David Chiyengele and Others v Scaw Limited SCZ Judgment No.2 of 2017 Other authorities referred to: 1) Paget's law of Banking, 11th edition by Mark Hapgood QC, Butterworths, London 2) Halbury's Laws of England, volume 48, by Lord Mackay oi Clashfern 5th Edition, Le:x:is Nexis 3) Judgment Act, Cap 81 The concept of credit and debit card transactions is fairly new to the Zambian market. For a long time our economy was a cash economy with most transactions being concluded by cash. The few exceptions were those transactions involving cheques, bank drafts and money J3 P.524 orders, to mention but a few. Despite this, certain business entities such as hotels and airlines accepted credit and debit cards issued by foreign banks. The issue that confronts us in this appeal arises from a debit card transaction effected by the Respondent through a local bank, the Appellant in this matter. It is, therefore, a novel issue involving Electronic Funds Transfer at Point of Sale known by the acronym, EFTPOS. Th~ background is that the Respondent opened a bank account with the Appellant and was availed a debit card. On 10th ~July 2010, she purchased an air ticket from Kenya Airways in the sum of K3,471.50, using the debit card and on 13th July 2010, her account held with the Appellant was debited with the amount of the transaction. Later, on 12th August 2010, a similar amount was debited P.525 from the Respondent's account suggesting that the Respondent had purchased another air ticket from Kenya Airways. This prompted the Respondent to approach the Appellant to ascertain the basis upon which it had effected the second debit on her account. The Appellant1s representatives assured the Respondent that they would investigate and report back to her. Prior to the resolution of the anomaly, the Respondent left the country and the representatives of the Appellant continued to deal with her husband. They carried out investigations and were informed by a representative of Kenya Airways that the airline's debit card machine had a fault and had on occasions debited clients twice. As a consequence of this, Kenya Airways was willing to refund the Respondent the amount wrongly debited from her account as long as she presented to the airline a copy of JS P.526 the original ticket purchased in ,July and her passport to show that she had travelled to Kenya. This information was communicated to the Respondcnt 1s husband. Before the second debit on the Respondent's account was effected, her account was overdrawn and was, therefore, incurring interest charges agreed upon by the parties. These charges increased when the second debit was effected notwithstanding that her account continued to receive deposits by way of bank transfers. The Appellant was later prompted to close the account without prior notice to the Respondent. This appears to have aggrieved the Respondent. She took out an action in the I-Iigh Court against the Appellant, claiming the following relief: 1) A declaration that the purported debit to the Plaintiffs account of Kwacha three million four hundred and seventy one thousand and fifty (K3,471.50) on 10th August, 2010 was without authority and of no effect; J6 P.527 2) A declaration that interest charged to the Plaintiffs account on the sum of Kwacha three million four hundred and seventy one thousand and fifty (K3,471.50) to the tune of Kwacha six hundred and fifty one thousand eight hundred and seventy eight three ngwee (K651,878,03) was without basis and of no effect; 3) Damages; 4) Interest on the sums due under claims 1, 2 and 3 at the contractual rate applicable to the said account; 5) Any other relief that the court may deem fit; 6) Costs. The parties appeared before the High Court and presented their evidence and arguments. The Respondent's evidence recounted how she had purchased the air ticket at Kenya Airways using her debit card issued by the Appellant and how the amount paid for the ticket was debited from her account. Later she got a statement from the bank and discovered that a like amount had been debited once again from her account and that she had a debit balance. She called the Appellant to find out why the second debit had been done despite the fact that she had not purchased J7 P.528 another ticket and was not given a satisfactory explanation by the Appellant's officials. The evidence concluded by revealing that when the Respondent u sed her debit card to purchase the air ticket she had entered her PIN on the pad of the d ebit card machine. The Appellant's evide nce recounted the events leading up to the purchase of the air ticket by the Respondent and the two debits effected to her account. It also explained the working of EFTPOS and the effect of a card holder entering a PIN on the pad of the debit card m achine as granting authority to a bank to d ebit the card holder's a ccount. The evidence als o revealed t he inves tigations conducte d by representatives of the Appellant with res pect to the second debit which indicated that the debit c ard J8 P.529 machine at Kenya Airways was faulty and had been debiting clients twice. It concluded by revealing that the results of the investigations were communicated to the Respondent who was encouraged to call at Kenya Airways with a copy of the air ticket she had purchased and passport for purposes of getting a refund . After the Learned High Court Judge heard the matter she acknowledged the evidence tendered by the Appellanf s witness that the second debit from the Respondent's account arose from a malfunctioning of the debit card machine at Kenya Airways. She then identified the issue for determination as being, whether, in view of the banker customer relationship that existed between the Appellant and Respondent, the debits and the charging of interest and com1nissions effected on the Respondent's account leading to its eventual closure were justified. The Learned J9 P.530 I-Iigh Court J 'udge went on to find that the relationship that existed between the Appellant and Respondent was the banker/ customer relationship which was governed by the principles of the law of contract. This being the case, she opined that, the rights and obligations of the two parties arose out of the express and implied terms of their relationship . She found further that the nature of the relationship between a banker and customer is that of a d ebtor a nd creditor. As such, banks are allowed to treat m oneys deposited with them as their own m.oney and their only obligation is to pay to the custom er an equivalent amount on demand. She relied on the cas e of Foley v Hill 1 in making the foregoing finding. Having identified the relationship between the parties and its effect, the Learned High Court J udge then went on a journey of analyzing the history of the Respondents ' JlO P.531 account by looking at the bank statements. She found that the Appellant performed its obligations to the Respondent because it accepted deposits of money from the Respondent and also paid out whatever amounts the Respondent d emanded. According to her, these transactions led to the account going into a negative balance b ecause the Appellant allowed the Res pondent to withdraw moneys on two occasions which were in excess of the balance held to h er credit. She found that the Appellant allowed the overdraft situation, notwithstanding, the fact that ther e was no agreement between the parties to that effect. Further that since the Respondent derived a benefit from the overdrawn position of her account it was in order for the Appellant to levy an agreed monthly fee of KlS0.00 . The Learned High Court Judge went on to find that the problem on the Respondenfs a ccount arose on 12th Jll P. 53 2 August 2010 when the Appellant allowed the s econd debit of K3, 4 71. 50 to be made to the account. She, in t his regard, found that there was s om ething s eriously w r ong in the Appellant's syste1n which, if it had been corrected, would have made t he litigation in the matter unnecessary. She found that the Appellant was neglige nt b ecaus e it did not properly check the transactions on the Respondent's account to ensure that t hey were authorized. The Learned High Court Judge dismissed th e Appellant's contention that there is a c·ontr a ctu al duty on the part of the cus tomer to exercise r eason a ble intern a l controls t o prevent forged cheques b eing presented to a bank. This, she found is in line with the · decision in the case of Tai Hing Cocton Mill Ltd v Liu Chong Hing Bank Limited2 . S h e found further that in accordance with the decisions in the cases of London Joint Stock Bank Ltd v Macmillan3 a nd J12 P.533 Greenwood v Martius Bank Ltd4 ) a customer 1s implied duties are li1nited to excrc1s1ng reasonable care executing written orders, such as cheques, so as not to mislead the bank or facilitate forgery and to notify the bank of forgeries which the customer becomes aware of. The Learned High Court Judge concluded that there was no evidence to show that the Respondent breached her duty to the Appellant. She further refused to accept the argument by the Appellant that once a customer had given his PIN or signature to a retailer, then he is at the mercy of retailer. Her finding was that banks, such as the Appe.llant, have a duty of care and skill to protect their customers from unwarranted and unauthorized withdrawals. She endorsed the opinion expressed by the learned authors J. Wadsley and G. A. Penn in The Law Relating to Domestic Banking that where the bank has paid without J13 P.534 the customer's mandate, it 1s not entitled to debit the customer's account. In justifying her findings, the Learned High Court Judge took the position that the use of credit cards is governed by three contracts which are autonomous. These are between: the card issuer (usually a bank) and the card holder (debtor); the card holder and the retailer; and, the issuer and the retailer. Further that the relationship between the two parties was that of card issuer and card holder, that is to say, b anker and customer. The Learned High Court Judge also formed the opinion that there was another relationship falling under the second category of card holder and retailer pursuant to which there was one transaction authorized by the Re spondent on 13th July 2010. Tha t, following the debiting J14 P.535 of the Respondent's account, the said transaction was concluded because the Respondent had performed her obligations under the con tract. As a consequence of this, the act of debiting the . Respondent's account a second time by Kenya Airways was illegal and ought not to have been allowed by the Appellant. She also took the view that the Appellant ought to have pursued Kenya Airways for the moneys wrongly debited from the Respondenfs account. That it was not the Respondent's duty to do so because she had been wrongly debited the amount. In regard to closure of the Respondent's account by the Appellant, the Learned High Court Judge found that the Appellant was not justified in closing the Respondent's account without giving notice. She once again relied on the case of Foley v Hill1 . She also considered the Appellant's contention that the Respondent had an obligation to J15 P.536 frequently check h er bank statements to ensure that there were no unauthorized de bits and dismissed it. In doing so she relied on the Tai Hing case. Having found in favour of the Respondent, the Learned High Court Judge ordered the Appellant to reopen the Respondent's bank account and adjust the am.aunts therein back to the position the account was in prior to the second debit. She also award ed the Respondent damages to be assessed by the Learned Deputy Registrar and costs, to be taxed in default of agreement. Following delivery of the judgment by the court below the Appellant expressed its displeasure with the decision by launching this appeal on eight grounds as follows: 1) The court below erred in making a declaratory order(s) under the circumstances of this case in light of the law that declaratory orders should not only be granted in certain circumstances (sic); J15 P.537 2) The court below erred in fact and law in determining that the Appellant was negligent on the 12th August 2010 as a result of having paid the sum of ZMW3,471.50 without the mandate of the Respondent and such payment was of no effect and that the manner of working of the visa system was inconsequential, on the facts of this matter, after establishing that the said disputed transaction was done through EFTPOS (Electronic Funds Transfer At Point of Sale) at Kenya Airways; 3) The court below was wrong in fact and law in not having ordered that the Respondent pursues Kenya Airways for refund based on the relationship of card holder(Respondent) and Retailer (Kenya Airways) in the wake of incontrovertible evidence that Kenya Airways, the beneficiary of the debited sum of ZMW3,471.50, had not refunded the Respondent; 4) The court below erred in fact and in law in determining that duties of a bank customer such as the Respondent in cases of electronic transfer of funds through visa cards does not go beyond the duties laid out in the 1918 case of London Joint Stock Bank Limited v Macmillan 11918) AC 77 and 1833 case of Greenwood v Martius Bank Limited (1933) AC 51; 5) The finding of the court below that there was no overdraft arrangement touching the Respondent's account number 103455 flew in the teeth of evidence; 6) The court erred in fact and law in determining that the closure of the Respondent 1s account which had been established as dormant was wrong and illegal and should be opened; 7) The court below erred in law in determining interest payable in the manner it was done in the wake of the Judgment Act, Cap 81 of the Laws of Zambia; J17 P. 538 8) The court below erred in fact and law in awarding costs to the Respondent on the facts of this case. Prior t o the h earing of the appeal the Appellant filed heads of arguments which it r elied upon at the hearing of the appeal a nd a u gmented with viva voce a r guments. The Respondent did n ot file h eads of a rgument and did not a ttend the hearing. We, nonetheless proceeded w ith the hearing because there was sufficient evid en ce on t h e r ecord to show that her couns el had b een served with the record of appeal, heads of argument and indeed the cause list and notice of hearing. In r ega rd to ground 1 the App ellants argumen ts 'iArere : in relation to claims 1 and 2 in t h e stat ement of claim in which the Respondent s ought d eclarations that the debiting of her account in the second sum of K3,471.50 and charging of interest of K65 l.87 were of n o effect. Counsel for the Appellant, Mr. R. Mukuka took the position J18 P.539 that the Learned High Court Judge rnisdirected herself when she granted the declaratory orders because a declaratory order is discretionary and can only be granted where the person seeking it does not have soiled hands. He relied on the case of Sithole v The State IJotteries Board5 where we held that "the 1--Iigh Court has power to give a declaratory judgment) but the power is a discretionary one. The discretion should be exercised with care and caution and judicially. In particular the court will not make a declaratory judgment where an adequate alternative remedy is available. 11 Counsel argued that there was an alternative and adequate remedy available to the Respondent being, pursuing Kenya Airways. As such, the Learned High Court Judge ought not to have granted the two declaratory orders. P.540 Mr. Mukuka also contended that the refusal by the Respondent to pursue Kenya Airways amounted to soiling her hands thereby shutting the doors to a declaratory order further. Reliance was made on the High Court decision of Sibongo v Shankanga6 . Grounds 2 and 4 vvere argued together and in doing so Mr. Mukuka questioned the following findings of fact by the Learned High Court Judge: that the Appellant debited the Respondents account without authority and that the Respondent's consent was required; the Appellant did not exercise reasonable care and skill when it effected the second debit; the Appellant should not have allowed the second transaction to go through; and that there was sornething seriously wrong in the operations of the Appellant. According to Mr. Mukuka these findings of fact were flawed because the Respondent did not allege J20 P.54 l negligence on the part of the Appellant in her pleadings nor was evidence of negligence led. Further, the Respondent did not lead any evidence alleging breach of a particular duty of care and skill on the part of the Appellant. He also contended that the Learned High Court Judge treated the case as one of fraud when there was no fraud pleaded or evidence led, but he did, however, concede that there was an obligation on the part of the Appellant to act with care and skill in dealing with the Respondent's account. The view taken by Mr. Mukuka was that the issue that the court below ought to have considered is what constitutes 11the customer's mandate 11 1n visa card transactions. He explained that the use of a card and insertion of a PIN in a credit card machine by a customer, in and of itself, constitutes a mandate to a bank to pay. This, it was contended, is the position because the use of a J21 P. 542 card and PIN is synonymous to a customer using cas h a nd as such) there is an obligation placed upon the customer to ensure proper use of the c ard. We were, a t this point, invited to con sid er the evidence given by the Appellant'·s sole witness in the court below expla ining the effect of, and procedure in EFfPOS transactions. Mr. Mukuka concluded that it was a misdirection on the part of the Learned High Court Judge to compa re a bank's mandate arising from a credit card tra nsa ction to that arising from a cheque transaction. Consequently} the a uthoritie s she relied upon ·of London Joint Stock Bank v Macmillan and Arthur3 and Green v Martins Bank Limited4 are not relevant to the is sue that was b efore h er. Mr. Mukuka did, however, concede that ea ch authority given to a bank by e ntry of a PIN a nd signature is unique to a particular transaction. He also c onfirmed that in effecting the second debit of the J22 P.54 3 Respondent's account, the Appellan t used the auth ority or mandate given to it in r elation to the first trans action. The arguments in respect of ground 3 were simply that indeed there was a contract between the Respondent and Kenya Airways and as such, t he Respondent should h ave pursued Kenya Airways :for the refund a nd n ot the Appellant. In relation to ground 5, the position tak en by Mr. M ukuka was that the findin g by the Learn ed High Court Judge that there was no overdraft facility on the ...... ,, Respondent's account was a misdirection in view of the evidence to the contrary. This, he explained, was reinforced by the admission m a de by the Respondent that h er account h ad a n egative b alan ce prior to the debit that is in issue. J23 P.544 The argu1nen ts under ground 6 related to the order by the court below that the Appellant should re-open the Respondent's account. Mr. Mukuka contended that the Appellant was under no obligation to continue doing .,. business with someone it did not consider appropriate; and that, there was no need for the Appellant to give notice to the Respondent prior to the closure of her account especially that the account had a negative balance. Ground 7 attacked the award of interest on amounts that were in the Respondent's account at the time of closure, at the Appellant1s ruling rate. The arguments here were twofold: that the award of interest was a misdirection and contrary to our decision in the case of Sic hula and another v Chewe7 , and that in any event, there was no money in the Respondents account at the time of its closure to warrant the award of .interest. J24 P.545 Lastly} ground 8 challenged the award of costs based on the contention that the Respondent did not need to institute the proceedings in the court below in view of the offer made by Kenya Airways to refund the money. Counsel sought solace 1n the cases of Zambia National Commercial Bank Plc v Rosemary Bwalya T/A Lynette Guest House8 , Georgina Mutale (TIA G. M. Manufacturers Limited) v Za1nbia National Building Society9 , and Collet v Van Zyl Bros Ltd10. We were urged to allow the appeal. We have considered the record of appeal, judgment appealed against and arguments advanced by the Appellant. This appeal raises a very novel question of the effect of a customer presenting a debit card to a retailer for purposes of paying for services rendered. Put differently, J25 P.546 what is the effect of a customer paying for services to a retailer by way of swiping with a debit card and entering a PIN and or appending his signature on the transactional voucher? In effect, the appeal will resolve the obligations of the key players in an EFTPOS transaction. We must state frorn the outset that there rs no case law in Zarnbia or legislation that addresses the question we have posed. We have, therefore, relied on the common law position on the principles of contract law, in particular the law relating to cheque transactions, as articulated by the authorities we have referred to in the latter parts of this judgment. The English authorities show that this is the position taken in England as well, where they also do not have legislation on the issue . P.547 The court below in arnv1ng at the decision it made observed that the use of debit cards, credit cards and other cards in general is governed by three contracts which are autonomous. These contracts are: between the card issuer (creditor /bank} and the card holder; the card holder and the retailer; and the issuer and the retailer. The court then went on to find that the transaction at Kenya Airways for the purchase of the air ticket created a .relationship in the second category of the contracts, that is, between the card holder and the retailer. We agree with this particular finding by the court below and it begs the question which we have posed earlier of the effect of an EFTPOS transaction which has been aptly sumrned up by Paget's Law of Banking, 11th edition by Mark Hapgood at page 281 to 282 as follows: J2 7 P.548 "EFTPOS allows payment to be made for goods and services by the electronic transfer of funds from the customers' account to the suppliers a ccount. In the case of a retail payment, instead of a customer paying for goods or services by means of cash or a che que, he presents the cashier with a plastic EFTPOS de bit card, which has information relating to the customer's bank account (usually a current account) e ncode d on a magnetic stripe on the back. The cashier 'swipes' the card through a card reader insta lled at the retailer's point of sale terminal and enters the amount of the transactfon ... Where the card h as been accepted the terminal will produce a transactional voucher for the customer to sign. The cas hier the n compares the customer's signature with the signature on the back of the card to see if they correspond. Once verified, the signature acts as the customer's mandate to his bank to debit his account and credit the reta iler's a ccount, and a message to this effect is transmitted, via one of the inde pendent EFTPOS networks, to the customer's bank and the retailer's bank". " :· In regard to the customer's authority or mandate, Halsbury's Laws of England, volume 48, fifth edition state s at paragraph 225 that a system known as "chip and PIN", has been introduced, which enables the customer to enter his PIN onto a pad instead of signing a voucher, thereby giving his bank the authority or mandate to pay . J:Z8 P.549 It 1s clear from the foregoing that 1n EFTPOS transactions the sale is negotiated and concluded at the point of sale by the card holder and the retailer. The bank, such as the Appellant, is merely an intermediary or facilitator of the transaction by effecting the transfer of the funds from its customer's account to that of the retailer's. This transfer is effected as a consequence of the authority or mandate given to the bank by the customer, by way of the signature on the transactional voucher and or PIN 1 as has been explained in the passages from Paget's and Halsbury's. Where no such authority or mandate has been given, the bank has no authority to debit the customer1s account. Further, the view we take is that, in carrying out the customerrs instructions, the bank does so with reasonable care and skill, as is the case when it is presented with a customer's cheque. The bank must, J2 9 P.550 therefo r e , be a lert t o ensure that_. p:nor t o, debiting its , ~ :- • J •• customer's account, the a uthority or mand a te is in order or appears on its face to have been given by the cu stomer. The facts as presented before u s , sh ow that in July 2010, the Respond ent purchased an air tick e t from Kenya Airways in the sum of K3,471.50 using her debit card. In so doing, she gave the Appella nt the a u t hority or mandate to debit h er account by entering h er PIN on the pa d of the d ebit ca rd machine at Kenya Airwa ys, being the point of sale where the transa ction was consummated. The Appellant effected the debit to the Respondent's a ccount for this transaction on 13 th July 2 010 and later, on 12th August 2010, the Appellant debited the Res pondent's account in a like sum of K3,471.50 and tra n sferred the funds to Kenya Airways' b anker. This s econd transaction , as the evidence revealed, a r ose from a fault in th e d e bit J30 P.551 card machine at Kenya Airways which was duplicating sales transaction. It is on this basis that the Appellant denies liability alleging that it had no part to play in the entry of the PIN at Kenya Airways. It has also been contended that it had the authority or mandate to debit the Respondent's account a second time because of the initial authority or mandate given. Our review of the authorities reveals that each authority or mandate given to a bank by a customer when he or she enters the PIN on the pad of a debit card machine has its unique code and features. Mr. Mukuka was in agreement with us on this point. As such, in the case on hand, what is apparent is that the Appellant debited the Respondent's account a second time using the initial mandate given by the Respondent in July 2010. The, Appellant was in our view, obliged to scrutinize the second J31 P.552 request pursuant to which the second debit was effected on 12th August, 2 0 10 to ens ure that it h a d not already a cted upon it. This is especially the case becau se the amount to be debited was similar to the amount debited earlier and in respect of t he same retailer. The Responden t cannot, t herefore , be s aid to h ave given authority or mandate for the second debit or that by giving the first 1nandate she left her card ope n to abuse. Consequently, t he Appellant ought not to have d ebited t he Respondent's account a second time. The position we h ave tak en is s upported by Paget 1s at pages 315 to 31 6 which states in part as follows : "A bank may only debit its cus tomer's account where it has his mandate to do so. In the case of a cheque the customer's mandate is his signature, and the same principle also applies where a customer signs a voucher when using an EFTPOS card. Where a customer uses an EFTPOS card to purchase goods and services over the telephone the customer's mandate will be given orally. J37. P.553 Where the customer uses an ATM or EFTPOS card toge ther with his personal identification number (PIN~, the corre ct PIN ente red by the custome rs is his mandate for debiting his account. But what if the PIN is typed in by an unauthorize d pers on? A forged or unauthorized signature on a cheque does not represent the customer's mandate and the same rule probably applies by analogy in the c ase of the unauthorized use of a PIN. However, again by analogy with the law relating to cheques, the cus tomer may b e liable to have his account debited where he adopts or ratifie s the unauthorized use of his PIN, or is estopped by his neglige nce or representation from denying that the use of the PIN was unauthoriz ed. The foregoing p assa ge fr om Paget's clea r ly s ets out th e duty of the b a n k t o take rea s on a ble ca r e a n d skill a s we have expla in ed in the earlier p art of this ju dgmen t. This principa l, a s 1s evident fr om the firs t p ar a gr a ph of t h e quota tion a b ove, 1s s imila r to tha t applica ble in ch equ e tr an sa ction s . In f a ct, t h e paragraph is derived fr om t h e decision in the E nglish ca se of Barclays Bank Ltd v W. J. Simms Son and Cooke (Southern) Ltd and Other11 , w h ich in volved th e liability of a bank a risin g out of a cheque transaction . This rein for ces th e pos ition we h ave J33 P.554 taken that the principles that govern cheque transactions are also applicable to EFTPOS transactions. Further, although the Barclays Bank Ltd case is a decision of the High Court in England, we find it persuasive and see no reason why we should not adopt it. Paget's also sets out instances where a customer will be held liable when it talks about burden of proof and explains a situation si1nilar to what happened in this case and states at page 316 as follows: "The burden of proof becomes an important issue when a customer alleges that he did not use or authorize the use of his PIN (or card) to withdraw or transfer funds .... As it is the bank which wishes to debit the customer's account, the normal rule would be that burden of proof is on the bank to prove that it acted in accordance with the customer's mandate. In theory, the bank must prove that 11) the PIN was used, and (2) it was authorized by the customer." The facts surrounding this appeal are that subsequent investigations conducted by the Appellant revealed that it J34 P.555 later discovered that the second debit was on account of a faulty machine at the point of sale, being Kenya Airways . This shows that the Appellant did not satisfy the two tests, aforestated, on burden of proof because, not only was the second transaction not authorized by the Respondent, but she did not use her PIN. We are, therefore, of the firm view that, there was no misdirection on the part of the court below, when it held the Appellant liable. This effectively takes care of grounds 1 and 3 of the appeal which contend that the Respondent was obliged to pursue the payment with Kenya Airways. That having failed to do so her hands were soiled and she could, therefore, not be granted the equitable and discretionary relief of a declaration. Our view is that, the fact, in and of itself, that the Respondent opted to pursue the Appellant and not Kenya Airways does not in any way render her hands soiled. She was at liberty to P.556 pursue either of the two because she was aggrieved by the acts of both of them. This is reinforced by our earlier finding that the Appellant owed her a duty which it breached. It is our considered view, that having been sued by the Respondent, the Appellant ought to have joined Kenya Airways to the suit to claim indemnity from it especially that it did not deny liability. The finding also determines ground 2 of the appeal, in view of the position we have taken on the effect of an EFTPOS transaction and the duty of a bank. For the sa1ne reason, our findings also determines ground 4. We accordingly dismiss the said grounds, 1, 2, 3 and 4 . The other issue that falls for determination arises from grounds 5 and 6 on the overdrawing and closure of the Respondent's account. In regard to the overdrawn status of J36 P.557 the Respondents account, the Appellant has contended that the court below 111ade a finding of fact that there was no overdraft arrangement between the parties notwithstanding evidence to the contrary. We have had occasion to revisit the findings on the overdrawn account made by the Learned High Court Judge which are at pages 19 to 20 of the record of Appeal. They are as follows: "It is quite clear from the ledger transcript in the defendant's bundle of documents that the defendant did perform his (sic) obligations to not only accept deposits of monies from the plaintiff but also to pay on demand whatever amounts the plaintiff demanded within the credit available up until 05th August 2010 when the plaintiff was allowed to withdraw an amount of K200,000 (K200) against a balance of only K46,158.29 and another withdrawal on 11th August, 2010 of KS0,000 (KS0.00) against a negative balance of Kl53,841.71. Invariably this led to the plaintiffs account having a negative balance of K203,841. 71 as at 11th August, 2010. The plaintiff testified as aforesaid that there was no credit facility agreement between her and the defendant. The defendant did not through its witness DWl dispute this. It is of course without question that by being allowed to withdraw the said amounts against negative J37 P.558 balances, the plaintiff derived a benefit. It is also not in dispute that as DWl testified that a monthly fee of KlS0.00 was by agreement charged as commission. And of course the plaintiff had no objection to this, there having been a mutual understanding between the parties in this respect. The problem arose on 12th August, 2010 when according to the ledger transcript in the Defendant's bundle there was what purported to be a visa transaction by which it seemed that the Plaintiff had purchased via EFTPOS a ticket at the price of K3,471.50. The Plaintiff's account which at the time was already in negative was further debited with the said amount. From 15th August, 2010 through 06th June, 2011, the Defendant charged interest fees in addition to the agreed commission which unfortunately in spite of several deposits into the Plaintiffs account could not and were not offset as on divers dates several withdraws were allowed by the Defendant against negative balances resulting into a negative balance of K540.05 at 13th April 2011". What is clear from the foregoing passage is that the Learned High Court Judge did not make a determination as to whether or not there was a formal overdraft agreement entered into by the two parties. She does, however, acknowledge the fact that the Appellant allowed the Respondent to overdraw her account arising from which J38 P.559 she derived a benefit. Further that, having derived such b enefit, she was liable t o pay the rnonthly fees of KlS0. 00. She made no finding whatsoever that there was no overdraft agreement. The Learned High Court Judge went on to express concern at the fact that a fter the secon d d ebit of K3, 471.50 was effected on 12th August, 2010 th e n egative b alan ce in the Respondent's a ccou nt increased resulting in the App ella nt imposing higher fee s. We cann ot fault t he Learned High Court Judge for expressing the said concern and finding that since the second debit of K3, 4 7 1. 50 was unauthorized~ the App ellant was not entitled to levy t he higher charges. As a result of this, we find no merit in ground 5 and accordingly dismiss it. J39 P.560 We now turn to consider ground 6 which alleges that it was wrong and illegal for t he Appellant t o close the Respondent1s a ccount without n otice. In arriving at h er decision on the issue, the Learned High Court Judge relied upon the case of Foley v Hill2 and quoted the followjng pass age from the case: " ... and sometimes there is the additional t e rm that the banker will pay interest on the balance due; and further, that the banker will not terminate the relation without giving the customer reasonable notice". The Appellant has contended that there is nothing to s top a bank terminating a r elationship with a customer whose account is dorma nt. We are of the con sidered view that the requirement of notice before closure of an account is only a pplicable where there is a t erm to that effect in the a greem ent governing the r elationship between a banker and customer. This is in MO P.561 accordance with the passage relied upon by the Learned High Court Judge from the case of Foley v Hill. The Respondent did not lead any evidence in the court below to demonstrate that indeed there was such a tenn in the agreement relating to her bank account between herself and the Appellant. We, therefore, find that the Learned High Court Judge misdirected herself and consequently, ground 6 must succeed and we so order. However, we can understand why the Learned High Court Judge ordered the reopening of the Respondent's account. The reason is that the relief she awarded can only be attained by the Respondent if her account is open. For this reason we have not disturbed her order to reopen the Respondent1s bank account for the reasons we have given in the latter part of this judg1nent. J41 P.562 Ground 7 questions the award of interest by t he court below on the ground tha t: t here wa s a negative b a lance in the Respondenfs accoun t which could not attract interest; and the award was against the Judgment Act. The awa rd of interest by the c our t b elow was at the Appellant's ruling r a te. We have stated in a number of cases that interest s hall be awarded a t the s hort term bank deposit rate from date of writ to date of judgment, thereafter at the current lending rate as deter mine d by Bank of Za1nbia from d ate of judgment to d ate of payment, u nless the parties have agreed otherwise. The c ourt will a lso award inte rest on money judgments such a s the judgment of the court below in accordance with section 2 of the Judgments Act whose J42 P.563 purpose is to compensate a party for being kept out of his money. To the extent that the Learned High Court Judge awarded interest at the Appellant's ruling rate and also on the Respondent's account that had a negative balance, she misdirected herself. Ground 7, therefore, succeeds . Lastly, ground 8 attacks the award of costs to the Respondent on the ground that the proceedings 1n the court below were unnecessary. We have already found that the court b elow was on firm ground by finding in favour of the A~'Ult. Having so ~~ found, the court below was entitled to exercise its discretion to award costs by applying the general principle that r,costs follow the event 11 • In view of this, the position we J43 P.564 take is that there is a bsolutely no merit in ground 8 and we accordingly disn1iss it. The net r esult is that the a ppea l subs tantially fails a nd we dismiss it. Further, although ground 6 has succeeded, we decline to overturn the Learne d High Court Judge 1s order that the Appellan t reopen the I'(espondenfs account. The reason for this is that at the time the Respondent's account was debited in the sum of K3, 47 1.50 a second time, it was already in a negative balance. What this means is that the second K3, 4 71. 50 remitted fro1n her account t o that of Kenya Airways was the Appellant's money availed to her as an overdraft. We , as a result, cannot award her what she did not ovvn. The debit did, however, have a n irnpact on her a ccount b ecause it increased the amount in negative balance in her account resulting in higher charges being levied. This needs to be redressed. J44 P.565 The negative balance remained thus notwithstanding the various deposits made into the Respondent's account subsequent to the second debit. Consequently, we order that the debit made to the Respondent's account on 12th August 2010 be reversed so that the status of her account as at 12th August 2010 be restored to what it was. We further order that the higher interest and commissions charged, other than the su1n of KIS0.00, which the court below found as the agreed monthly interest charge, as a consequence of the unauthorized debit effected on 12th August 2010 be reversed. The Appellant will be at liberty to close the Respondent's account after the aforesaid reversals; and, payment to the Respondent of moneys (if any) that will be held to her credit arising from the reversals in view of the deposits made into her account. J45 P.566 The matter, however, does not end here because in the earlier part of this judgment we have found that the Appellant was wrong in debiting the Respondent's account a second time and charging higher interest and commissions. The position we have taken, in this regard, is that there has been an infraction of the Respondent's legal rights which entitles her to an award of non1inal damages. Although, she did not lead any evidence in the court below which would have assisted the court to determine a monetary figure as damages for the infraction of her legal right by the Appellant, the fact, in and of itself, that there was such an infraction of her legal right entitles her to nominal damages. In taking this position we are reaffirming ✓1. what we said in the case of David Chiyengele and Others y"--' ,>-y'V~- V'· ·--'1 / v Scaw Limited12• We, therefore, a s we did in the said case, award the Respondent nominal damages in the su1n J46 P.567 of KS00 .00. These damages are to attract interest at the short tern1. bank deposit rate from date of writ to date of judgment and thereafter at the current lending rate as determined by Bank .of Zambia till date of payment. We also award the Respondent costs of this appeal and in the court below, to be agreed, in default, taxed. J. K. KABUKA SUPREME COURT JUDGE . . . . . . . . It . . . . . . . . . . . . . / • . ~ . /. ,7 I . . . .. .. . . . '" . . . . . . . . . . . . &••·-··········· 'P·K MUTUNA ~ I .. . . .. .. . ~ i - - . . ( ' SUJ?REM I COURT JUDGE _..✓ • I ; ( I •