Top Gear Ltd v Barclays Bank (Z) Ltd (Appeal 22 of 2006) [2007] ZMSC 185 (12 July 2007)

IN THE SUPREME COUR', CX^^TJ. HA fiC2 AiViAV-JfO, 22/2005 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: TOP GEAR LIMITED AND APPELLANT BARCLAYS BANK(Z) LIMII E D RESPONDENT Coram: Sakala, CJ. T ChibefLukunda and Mushabati JJS, On 20th March and 1.2th July, 2007 For the Appellant: Mr. A. M. Wood with Mr. J. Bn nd a of A. M. Wood atid Company. For the Respondent:LIr. K. Mubonda of D. M.. Kmp and Company. J u D G M E N T Sakala, CJ., delivered the Judgment of the Court. This is an appeal against a Judgment of the High Court d.-.smissing the Appellant’s claims for:- a declaration that ‘die: unilateral debit of its account, contrary to instructions,- was illegal, null and void; K67,497,428.42; damages; interests and costs. For convenience, we sosil refer to the Appellant as the Haintid and the Respondent Ear.;k as the Defendant, which designation^ the parties were in the court below. The case for the Plain;iff in rhe court below was that by a letter dated 13th December,. 2003, the Plaintiffs Managing Dnectoi instructed the Defendant to open a Dollar account and then to transfer K450,000,000-00 from the Plairitiff’s account No. 7248187 to the said Dollar account; and that due to uelay in opening the Dollar account, the Plaintiff cam died its instructions to open the said account by- a, letter dated 2nl January 200o. Notwithstanding the instructions canceling the opening of the Dollar account, the Defendant proceded to transfer a total sum of K500,000,000.00 from the Plaintiffs account, to its suspense account, but without first opening the Plum tiff’s Dollar account as instructed. The contention of the Plaintiff was that the Defendant had wrongfully and illegally debited the Plaintiffs account with the sum of K67,497,428.42 which the Defendant claimed was as a result of currency e?;c-harri?e.^>ratc:.;:?:fc®tuations. After various representations over the debit, the Plaintiff was informed. that the Defendant had purchi sed a sum of US$99,413.12 ort behalf of the < Plaintiff, but that the same was reconverted back to Kwacha after the Plaintiff had instructed to cancel the instructions to open the Dollar account due to Pehn It was also the contention of the Plaintiff that the Defendant had never at any time before the instructions to cancel tine opening of the Dollar account advised, the Plaintiff that the US Dollars had been purchased for it; and ilia I: the same Dollars were sitting to its credit in the Defendant’s suspense account. The. Plaintiff further contended that the Defendant refused to rectify the wrongful and illegal debit of the Plaintiffs account. The gist of the Defendant’s case was that on d,hl December, 2002, the Plaintiff mandated the Defendant to purchase US$99,4 13.12 against its Kwacha balance ol K502,232,235.;vl. rhe i tiling exchange rate obtaining at that time was K5,02b.00 to one US Dollar; that the purchase was done with a dew to open a U<> Dollar account in whi--:h the said sum of US$99,4 13.12 would be paid. In relation to the delay, the Defendant pleaded that the whole delay was cause-1 by the Plaintiff’s failure and reluctance to furnish the Defendant wiffi the relevant infonnalion that the Defendant sought anc requested for purposes of opening a Dollar account. The relevant informatiori requested was the identification documentation of the. Plaintiffs Directors and the profile. The Defendant further pleaded that no sum of money was debited by it illegally and wrongfully from the .-■ Plain tiffs account; and that the transfer of the sum of US$99,413.1.2 was reversed on the 10th of January, 2003, at the ruling exchange rate then of K4,350.00 to one US Dollar as .at 2,;-‘ January, 2003 when the written instruction to reverse the transfer was received by the Defendant from the Plaintiff; that the Plaintiff was fully aware of the purchase of the US Dollars as the statement of the Plaintiffs account was availed to fhe Plaintifff on the 31;:t December, 2002 and was well known to the Plaintiff. The Defendant denied that there was wrongful and illegal debit of the Flam tiff's account by it. In support of the pleadings and the claims, the Plainiiff. through its Managing Director, produced a sworn statement as part of its evidence. The summitry of the sworn statement, is that on 4th December, 2002, the Plaintiff’s Managing Director spoke to Mr. t Robinson Daka, an officer of the Defendant Bank, employed at Mutaba House Branch and expressed the intention to transfer an amount of K500,000,u00.00 to their Dollar accoimi. held with Standard Chartered Bank PLC, that following that conversation, Mr. Robinson Daka convinced him that a United States Dollar account could be quickly opened with them for the Plaintiff and the money credited to that account; that they specifically agreed that he would give written instructions to open a US Dollar account and then the funds io be transferred to the said account; that on 13th December, 2002, he wrote the Defendant’s Bank instructing them to open a US Dollar account and then to transfer K450,000,000.00 from the Plaintiffs Kwacha account to the said Dollar account; that on 31st of December, 2002 he obtained a Bank Statement which showed that the' Plaintiffs account had been debited with K50Cd000. Q00.00 on or about 4l!| December, 2002; and that upon making inquiries, he discovered thm although K500,000,090.00 had been transferred from the Plaintiff’s account, no US Dollar account had been opened allegedly because they required documentation from them. Thus, on or about 2nd January 2003, he wrote the Defendant to ask them not to transfer K.450,000,000.00 and not to open the Dollar account . But, to his surprise, he was ;later informed that the Defendant had indeed reversed the transfer but that the Plaintiff had lost K67,497,428.42 due to foreign exchange fluctuations. Later, ho discovered that tlw Defen han't had purchased US$99,413..12 on behalf of the Plaintiff but had. contrary to instructions, kept the safne in a suspense account. The Plaintiffs Managing Director further explained that at no time was any person in the Plain tiffs Company' informed that US$99,413.12 had been purchased on behalf of the Plaintiff and that the same was sitting in the Defendant’s suspense account; that had the Plaintiff known that the sum of US$99,.413.12 was sitting to its credit, it would have withdrawn the same and deposited it in its Standard Chartered Bank (Zambia) PLC US Dollar account. When the Plaintiff’s Managing Director was cross-examined on his sworn statement, he admitted that the agreed excimnge rate ruling on the date of transfer was US Dollar K5,028.00; that he had admitted that speculations in the purchase and. disposal of foreign currency had an inherent risk of the exchange rate fluctuating; that on 11th December, 2002, the Defendant purchased K500,000,000.00-worth of US Dollars for rhe Plaintiff; and that there were insufficient funds in the account to meet a cheque payment of £42,622,11.6,00 on 16th. December, 2002 because of the debit. The Managing Director also admit ted under cross-examination that one of his -staff went to the Defendant Bank on 20th December, 2002 and requested for an interim statement which was collected and handed to him; and that the interim statement showed that foreign exchange worth £500,000,000.00 was sold io the Plaintiff. Further in cross examination, the Plaintiff’s Managing Director admitted that in relation to the request by the Defendant for some documents to open a Dollar account, he did not provide the same because his partner was away and that ai any rate, the Defendant had all those details on th?- sfobmient on the Kwacha account; and that he recalled that DW2 visited the Plaintif. Cs office in December, 2002 to follow up on the documents. He, the Plaintiff’s Managing Director condemned the Defendant for keeping the Dollars in the suspense account while waiting for documents from the Plaintiff to open a Dollar account. He told the court in cross-examination that on 2nd January 2003, he instructed the Defendant to cancel die transaction, which meant that there would be a conversion of the Dollar into Kwacha. He admitted that the rate of exchange would be that ruling on 2nd January, 2003, when the instructions were received by the Defendant. The _ Plaintiff’s Managing Director concluded his evidence in cross examination by stating that it was wrong for the Defendant to withdraw the sum oi K500,000,000.00 from the Plaintiff’s account before his letter instructing the Defendant to do so. On behalf of the Defendants two sworn statements were produced, one by Robinson Daka. F.iWl, and another by Mai tin Mwitumwa, DW2. The gist of the sworn statement by DW • w'as I’Mat m early December, 2002, he spoke to Mr. Bany bavage, rWl. who inquired about opening a US Dollar account. He requested him to contact DW2, who was then based at Mutaba house Branch of Barclays Bank. According to DW1, the Plain tilf mandated the Defendant to purchase US Dollar 99,41.3.12 against its Kwacha . balance of K502,232,235.54. The ruling exchange rate: was K5,028.00 per one US Dollar. According to DW1, the purchase- of the Dollars in question was made by the Plain till with a view to opening a US Dollar account in which the said purchased Dollars would be paid. The transaction was confirmed to the Plamtiif on 11th December, 2002. According to the sworn statement of D\V] , for purposes of opening the said US Dollar account, the Plaintiff was requested to provide to the Defendant information regarding the identification documents of the Plaintiff’s Directors and the Plaintiff’s profile. The Plaintiff did not provide the requested information and the profile contrary to the Defendant’s requirements. DW1 explained that on 2nd January, 2003, the Plaintiff wrote the Defendant instructing it to reverse the transfer of the sum of US Dollar 99,413.12. When the reversal was effected on 10,h January, 2003, the exchange rate ruling was K4.350. U0 perrnnc US Dollar . DWi pointed out that the Plaintiff was a ware that the transfer had been made as it was reflected on its .statement of account issued on 31st December, 2002. In cross-examination, DWI told the court that • the verbal instructions to purchase foreign currency was allowable if the customer is known; that there was no agreement between him and PW1 to wait for PWl’s letter before effecting the transactions and that PWl’s written instructions to purchase K450,000,000.00 came after verbal instructions to transfer K450,000,000.00. The summary of the sworn statement of DW2 was that on 13th December, 2002, the Plain tiff wrote, the Defendant requesting it to open a US Dollar account. He checked the information from it in their books as the Plaintiff had a Kwacha Account with the Defendant. According to DW2’s sworn statement, the information in their books on the Plaintiff was not enough. In the circumstances, he contacted PW1 and requested hrm for information which was necessary for opening a Dollar account. In December, 2002, he went to PWl’s office.in an effort to obtain the said information but that he refused to provide the information requested. As a result, they did not open the US Dollar Account, In cross-examination, DV/2 testified that he was the only one at Mutaba House Branch in charge of opening corporate accounts: that the instructions .received were to transfer equivalent to K450,000,000.00 into US Dollar account and that DWI was fully informed about the client’s instructions. DV/2 further explained in cross-examination that where verbal instructions are given, a relevant indemnity had to be signed by a customer or client. DW2 admitted that the Defendant did not advise- the Plaintiff at any time about the possibility of exchange losses on its part if the Defendant acted on the proposed course of action to reverse the transaction. The learned trial Judge considered the pleadings and the evidence and found that it was not in dispute that the Plaintiff maintained a Kwacha account No. 7248187 at the Defendant's Mutaba House Branch; that by letter dated 13th December, 2002, the Plaintiff instructed the . Defendant to open a US Dollar account and thereafter to transfer a sum of K450,000,000.00; from its Kwacha account to the said new Dollar account at the ruling exchange rate of US one Dollar to K5,028.00; that by a letter dated 2?^ January, 2003 the Plaintiff advised the Defendant not to transfer the sum of K450,000,000.00; and that the Dollar A.ccount should not be opened owing to delay. The court further found that it was also not indispute that although the Plaintiff’s letter dated 2nd January, 2003 was received by the Defendant on the same date, the transfer of the sum of K500.000,000.00 was only reversed on the 10th of January, 2003. The learned trial Judge then examined the question, of mandate given by the Defendant. Me noted that the only ins true ti.ons in writing were that contained in PWl’s letter dated 13th December, 2002. This letter requested the Defendant to do two things. Firstly, to open a Dollar account; and secondly to transfer K450,000,000.00 from the Plaintiff’s Kwacha account, to the Dollar account that would have been opened. The court observed that the contention of the Defendant was •that there were verbal instructions on 4th December, 2002 by PW1 to DWI to have the Dollar account opened and to quickly purchase US Dollar 99,413.12 against its Kwacha balance of K502,232,235.54. The court noted that according to PW1, the discussion that he had with DWI was to be followed in writing. This, according to the evidence, was fulfilled when . PW1 wrote the letter on 13^ December, 2002. The agreed exchange rate was K5,028.00 to one US Dollar which was ruling at the time of the transaction. The court also observed riiat although DWI told the court that the Bank would act on verbal instructions provided a customer was well known, DW2, however, contradicted himself .by saying that, a verbal instruction could only be acted upon when a customer had signed an indemnity; Inn this was not done by PW1. The court treated the Plaintiff’s letter of 13th December 2002 as the only formal and legitimate instruction to the Defendant Bank. The court thereafter paused a question of whether the Defendant carried out its obligations. The court found that there ’was sufficient evidence on record and that. PW.1 did not deny the fact that the Plaintiff >?iled to provide the Defendant with the necessary document;- and information to facilitate the opening of a Dollar account; that DW2 even took the trouble of visiting PW1 at his office in an efforr. to obtain the requisite documents; but that PW1 was not helpful. The court further noted that there was ample evidence that the Defendant purchased the sum of US Dollar 99,413.12 before 13th December, 2002 which, in the absence of a Dollar account, was placed in a suspense account. The court found that there was no evidence that the Plaintiff was informed that US Dollar 99,413.12 was sitting in the suspense account; and that the only evidence from the Defendant witnesses was that PWl knew, upon receipt of the Bank Statemenl dated 31s1 December, 2003, that the -Kwacha account had been cebited with K500,000,000.00 for forex sold. According to the trial Judge, the fact that the Defendant bought forex worth K500,000,000.00 contrary to the instructions contained in his letter of 13'h January, 2002 did not seem to bother the Plaintiff nnicli. yud. the say<y.,.was not challenge:] in evidence. In the view of the court, the issue was whether tlie Defendant wrongfully and illegally debited the Plaintiffs Kwacha account with the sum of K67,497,428.42. To deal with this issue, the court considered the Plaintiff's letter dated 2ru January,2003, addressed to the Defendant Bank. From that letier, the court deduced that the Plaintiff had, by 2rul January, 2003, concluded chat no Dollar account had been opened by the Defendant; and that, that being the case, it was the Plaintiff’s wish that 1(450,000,000.00 should remain in the Kwacha account until further notice or instructions to the Defendant. It was further the view of the court that at the time the Plaintiff wrote the letter of 2™-- January, 2003, to the Defendant, the Plaintiff was aware or had infact become aware from the December 2002 Bank Siatemenl that forex worth K500,000,000.00 had been sold to it on 10th December, 2002. According to the trial court, what, the Plain tiff was not informed about is the fact that the Defendant had suspended the US Dollar 99,413.12; but that the Defendant, explanied tnat i! look this action in order to protect the Defendant from possible exchange losses. The court noted that there was evidence that the parties had agreed that the forex would be sold to the Plaintiff at the ruling exchange rate of K5,028.00 per US Dollar; but that there was no agreed exchange rate for converting the US. Dollar 99,413.12 back to Kwacha. on • 2nd January, 2003. The court observed that instead, the Defendant applied the ruling exchange rate of K4,350.00 to US one Dollar as at 2nd January, 2003, which inevitably resulted in a loss !o the Plaintiff of K67,497,428.42. The court pointed out that although the Defendant admitted that 1 it did not advise the. Plaintiff about the possibility of exchange losses if it proceeded to reverse the request, the Plaintiff agreed under cross examination that the' Defendant was undei an obligation to sell the Dollar at the rate of exchange which was prevailing on the date of receipt of the instructions: and. that PW1 had re-confirmed his earlier understanding that dealings in foreign currency involved speculation and risk. The court was satisfied that the . Defendant took reasonable steps and caution by making several follow-ups on their request, to the Plaintiff for the failure to provide information and documents which were a pre-requisite to the opening of a Dollar account. The court was further satisfied that it was the delay or reluctance on the part of the Plaintiff to provide documents that were wholly responsible for the lost", in exchange rate that the Plaintiff suffered. The court pointed out that the conduct, of the Plaintiff in this regard was totally at variance with its-desire and instruction-to the Defendant to promptly open, a Dollar account. The court found that in the circumstances, it was not sufficiently persuaded that the Defendant acted negligently without, care of duty on its part. The court was convinced that, had the Plaintiff promptly complied with the Defendant’s request, the Dollar account would have been opened and the foreign currency would have been transferred as per instructions without any loss occasioned to the- Plaintiff. The court was satisfied that any prudent banker would have suspended the foreign currency under the orevailine * ■ o circumstances in order to protect the interests of its client against exchange loss. The court., concluded that.jt found nothing in the conduct of the Defendant that was wrongful and illegal by debiting the Plaintiffs account with the sum of '£67,497/428.4 2 resulting from the depreciation in the exchange rate as at 2nd January. 2003, the date of instruction to the Defendant. The Plaintiffs action failed and the claim was 'accordingly dismissed with costs to the Defendant to be taxed if not agreed. Hence this appeal to this court. The Plaintiff filed a memorandum of appeal containing three grounds namely; that the learned Judge in the Court below erred in Law and fact when lie held that the Appellant was wholly responsible for the loss in exchange rate that was suffered, despite' the Respondent refusing to act according to the Appellants instructions; that the learned Judge in. the court below erred in Law and fact when he held time the Respondent was not negligent in its dealings with the Appellant; and that, the learned Judge in the court below erred in Law and fact when he held that the transfer of £500,000,000.00 contrary to instructions did not bother the Appellant. Counsel for both parties filed written heads of argument based on the three grounds of appeal. Both Counsel also made oral submissions. Before the appeal could be argued, Mr. Mubonda, on behalf of the Defendant, applied for leave to file a notice of a cross- , appeal. Mr. Banda on bob df of the Plaintiff opposed the application. We refused the application for leave to file a notice of cross appeal out of tims on the ground that there was, on the facts of this case, inordinate delay in that the application for leave to file a notice of a cross appeal was being made after the Plaintiff had filed its heads of argument. The gist of the Plaintiff’s written heads of argurnent. on ground one is that the trial court’s, finding that the'delay or reluctance on the part of the Plaintiff to provide the required information and documentation was wholly responsible for the loss in exchange rate that the Plaintiff suffered was a total misdirection both in fact and law; that the Plaintiff issued very plain and unambiguous instruction to the Bank; that ihe instruction was first to open a Dollar Bank Account; and then that after opening the said Dollar account to transfer the -equivalent of 0.50,000,090.00 from the Plaintiffs Kwacha account to the newly opened Dollar account. It was submitted that the learned trial judge failed to give full effect to the sequence of events anticipated by the letter of instructions; and that according to the letter of instructions, the opening of the Dollar account was supposed to pi ecede the transfer of the K450,000,000.00; and that the evidence of DW2 on this point was clear. It was further submitted that the trial Judge’s finding that the Plaintiffs delay in providing documents was wholly responsible for the exchange loss flew in the teeth of the evidence; that the court failed to direct its mind to the fact that the opening of the Dollar account was supposed to precede the transfer of any money; and that had the Defendant acted according to the strict tenor of the Plaintiffs only legitimate and official instruction' no ioss would have occurred. It was contended on behalf of the Plaintiff that the Defendant was supposed to first open the Dollar account and only to transfer K450,000,000.00 after the Dollar account had been opened as per evidence of DW2; and that contrary to the Plaintiffs legitimate and , official instructions, the defendant proceeded to first transfer the money before opening the Dollar account. It was submitted that this was the cause of the loss; that if the money had not been transferred before the opening Of the Dollar account; the delay in providing information for the opening of the account would not have caused any loss as the money7 would still have been sitting in the Plaintiffs Kwacha account without any exchange losses whatsoever; that as a matter of fact, no mention was made of any suspense account in the Plaintiffs letter of instructions; and that in addition, the evidence of the Plaintiffs Managing Director was that at no time was he or anyone in the Plaintiffs company informed that US$99,413.12 had been purchased and was sitting in the Defendant’s suspense account. Finally on ground one, it was submitted in the written heads of argument, that both on the law and the facts of the case:, the exchange loss was entirely attributable,, to the Defendant’s failure to act according to the tenor of the Plaintiff’s instructions. In his oral arguments and submissions on ground one, Mr. Banda on behalf of the Plaintiff, briefly submitted that the Defendant and indeed all other Banks should act in accordance with the client’s instructions. He repeated the written heads of argument that the instructions of what the Defendant had to do were very clear which were to open the Dollar account first; then transfer K450,000,000.00 to the new Dollar account but that these instructions were never followed; that what happened was that before instructions arrived at the Defendant Bank, the Plaintiff’s account was debited with K500,000,000.00, which the Defendant used to purchase 'US$99,423.12 which money was then transferred to the suspense account; that ' on account of the transfer, the Defendant was instructed on 2nt- January, 2003, not to open the Dollar account. But the Defendant went ahead and converted the US$99,413.12 back into Kwacha and deposited the same into the Plaintiff’s Kwacha, account, resulting in the loss to the Plaintiff. It was argued that this loss could not have occurred had the Defendant followed the Plaintiffs infractions: that the finding that the loss was occasioned by the delay on the part of the Plaintiff in providing the necessary information to open the Dollar account was a misdirection; and that the trial court had correctly found that the only legitimate and formal instructions were those given in the letter dated 13 th December, 2002, which instructions were not followed by the Defendant Bank. The summary of the written response on ground one is that the trial Judge was right in holding that the delay or reluctance on the part of the Plaintiff to provide the required information and documentation was wholly responsible for the loss in the exchange rate that the Plaintiff suffered because of the manner the Plaintiff pleaded their case as being a claim for monies lost as a result of exchange rate fluctuations, and on the basis of the evidence on record. Specific evidence was outlined in the written response to ground one to support the finding of the trial Judge. In his oral response to ground one, Mr. Mubonda, on behalf of the Defendant, pointed out that there was a sequence of events; that the trial judge was right that the letter of 13th December, 2002, was the formal and legitimate instructions; and that he, however, took into account the sequence of events which commenced with the telephone conversation from the Plaintiff on 4th' December 2002, made by PW1 to DWI requesting for the purchase by the Defendant, on behalf of the Plaintiff, of forex against the Plaintiffs Kwacha balance. We have very carefully considered the written arguments and submissions on ground one on behalf of both parties. We have also examined the evidence on record and the Judgment of the trial court in relation to the submissions on ground one. We agree that the evidence on record reveals a sequence of events in relation to the role each of the parties had to play in the whole transaction. In our view, the issue raised in ground one of whether the trial Judge erred or not, when he held that the Plaintiff was wholly responsible for the loss in the exchange rate that was suffered, despite the Defendant refusing to act according to the Plaintiffs instructions, centers on the sequence of. events that led to the Joss in the exchange rate. The salient facts were common cause. According to the case for the Plaintiff, on or about 4lh December, 2002, the Plaintiffs Managing Director, PW1, spoke to DW1, an employee of the Defendant Bank. According to his evidence, PW1: expressed an intention to transfer an amount of money to their Dollar account held at Standard Chartered Bank, DW1 convinced him that a Dollar account could be quickly opened with the Defendant and money credited to open the Dollar account. PW1 agreed to give written instructions to open a Dollar account and then transfer the money to the said Dollar account. It was common cause that on 13th December 2002, PW1 wrote the Defendant Bank instructing them to open a Dollar account. The letter reads:- “13th December, 200'2 Mr. Martin Mwitumu a Barclays Bank Mutaba House Lusaka Dear Sir, OPENING OF POLLA ACCOUNT FOR TOP GEAR LIMITED We refer to the abov-i matter and would like to request you to open a second at: count far us, thus a dollar account. Enclosed is a dull completed and signed form for your consideration. We would also like you to transfer K450,000,000.00 (Four hundred and fifty million Kwacha) from our Kwacha account number 72481ST j’;o the same dollar account that will be opened. Your quick action in. the matter will be highly appreciated. Yours faithfu I ly, TOPGEAR LIMITED B. Savage Managing Director* The language of this letter is very clear and consistent with PWl’s intention and verbal instructions; namely open a Dollar account and then transfer K4503000,000.00 into the opened Dollar account. It was also common cause that on or about 31st December, 2002, PW1 obtained the Plaintiffs Bank Statement which showed that the Plan/tiff’s account was debited with K500,000,000.00 on or about 4th December, 2002. On inquiry, although K500,000,000.00 had been, transferred from the Plaintiff’s Kwacha account, no Dollar account had been opened. This in our view was contrary to both vernal and written instructions by PW 1. On 2nd January, 2003, PVV1 instructed the Defendant not to transfer K450,000,000.00 and not to open the Dollar account. This letter reads:- Dear Sir, We refer to the letter dated the 13th of December concerning the opening of a Dollar account. We have come to a conclusion that the K450,000,000.00 (four hundred and fifty million Kwacha) which was supposed to be transferred to the dollar account had it been opened remain in the Kwacha account until at a time when we decide to have a Dollar account opened for us. We apologise for any inconvenience caused regarding this matter. Yours Faithfully TOPGEAR LIMITED,” 2* Quite clearly, this letter ?was. confirming. J,hat no Dollar account had been opened. Subsequently, PW1 was informed that the Defendant had reversed the transfer but that the Plaintiff had lost K67,497,428.42 due to foreign exchange fluctuations. It was not in dispute that the Defendant had purchased US$99,413.12 on behalf .of the Plaintiff and put it in a suspense account. The contention of the Defendant was that they could not open the Dollar account because the Plaintiff did not provide the requested information. The learned trial Judge held that the letter of 13th December, 2002 was the formal and legitimate instructions. We agree with this holding. The instructions, as we understand them, were to open the Dollar account first; then secondly transfer K450,000,000.00 to the new Dollar account. On the evidence on record, we are satisfied that these instructions were not followed. In fact, the Defendant debited the Plaintiff’s account before the letter of 1 3th December, 2002. In other words, they purchased the Dollars and put them in the suspense account but without opening the Dollar account. It is very clear to us from the evidence on record that had the specific instructions, verbal or written been followed, there would have been no loss in the exchange rate which resulted in the loss of the sum of K67,497,428.42 to the Plaintiff. What we do not understand is why the Defendant decided to purchase the Dollars and put them in their suspense account before opening the Dollar account. In our considered view, had the Defendant opened the Dollar account first as per instructions, whether delayed or not, the money would have remained in the Kwacha account until when the Dollar account Was opened; and no loss due to fluctuation of the Kwacha'would have been caused. Yet, despite verbal instructions, no Dollar account was opened, while the Kwacha was converted into Dollars. At the same time, there is no evidence that the Plaintiff was advised that Dollars had been purchased and deposited into the Defendant’s suspense account. A lot of doubts are raised as to whether the money was actually in the Defendant’s suspense account. While we agree that there was delay on the part of the Plaintiff to provide the required information and documentation, we do not agree that this was wholly or at all responsible for the loss in exchange rate that the Plaintiff suffered. The Defendant was not obliged to purchase the Dollars before opening the.’ Dollar account, We are satisfied - that, the purchase of the Dollars and the depositing of the same into the Defendant’s suspense account followed by the converting of the Dollars into Kwacha was wholly responsible for the loss in exchange rate suffered by the Plaintiff. Having found that the legitimate and formal instructions from the Plaintiff were those in the letter of 13th December, 2002, we agree that the trial Judge failed to give full effect to the sequence of events anticipated by the letter of instructions including PWl’s verbal instructions. We are, therefore, satisfied that on the evidence on record, the trial Judge erred in both law and fact when he held that the Plaintiff was responsible for the loss in the exchange rate that was suffered. Ground one of appeal is, therefore, allowed. The summary of the written heads of argument on ground two is that the trial Judge e? ,'ed when he decided that the Defendant was not negligent in its dealing with the Plaintiff; that on the evidence on record, the Defencmnt breached its duty to act according to the tenor and spirit of rhe Plaintiff’s instructions, as a result the Plaintiff suffered damage; that having found that the only legitimate and official instructions from the Plaintiff to the Defendant were thorn; contained in the letter of 13th December, 2003, the trial Judge? should have gone a step further to decide whether or not the clients instructions had been acted upon; that contrary to the Plaintiff’s instructions of open the Dollar account first and transfer Kc 50,000,000.00 to the opened Dollar account, the Defendant effected a transfer to its suspense account before opening the Dollar account; and, that further the amount transferred was K500,000,000.00 instead of K450,000,000.00 as instructed by the Plaintiff. I It was contended that even after the purchase of US$99,413.12, the Plaintiff was not informed about the existence of the Dollars; that it was admitted that the tone of the letter of 2nd January, 2003, put the Defendant on notice that, the Plaintiff was not aware of the existence of the US Dollars; that on the evidence, it was admitted that it was the Defendant’s duty to have advised the Plaintiff that US Dollars were sitting to its credit in the. Defendant’s suspense account; that it was the Defendant’s duty to have advised the Plaintiff that reversing its instructions would result in exchange losses; but that this was not done. For this contention, the Plaintiff relied on Paragraph 251 Halsbury’s Laws of England Vol. 3(1) 4th Edition where the authors state: “ Where it is within the scope of a Bank's business to advise on financial affairs, it owes a customer to whom it offer such advice or assistance a contractual duty to exercise reasonable skill and care and it will not avail the bank, that it has given secret instructions not to give such advice.” It was submitted that the Defendant was under a duty not only to act according to the Plaintiff’s instructions, but also to make full disclosure to the Plaintiff of all the matters touching upon the Plaintiff’s financial affairs; and that in the instant case, the Plaintiff was never advised that it had US$99,413.12 sitting to its credit in the Defendant’s suspense account. Fox- these submissions Paragraph 174 of the same Halxbury’s Lawi of England (Supra) was cited in which the Authors state: “The Banker’s duty in regard to the payment of cheques und ?r a valid mandate is not necessarily fulfilled by his compliance with the mandate, he is under a contractual duty of ?are which may require him. to question payment/ It was further submitted that the Defendant should have questioned the tenor of the letter of 2nd January, 2003, especially in view of the fact that the tone of that letter was inconsistent with the knowledge that the author had US$99,413.12 sitting to its credit in the Defendant’s suspense account; and further that the said letter clearly referred to K450,000,000.00 and not K500,000,000.00; and that even on this score, the Defendant should have questioned the instructions. In conclusion on ground two, it was submitted that this duty was breached with the resultant damages to the Plaintiff. Mr. Banda’s oral submissions on ground two were a repetition of he written heads of argument that the Defendant were negligent because they did not act to the Plaintiff’s instructions. The short summary of the wrilten response to the written heads of argument in ground two is that the Defendant acted within the scope of the Plaintiff’s ins true dons; that it exercised reasonable 'care and skill in carrying out its instructions; that the trial Judge considered and accepted that the Defendant took reasonable steps and caution by making several follow-ups for the Plaintiff to provide information and documentation which were a pre-requisite to opening of the Dollar account. In his oral submissions on ground two, Mr. Mubonda relied on his written heads of argument. On account of what we have said when discussing arguments and submissions on ground one, we do not intend to delve into great detail on the arguments, and submissions on ground two. Suffice it to emphasize that the evidence on record clearly established that the Defendant did not act according to the tenor and spirit of the Plaintiff’s instructions as a result of which the Plaintiff suffered damage. We agree in toto that the trial Judge, having found that the only legitimate a id official instructions from the Plaintiff to the Defendant were those in the letter of 13th December, 2002, (quoted in full when discut sing arguments and submissions in ground one), he should have gone .a step; further to decide whether or not the client’s instructions, were acted upon. As pointed out in ground one, the Plan tiff’s instructions (verbal and written) were to ffirst open the Dollar account and only after opening the Dollar account, to secondly transfer K450,000,000.00. But what did the Defendant do? They purchased US$99,413.12 and transferred it to their suspense account but without, opening the Dollar account and without informing the Plaintiff of the existence of US Dollars. We are satisfied that the Defendant was negligent in its dealings with the Plaintiff. The trial Judge, therefore, erred in law and fact by holding that the Defendant was not negligent. Ground two of appeal is also allowed. The short gist of tire written heads of argument on ground three is that the finding that the transfer of K5.00,000,000.00 did not bother the Plaintiff was totally unsupported by the evidence on record. In the oral arguments, Mr. Banda submitted on ground three that even assuming that evidence of transfer was not challenged, it was not within the Defendant’s powers to have dealt with the Plaintiff’s money as they felt. There were no written oral responses on behalf of the Defendant on ground three. We agree with the arguments and submissions of the Plaintiff on ground three that the finding that the Plaintiff was not bothered with the transfer of K500,000,000.00 was unsupported, and that above all, the Defendant was not entitled to deal with the Plaintiffs money as it pleased them. In our view, the subsequent actions taken by the Plaintiff canceling the instructions to open a Dollar account and these very proceedings must point to the Plaintiff’s concern about their money. We, therefore, allow ground three too. All the three grounds of appeal having been successful, we allow the appeal on all the grounds. We grant the declaration sought, enter... Judgment in the sum of K67,497,428.42 with interest at short term Bank deposit rate from the date of the writ to the date of Judgment and thereafter at the Bank lending rate. We also enter Judgment for damages to be assessed by the Deputy Registrar at. the same interest rate as above. Costs follow the event to be taxed in default of agreement. E. L. Sakala CHIEF JUSTICE L. P. Chibesakunda SUPREME COURT JUDGE C. S. Mushabati SUPREME COURT JUDGE /rmc