N0.

1A

The evidential burden and the legal burden rests upon the JVC to prove it’s case that it’s not party to
the fraudulent transactions of a one Yosia , thus to prove this the bank has to disclose the accounts of
Mr.Yosia to prove it’s case as per the analysis of the statutes below;

1. The bank has to use the provisions of Evidence (Banker Books) Act. Sec 6 of the Act,
any party may apply to court so that court orders such as party to be at liberty to inspect
& take copies of any entries in a banker’s book. In Bankers Trust Co V Saphira,.
Court granted an order where the plaintiff sought to trace their funds which they had
been fraudulently deprived.

2. Request for garnishee order from court to order for disclosure can be in form of
garnishee proceedings under 0.20 CPR.

3. Financial institutions Act ( As Amended ) 2004,Sec 78(2), Disclosing to CRB non-performing

loans. Section 118 (1) Revealing to the central bank accounts which contains funds from the
proceeds of a crime. Section 130 (1) Informing National law enforcement agencies of any
suspected money laundering.

NO. 1B

YES THE RADIO DEALER’S CLAIM WILL BE SUCCESSFUL

A Holder in due Course:

Section 28 (1) Bill Exchange Act defines a holder in due course as a holder who has taken a
bill, complete and regular on the face of it, under the following conditions namely; that he or
she became the holder of it before it was overdue, and without notice that it had been
previously dishonored, if that was the fact; that he or she took the bill in good faith and for
value, and that at the time the bill was negotiated to him or her he or she had no notice of any
defect in the title of the person who negotiated it.

For a holder in due course is that he or she must take the bill complete and regular on the
face of it. This means that if any essential element in form is lacking the transferee cannot be
a holder in due course. Incomplete means that there is some material details missing e.g. name
of the payee, amount payable and necessary endorsements. It appears that a cheque without a
date is not invalid under s. 2 (4) (a) but it is not complete and regular for purposes of s. 28
because regularity is a different thing form validity. A cheque is regular on the face of it
whenever it is such as not to give rise to any doubt that it is the endorsement of the payee.

The word ‘face’ as used in s.28 (1) means looking at the cheque, front and back without the
aid of outside evidence it must be complete and regular. As to when an endorsement will give
rise to doubt, Lord Denning in the case of Arab Bank Ltd V. Ross (1952) 2 Q.B . 216,
says that is a practical question which is as a rule, better answered by a banker than a lawyer.
Bankers have to consider regularity of endorsements every week, and everyday of the week
and every hour of every day.

To qualify as a holder in due course the transferee must have no previous notice of
dishonour of a cheque. This can be illustrated by the facts of N.S. Rawal v. Rathan Singh & Anor
(1956) 26 KLR. 98, The court held that they were holders.

To qualify a holder in due course is that one must become the holder before the cheque was
overdue. Under s. 35(3) BEA, a cheque is payable on demand and will be deemed overdue
when it appears on the face of it to have been in circulation for unreasonable length of time.
And what is unreasonable length of it is a question of fact. In Uganda and according to the
Bank of Uganda clearing rules, a cheque is valid for a period of 6 months from the date of
issue.

To qualify a holder in due course is that the transferee must have taken the cheque in good
faith and for value. Under s. 89 of the Bills of Exchange Act, a thing is deemed to be done in
good faith where it is in fact done honestly whether it is done negligently or not.

Value is defined under s. 1 to mean valuable consideration. Under s. 26(1) (a) valuable
consideration sufficient for a cheque may be constituted by any consideration sufficient to
support a simple contract. According to s. 26(2) where value has at any time been given
for a bill, the holder is deemed to be a holder for value as regards the acceptor and all parties
to the bill who became parties prior to that time. It is also provided under s. 26(3) that where
the holder of a bill has a lien on it, arising either from contract or by implication of law, he or
she is deemed to be a holder for value to the extent of the sum for which he or she has a lien.
Moreover under s. 29(1) every party whose signature appears on a bill is prima facie deemed
to have become a party to it for value.
The Supreme court of Nigeria in the case of Metalimpex v. A.G. Leventis and Co.
(Nigeria) Ltd 1976(1) ALR Comm. 20, stated that a bills of exchange and promissory
notes are presumed to be supported by valuable consideration and a party who alleges want of
consideration therefore has the burden of proving it.

Section 26(1) (b) provides that valuable consideration for a bill may be constituted by an
antecedent debt or liability. And under s. 26(3) where the holder of a bill has a lien on it,
arising either from contract or by implication of law, he or she is deemed to be a holder
for value to the extent of the sum for which he or she has a lien. This means that a person
holding by virtue of a lien may qualify as a holder in due course, even though the amount
of the instrument is greater than the sum for which he has alien.

To qualify as a holder in due course is a holder whom at the time when the bill was
negotiated to him or her, he or she had no notice of defect in title of the person who
negotiated it. The phrase defective title is not defined in the Act but section 29(2)
provides that in particular the title of a person who negotiates a bill is defective within
the meaning of the Act, when he or she obtained the bill or acceptance thereof by fraud,
duress or force and fear or other unlawful means or for an illegal consideration or when
he or she negotiates in breach of faith or under such circumstances as amount to fraud.

NO.1.C

The main determination whether or not a person is a customer must depend on whether or
not that person has or will have an account in the Bank. In Great Western Railway Vs.
London and Country Banking Co. Ltd [1914] 19 Com. Cas 256 it was held that a
person was not a customer of the bank who had no account of any sort with the bank and
nothing to his credit in any book or paper, held by the bank. The fact that the bank does
render some casual services to him does not make him a customer and the bank isn’t
liable to him as it would be to its customer.

In the above case a rate collector habitually cashed crossed cheques at the counter of the
defendant, with whom the rural authority maintained its account. In all these cases he
retained part of the amount and asked that the balance be credited to the authority’s
account. The bank was sued for conversion. One of the questions was whether the cheque
had been collected by the bank for a customer. It was held that although the bank had
regularly cashed cheques at the rate collector’s request for a number of years, he didn’t
maintain an account with the bank.

In the case of Iwa Kizito (Administrator of the Estate of the late Felix Charles Maku) vs.
Equity Bank (U) Ltd & Mindra Josephine HCCS No. 36/2013 stated that a bank customer
has been legally defined as someone who has an account with a bank or who is in such a
relationship with the bank that the relationship of a banker and customer exists.

Note however that an arrangement to open an account is sufficient to constitute one as a

customer as long as there is consensus ad idem between the two. In Ladbroke V. Todd
[1914] 19 Com. Cas 256 Court held that a person becomes a customer of the bank when
he goes to the bank with money or cheque and asks for an account to be opened in his
names. If the bank accepts the money and is prepared to open an account for that person,
then that person is a customer of the bank from that point.

The court stated that a person becomes a customer of a bank when he goes to the bank
with money or cheque and asks to have an account opened in his name, and the bank
accepts the money or cheque and is prepared to open an account in the name of that
person; after that he or she is entitled to be called a customer. It is not necessary that he
or she should have drawn any money or even that he or she should be in the position to
draw money. Such a person becomes a customer the moment the bank receives the
money or cheque and agrees to open an account.

In the above case, a rogue who stole a cheque opened with the defendant bank an account
under the name of ostensible payee of the instrument. The cheque was cleared and the
rogue withdrew the funds. The bank contended that the mere opening of the account did
not constitute the rogue a customer. The court held that the rogue had become a customer
when the bank agreed to open the account.

Similarly in Woods v. Martins Bank Ltd (1959) 1 QB 55 a bank accepted instructions

from the plaintiff to collect money, pay part of it to a company he was going to finance
and retain to his order the balance of the proceeds. He had no account with the bank. It
was held that an agreement to open an account is sufficient to constitute the person a
customer of the bank.
 No.2

Whether or not Tony is a customer to ABC Bank?

The relationship of a banker and his customer is one of contract. In Esso Petroleum Co. v.
Uganda Commercial Bank Civil Appeal No. 14 of 1992, the supreme court of Uganda held that
the relationship of a banker and a customer is contractual. The court said that the
respondent was in breach of his duty emanating from the contractual relationship of
banker/customer. Similarly in Mobil (U) Ltd v Uganda Commercial Bank (1982) H.C.B. 64.. The
determination of whether one is a bank customer depends on whether or not he/she has an account or
will have an account with the bank.

In IwaKizito V Equity bank &Anor and Commissioner of Taxation V English, Scottish &
Australian bank Ltd, A customer was defined as some who has a more permanent
relationship with the bank i.e. having an existing account with the bank i.e. it’s an implied
contract whose terms are in much dependent on the custom of bankers. The most fundamental term
is that the banker undertakes to borrow money from the customer as and when the customer lends it
to him and to deposit it in his account until the customer demands for it.

In Great Western Railway v London & Country Banking, Plaintiffs never had an account
with the defendant bank but habitually cashed crossed cheques with the def bank. The issue as
whether plaintiffs were customers. It was held that since the plaintiffs never maintained an
account with defendants they were not bank customers.

In so relating to the facts at hand Tony had opened up the account in ABC bank thus he is a
customer to ABC bank. As per the case of Mobil (U) Ltd v Uganda Commercial Bank
(1982) H.C.B. 64..

Whether or not ABC bank is liable for breach of banker it’s duties?

Duty to honour a customer’s mandate where a customer gives a bank instructions to honour
his mandate when he has sufficient funds and the order is drawn from with correct signatures,
it has a duty to honour a customer mandate. In Stanbic Bank V Uganda Crocs Ltd, The s/court
stressed that a bank has a duty to act in accordance with the customer’s mandate.

In Makua Nairuba Mabel V Crane Bank, Justice Obura emphasized that the duty of the
bank is to obey a customer’s mandate & in obeying it, it ought to do so with reasonable care so
as not to cause loss to the customer.

In John Kawanga &Anor V Stanbic Bank, Plaintiffs drew 2 cheques payable to various
payees. When the cheque was presented for payment, the def bank dishonored them of sued
for wrongful dishonor of cheqes.it was held that the bank breached the contract when it failed
to pay the monies to the payee even after the plaintiffs had confirmed with the def that the
cheques were properly drawn & authorized by them.

The banker is owed a Duty to exercise reasonable skill & care;

The bank is required to exercise reasonable care in carrying out the customers operations. It
ought to verify customer since failure to do so and occasions loss toa customer, the bank may
be -held liable. In Banex V Cold Trust Bank, if a banker pays & debits its customers account
in reliance on a signature being a customer which is not so, he cannot charge it’s customer
with the payment in paying cheques. A banker should not be negligent and cannot charge its
customer with money lost than their (banker’s) negligence.

The bank must also recognize the person from whom or for whose account he/she has received
money in an account as the proper person to draw it.

In so Analysing per the facts at hand, the Abc bank breached it’s duties as a banker of
exercising reasonable skill & care towards Tony when it failed to embrace Tony’s mandate
upon missing of his card and thus his money 200,000/= was withdrawn fraudulently by a
rouge.In Banex V Cold Trust Bank, if a banker pays & debits its customers account in
reliance on a signature being a customer which is not so, he cannot charge it’s customer with
the payment in paying cheques. A banker should not be negligent and cannot charge its
customer with money lost than their (banker’s) negligence. Thus I Advise Tonny that he can
successfully sue ABC Bank for breach of it’s obligation as a banker and thus court can award
him loss he attained.

Whether or not Tony is liable for the breach of his duties towards the bank?

The customer is owed a Duty to exercise reasonable care in executing his/her mandate. He
should not mislead the bank nor facilitate forgery.

In Joachimson V Swissbank, Lord Atkins said among others that a customer should exercise
reasonable care in executing his/her written mandate so as not to mislead the bank or facilitate
any forgery.
 In London Joint Stock bank V Macmillan & Arthur, The HOL held that where a customer
does not exercise reasonable care in drawing a cheque & he does so in a manner which
facilitates fraud, he is liable & responsible for any loss by the banker which is a direct and
natural consequence of his breach of duty.

The customer has a Duty to inform the bank of any forgeries that the customer is aware of
or any fraud and suspicious transaction. Failure to do so, a customer will be estopped from
contending against the bank.

In Greenwood V Martins Bank ltd, Plaintiff had an account with def bank. He knew his wife
had for a period forged his signature on cheques & draw money using them which fact the
plaintiff was aware of but never notified the bank. When the plaintiff wife committed suicide,
plaintiff brought an action for recovery of the sum drawn by hiswife.it was HELD that if a
customer knows of any forgery on his account and fails to notify the bank, his silence amounts
to breach of duty to disclose.

In so Analysing per the facts at hand, Tony violated his obligation as a customer towards ABC Bank per
the duty of Duty to inform the bank of any forgeries that the customer is aware of or any fraud
and suspicious transaction, as enshrined In case of Greenwood V Martins Bank ltd, HELD that if a
customer knows of any forgery on his account and fails to notify the bank, his silence amounts to breach
of duty to disclose. Thus his negligence of writing his pin down on a paper and putting it in the room
where he shares with his friends and not informing bank upon the undue technicalities, I advise Tony
that he cannot successfully sue for the loss of 100,000/=

NO.3A

i) It is not absolute for a banker to honor checks of the customer as clearly analysed
below ;

ii) Forged Signatures:

A person in possession of a cheque on which the drawers or endorser’s signature has
been forged or placed thereon without authority has no title and therefore no right to
retain the cheque or discharge the cheque. The bank can dishonor a cheque.

Failure to present a Cheque in proper time.

S.44(3)(b) BEA provides that where the bill is payable on demand, presentment must be
made within a reasonable time after its issue in order to render the drawer liable, and
 within a reasonable time after its endorsement, in order to render the endorser liable. In
determining what is a reasonable time, regard shall be had to the nature of the bill, the
usage of trade with regard to similar bills and the facts of the particular case. However
under s. 73(a) where a cheque is not presented for payment within a reasonable time of its
issue the drawer will only be discharged to the extent of any actual damage which he or
she suffers as a result of such failure. The rules as to presentment are of particular
importance to the collecting bank because a banker to whom a cheque is delivered for
collection is under a duty to his customer to use reasonable diligence in presenting it for
payment. Sections 44, 45 and 73 which govern presentment were exhaustively discussed
by the Supreme Court of Uganda in Esso Petroleum (Uganda) Ltd v. UCB Civil
Appeal No.14/1992 S.C. After quoting the sections Order J.S.C stated that the duty
appears to be that such a banker as agent for collection is bound to exercise diligence in
the presentation of the cheque for payment. If a banker fails to present a cheque within a
reasonable time after it reaches it, it is liable to the customer for loss arising from the
delay, the drawer or endorsee, if any, is discharged to the extent of damage he or she may
have suffered by the failure to pay the cheque by the bank on which the cheque was
drawn.

Lastly if the cheque discloses the amount that exceeds the one on the account then the bank is free to
dis honor the cheque.

However it is absolute for a banker to honor customer’s mandate , where a customer gives a bank
instructions to honour his mandate when he has sufficient funds and the order is drawn from
within correct signatures, it has a duty to honour a customer’s mandate

N0.3b)

Tournier v. National Provincial and Union Bank of England (1924) 1 KB 461. In his
judgment Bankes L.J. said that it may be asserted with confidence that the duty of non
disclosure is a legal one arising out of contract and that the duty is not absolute, but
qualified. It is not possible to frame any exhaustive definition of the duty. On principle,
the qualification can be classified under four heads;
(a) where disclosure is under compulsion
(b) where there is a duty to the public to disclose
(c) where the interest of the bank require disclosure; and
(d) where the disclosure is made by the express or implied consent of the customer.

The Court of Appeal held that the bank was guilty of a breach of a duty of secrecy and
awarded damages against it. Atkin LJ pointed out that the information which the bank
was supposed to treat as confidential, was not restricted to the facts it learnt from the state
of the customer’s account. The bank’s duty remained intact even after the account had
been closed or ceased to be active.

There are situations where a duty of strict secrecy would clearly be inappropriate. Some
of the exceptions were actually enumerated by Banks in Tournier’s case. These include;-
Where disclosure is under the Compulsion of the law

In Bucknell v Bucknell (1969) 1 WLR 1204 it was decided that a bank may be compelled
by law to disclose the state of its customer account in legal proceedings.

a) Evidence (Banker’s Book) Act Cap 7

Section 6 of the Act provides that on application of any party to a legal proceeding a
court may order that such a party be at liberty to inspect and take copies of any entries
in a bankers book for any of the purposes of such proceedings.
In Bankers Trust Co. Vs. Shapira (1980) 1 WLR 1274, two rogues obtained
substantial amount of money by presenting to the plaintiff bank in New York cheques
purportedly drawn on it by a bank in Saudi Arabia. The Court held that an order
would be granted in interlocutory proceedings, where the plaintiff sought to trace
funds of which evidence showed that they had been fraudulently deprived.

b) The Income Tax Act Cap 340, Section 131 (1)

Inorder to enforce provisions of the Act, the Commissioner or any other office
authorized in writing by the commissioner –
• Shall have at all times and without any prior notice full and free access to any
premises, place, books, record or computer
• May make any extract or copy from any record or computer stored
information to which access is obtained
 • May seize any book or record that in the opinion of the communication or
authorized officer afford evidence which may be material in determining the
liability of any person tax, interest, penal tax or penalty under the Act.
This section obliges the banker to disclose any information in its possession including the
dealings or affairs of its customer.

c) The Leadership Code Act, Cap 167, Section 28

The Inspector of Government is authorized by order under the hand of the Inspector
General or Deputy Inspector General to authorize any person under its control to inspect
any bank account or any safe or deposit in a bank. An order made under the section is
sufficient authority for the disclosure or production of any person of any information,
account, document or articles required by the person so authorized. These wide powers
were thought appropriate in fighting corruption.

d) Anti Corruption Act, 2009 Section 41(1)

Notwithstanding anything in any law contained the DPP or IGG by written notice in the
course of investigation or proceedings into or relating to the offence by any person
employed by any public body under the Act require the manager of a bank to give copies
of the accounts of that person or of the spouse or son or daughter of that person at the
bank. These provisions compel the bank in very clear terms to disclose the affairs of its
customer.

e) Inspection of Companies under ss. 173-184 of the Companies Act, 2012.

Section 176 provides that it shall be the duty of all officers and agents of the company
and agents of any other body corporate whose affairs are being investigated to produce to
the inspector all books and documents. Section 176(7) defines agent in relation to the
company or other body corporate to include bankers. But s. 184 makes it clear that the
company’s bankers are not required to disclose any information as to the affairs of their
customer other than the company.

f) The Financial Institutions Act, 2004.

The Act itself contain provisions which require the bank to disclose the customers affairs.
These include disclosing to the Credit Reference Bureau non performing loans which the
customer has failed to pay and information of customers involved in financial malpractice
including bouncing cheques due to lack of funds and frauds under s.78(2), revealing to
the Central Bank accounts which contain funds from the proceeds of a crime under
s.118(1), advertising in the print media unclaimed balances which have been on the
register of dormant accounts for more that three years under s.119(4), and informing the
national law enforcement agencies of any suspected money laundries activity related to
any account under s. 130(1).

However to plead compulsion by law, the disclosure must derive its authority from the
statute or court order. Casual inquiries by police officers because they suspect that a
crime has been committed is not covered.

In Standard Bank of West Africa v. A.G of the Gambia 1972 (3) ALR Comm 449 ,
the supreme court of Gambia held that a search warrant should issue against the bank
only if the bank is suspected of having committed the offence itself or of harboring
evidence directly connected with the crime, and should not issue in any case where an
inspection order might be made under the Bankers Books Evidence Act 1879 and the
court must be satisfied that the applicant has very good reason to apply for the warrant,
and it is not enough that the applicant hopes that in the course of the search he may come
up with evidence of the commission of the offence. The Court further held that an order
under the Banker’s Books of Evidence Act to inspect and take copies of entries should
only be given after the most mature and careful consideration because it is a grave
interference with the liberty of the subject. The various statutes compelling the banks to
disclose their customer’s affairs should not be used for a kind of searching inquiry or
fishing expedition.

g) Garnishee proceedings.
A court order for disclosure can be in the form of garnishee proceedings under Order 20
CPR. In such proceedings money held by a banker to the credit of a customer judgment
debtor may be attached to satisfy the judgment debt. The bank is called upon to show
cause why its customer’s money should not be attached. In these proceedings banks have
to disclose their customer’s affairs. Just because the amount of debt cannot be ascertained
 that alone does not defeat the claim of a garnish to attachment .

Where there is a duty to the public to Disclose.

This duty was described in the Tournier case as where a higher duty than the private duty
is involved e.g. where danger to the state or public duty may supersede the duty of the
agent to his principal. An example is in case where in times of war the customer’s
dealings indicate trading with the enemy. In Libyan Arab Foreign Bank v. Bankers Trust
Co. (1988) 1 Loyd’s Rep. 259 where the defendant bank invoked the exception in relation
to the disclosure made by it to, and at the request of, the federal reserve bank of New
York of the payment instruction which the defendant had received from the plaintiff. The
court was of the view that the exception was applicable.

Where the Interest of the Bank require Disclosure.

A typical case is where a customer brings a suit against the bank. In such case, the bank will
be allowed to reveal the customers affairs in court proceedings as part of its defense. In
Sunderland v. Barclays Bank Ltd (1938) 5 LDAB 163 a bank dishonored cheques drawn
on it by a married woman, principally because the account had insufficient credit balance,
but the cheques were drawn in respect of gambling debts. When her husband interceded at
her request, he was told by the branch manager that most of the cheques were drawn in
favour of bookmakers. She sued for breach of duty of secrecy. It was held that the disclosure
was in the interest of the bank.

Where the Disclosure is made by Consent of the Customer.

The consent may be express or implied and may be general in the sense that the bank is
permitted to disclose the general state of the customer’s account or special in that the bank
is entitled to supply only such information as is sanctioned by the customer. Answering
inquiries from another bank acting on behalf of the customer is within the scope of banking
business and the practice may be regarded as implicitly authorized by most customers of the
banks. In Parsons v. Barclays & Co. Ltd (1910) 2 LDAB 248, It was held that answering
inquiries is very wholesome and useful habit by which one banker arrives in confidence, and
answers honestly, to another banker, the answer being given at the request and with this
knowledge of the first banker’s customer.
 NO 4

WHETHER OR NOT PROSSY IS A CUSTOMER TO OKRA BANK?

WHETHER OR NOT OKRA BANK BREACHED IT’S DUTY AS A BANKER?

RESSOLUTIONS

WHETHER OR NOT PROSSY IS A CUSTOMER TO OKRA BANK?

For one to be a customer , he or she has to be with the account in the bank, In the
case of Iwa Kizito (Administrator of the Estate of the late Felix Charles Maku) vs. Equity
Bank (U) Ltd & Mindra Josephine HCCS No. 36/2013 stated that a bank customer has
been legally defined as someone who has an account with a bank or who is in such a
relationship with the bank that the relationship of a banker and customer exists.

Note however that an arrangement to open an account is sufficient to constitute one as a

customer as long as there is consensus ad idem between the two. In Ladbroke V. Todd
[1914] 19 Com. Cas 256 Court held that a person becomes a customer of the bank when
he goes to the bank with money or cheque and asks for an account to be opened in his
names. If the bank accepts the money and is prepared to open an account for that person,
then that person is a customer of the bank from that point.

Similarly in Woods v. Martins Bank Ltd (1959) 1 QB 55 a bank accepted instructions

from the plaintiff to collect money, pay part of it to a company he was going to finance
and retain to his order the balance of the proceeds. He had no account with the bank. It
was held that an agreement to open an account is sufficient to constitute the person a
customer of the bank.

In conclusion therefore, Prossy had an account in Okra Bank and thus is a customer to it
as it was held in the case of Ladbroke V. Todd [1914] 19 Com. Cas 256 Court held that
a person becomes a customer of the bank when he goes to the bank with money or cheque
and asks for an account to be opened in his names. If the bank accepts the money and is
prepared to open an account for that person, then that person is a customer of the bank
 from that point.

Issue 2 ; WHETHER OR NOT OKRA BANK BREACHED IT’S DUTY AS A

BANKER.

The banker has a Duty to honour a customer’s mandate where a customer gives a bank
instructions to honour his mandate when he has sufficient funds and the order is drawn from
with correct signatures, it has a duty to honour a customer mandate.In Stanbic Bank V
Uganda Crocs Ltd, The s/court stressed that a bank has a duty to act in accordance with the
customer’s mandate.

In Makua Nairuba Mabel V Crane Bank, Justice Obura emphasized that the duty of the
bank is to obey a customer’s mandate & in obeying it, it ought to do so with reasonable care so
as not to cause loss to the customer.

In John Kawanga &Anor V Stanbic Bank, Plaintiffs drew 2 cheques payable to various payees. When the
cheque were presented for payment, the defendant bank dishonoured them ,Plaintiffs sued for
wrongful dishonor of cheqes.it was held that the bank breached the contract when it failed to pay the
monies to the payee even after the Plaintiffs had confirmed with the defendant that the cheques were
properly drawn & authorized by them Duty to exercise reasonable skill & care.

The bank is required to exercise reasonable care in carrying out the customers operations. It
ought to verify customer since failure to do so and occasions loss toa customer, the bank may
be -held liable.

In Banex V Cold Trust Bank, if a banker pays & debits its customers account in reliance on
a signature being a customer which is not so, he cannot charge it’s customer with the payment
in paying cheques. A banker should not be negligent and cannot charge its customer with
money lost than their (banker’s) negligence.

In so Analysing, always the banker has a duty of skills and care in handling the
customer’s mandate , the Okra Bank breached the duty of closing the account of Prossy
without a Justifiable reason , in Stanbic Bank V Uganda Crocs Ltd, The court stressed that
a bank has a duty to act in accordance with the customer’s mandate. In so Analysing I advise
Prossy that he can successfully sue and she will be awarded damages for the loss incurred.
Similarly OKRA bank dishonoring a cheque of Prossy violates its’ duties as banker without
any justifiable reason as enshrined in the case of In John Kawanga &Anor V Stanbic Bank,
it was held that the bank breached the contract when it failed to pay the monies to the payee
even after the Plaintiffs had confirmed with the defendant that the cheques were properly
drawn & authorized by them Duty to exercise reasonable skill & care. In a Ugandan case of
Patel V Grindlays bank, Court stated that a trader whose cheque is wrongfully dishonoured
need not plead & prove special damages in order to recover substantial damages. The refusal of
payment is injurious to his/her trade,credit& commercial reputation & the damages should be
reasonable compensation for the injury. Thus prossy can successfully sue and be given
damages.