Facts:

The respondent was a customer of the appellant at its Garki Branch. A firm, Olumide Ayeni & Co., was also a customer of the appellant at the same branch. On 9th October 2006, the firm issued a cheque for N200,000 to the respondent. The respondent paid the cheque into his account with the appellant on that same day.

Later, on 13th October 2006, the respondent issued a cheque for N70,000 to a mechanic for the repairs of his car. When the mechanic presented the cheque to the appellant for payment, it refused to pay the cheque on the ground that the respondent lacked sufficient funds in his account. The appellant also endorsed “N10,452.12” on the back of the cheque as the credit balance in the respondent’s account.

Aggrieved, the respondent wrote a letter dated 16th October 2006 to the appellant protesting the dishonour of his cheque though his account was in credit and requested for his statement of account. The appellant received the letter on 17th October 2006, but did not respond to it. The appellant, however, credited the respondent’s account with N200,000 value of the cheque on 17th October 2006 after it had received the respondent’s letter.

Further aggrieved, the respondent instituted an action against the appellant at the High Court. He asserted that the appellant wrongfully dishonoured his cheque and therefore sought damages. The appellant on its part counter-claimed against the respondent for the sum of N1,512,750 as professional fees the appellant paid to its Solicitors to defend the appellant in the suit.

In a considered judgment, the trial court granted the respondent’s claim in part and awarded the sum of N4,000,000 as damages. It also held that the counter-claim was not proved and dismissed same.

Dissatisfied, the appellant appealed to the Court of Appeal.