MPAKANIYE v. BCR

MPAKANIYE v. BCR

- Source: Amategeko - Section: Decisions (Judgements) - Date: 2010-10-08 - Case/document no.: RCOMA 0024/10/CS - Collection: Supreme Court

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MPAKANIYE v. BCR [Rwanda URUKIKO RW’IKIRENGA – RCOMA 0024/10/CS (Nyirikwaya, P.J., Hatangimbabazi na Havugiyaremye, J.) 08 Ukwakira 2010] Check regulations – Non provisional check – Extourne – The bank from which the check giver comes has to pay the amount written on the cheque immediately after receiving it and finding out if is a provisional check – In case the bank refuses to pay the provisional cheque, the owner should reclaim it in the concerned court and the bank must be made answerable, on the illegal act to both its client and to the one the cheque is signed for. The bank had no right whatsoever of retrieving the amount of money it had deposited on its client account. Article 28 0f 10th December 1952 that governs check regulation. Damages – Interest on lateness is put at 18% – The advocates fees – He deserves fine interest equivalent to 18 % because appealing of BCR prevented him from doing profitable business which would yield interest. Facts:Ste ERWACO gave to Mpakaniye a check valued at 25.600.600 Rwf that he must withdraw in BCR where both do possess accounts, but the bank employer finds out that there is no sufficient money for the cheque. After a while ERWAKO did deposit money to its proper account then the bank made regulation by paying the cheque through putting the required balance to the Nampak’s account, the problem was manifested when ERWAKO

withdrew immediately the whole amount using BCR/Rubavu and deposited the money using BCR/Musanze, so this act make the ERWACO’s account stay with no balance because it retrieved the whole amount it gave to Mpakaniye. Mpakaniye took BCR to High commercial Court stating that he requested it refused to give him his money back. The court ruled that BCR had to take the money back to Mpakaniye with interest of 18 percent of lateness fine interest yearly. The bank was also asked to pay him the lawyer’s fees. On the whole, BCR owed Mpakaniye 30.432.958. Dissatisfied by the court ruling, BCR furthered the case to the Supreme Court stating that it owes nothing to Mpakaniye. Here Mpakaniye also appealed for that matter asking for compensation on spending much time on courting and denying him right to his money. He also asked his lawyer’s fees which was equivalent to 25.000.000 Rwf. Explaining on retrieving 25.600.600 Rwf from Mpakaniye’s account, BCR said that it had right to do it because it found out that ERWACO’s account was not provisional while making compensation. For this, Mpakaniye said that the fact that both ERWACO and he are clients of the bank means that compensation was not necessary while making regulation. Held:1.The bank had no right of retrieving the amount of money it had deposited on its client account because the client had absolute right on it. Therefore, the bank must take the money back to the client account.

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2. Fine interest on lateness is calculated at 18 percent because BCR appeal denied Mpakaniye of using his money on business which would yield him interest. Also he must be given his lawyer’s fee who helped him in courting process. So, the total amount he is owed is put at 7.001.764 Rfr. Appeal is no merit. The cross Appeal is merit in part. Statutes and statutory instrument referred to . Article 28 of 10th December on check regulation. No Cases was referred to: Judgment I. BRIEF BACKGROUND OF THE CASE [1] On 23rd February 2009, Mpakaniye presented to BCR Musanze branch a check from ERWACO which also had an account on the same bank and the check was valued 25.600.600 Rfr. Now that ERWACO’ as account was not full provisional, the bank employee waited until the account was fully provisional to make regulation. He did it on 27th February because this is the day ERWACO deposited some money on its account. On 3rd March 2009, BCR did retrieve it because on 27th February ERWACO withdrew 21.400.000 Rwf. Form Rubavu branch which made its account insufficient. [2] When Mpakaniye and BCR negotiated on getting his money back, the bank totally refused. So, he took the case to High Commercial Court which ordered the bank to take the money back to Mpakaniye’s account by RCom. 0218/HCC of 24th February 2010. The court also asked BCR to pay interest of lateness to Mpakaniye of 18 percent yearly

from 3rd March 2009 till 24th February plus lawyer’s fees which is equivalent to 300.000 Rwf and this makes a total of 30.432.958 Rfr. [3] BCR appealed in Supreme court stating that it owed nothing to Mpakaniye because retrieving operation was caused by ERWACO’s non-provisional check. Mpakaniye therefore appealed to High Supreme Court stressing that fine of lateness remained at 18 percent until 31 st August 2010. He also asked compensation which is equivalent to 3.000.000 due to time he spend on courting and depriving access to his money. He further asked his lawyer’s fee which was put at 2.500.000 Rfr. [4] The case was conducted in public on 2nd September 2010, where BCR was presented by lawyer Buzayire Angel awhile Mpakaniye Innocent was represented by Bimenyimana Eric. [5] In this case, the court thought about involving ERWACO in the court as BCR was requesting it but later decided against it because the company had no issue on the matter.

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II. LEGAL ISSUE OF THE CASE AND THEIR ANALYSIS [6] BCR says that it had right of retrieving 25.600.600 Rfr from Mpakaniye’s account that it had deposited on it because ERWACO’s account was not fully provisional while making compensation. When it made it provisional it also withdrew 21.400.000 Rwf through Rubavu’s branch. [7] BCR says that it derives this right from article 66 of general regulation governing banks and their clients which states, « toute inscription en compte d’une opération dont le dénouement n’est pas connu au moment de l’inscription est, sauf convention contraire, effectuée sauf bonne fin. A défaut de la réalisation de la condition ‘’bonne fin’’, la banque contrepasse d’office et sans préavis préalable l’inscription en compte » [8] BCR explains that its employee did account regulisation while doing transaction without waiting for compansation opreation. Surpisingly ERWACO withdrew its money from its account. The bank went on saying that based on article 66 mentioned above, it took the money it had deposited on Mpakaniye’s account which is even in other banks. What caused the proble, the bank continued, was the fact that the operations were conducted from 2 different branches ( Musanze’ branch where Mpakaniye took the check to and Gisenyi’s branch where ERWACO withdrew the money from) [9] On his side, Mpakaniye said that since the check spent 4 days in tha bank

waiting for ERWACO’s account to be full provisional and the bank did transaction, this operation needed no compensation as both Mpakaniye and ERWACO are clients of the same bank. The fact that operations were done from different branches could not cause a problem since the system in BCR is digitilized across the country. [10] Knowing if BCR had right of taking money from Mpakaniye’s account, the court stated that article 28 of 10th December 1951 governing check states that check is payed when it is presented. This means that the bank of the check giver is obliged to pay it as soon as possible provided that it is provisional. [11] The court ruled out that when the check is provional by the giver he to whom it is given has won the amount on it. So the bank has to pay it. [12] A lawyer expert called Dominique Legeais said that when a bank refuses to pay a check, it can be taken to court because this is regarded as an abuse and disgrace to the check giver and given. Also it is an issue when the bank lies that the amount which is on the account is less that that is on the check [13] This expert went on and said that giving somebody a check means that you have given him an amount of money written on it as long as is provisional. This means that with your check the bank is in your debt. He continued and said that the check giver cannot sign another check for the same money or withdraw it. Dominique concluded saying that this means that when any amount of money is given through check automatically the money goes to the check receiver. He also added that when the bank has received the check; it has to keep in mind that it must keep that amount.

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[14] As far as Mpakaniye’s issue is concerned, as shown by the document attached on the check from ERWACO in BCR, this bank kept the check from 23rd February 2009 until 27th February 2009. It is on this date therefore that BCR deposited the money on Mpakaniye’s account after finding out that ERWACO’s account is equipped enough. As the expert said above, when a bank receives a check the bank has to keep some money to pay the check. This means the check ERWACO gave to Mpakaniye would be the first priority. [15] Based on the explanation above, the court found out that BRC had no right whatsoever of withdrawing 25.600.600 Rwf that it had deposited to Mpakaniye’s account on 27th February 2009. So, the court ruled out that the bank had to give the money back to Mpakaniye. [16] As far as fine interest that Mpakaniye asks which are calculated at 18 percent from 3rd March 2009 till 31st August 2010 (547 days), the curt ruled out that he deserved it because BCR appeal deprived him right of not using his money in business that would yield hi some interest. So, he must be given 7.001.764 Rwf. It is calculated this way: 25.600.600 x 18 x 547 = 7.001.764 Rwf. [17] On the regards compensations, the court ruled out that he did not deserve them since High commercial court decided that he has to be given lateness fine. [18] On the regards the lawyer’s fee, the court ruled out that he deserved it

since he used him in court but the amount of 2.500.000 Rwf was brought down to 600.000 Rfr, including what High Commercial Court had asked to him. III.THE DECISION OF THE COURT [19] The court decided that BCR’s appeal is lawful but is no merit. [20] It decided that appeal based on Mpakaniye’s is merit in part. [21] It decided that the court decision went against BCR. [22] It ordered BCR to pay Mpakaniye 25.600.600 Rwf withdrawn from his account plus 7.001.764 as lateness fine mentioned above and 600.000 Rfw Rwf for his lawyer’s fee. [23] Ruyitegetse na none kwishyura umusogongero wa Leta ungana na 4% y’ayo mafaranga, ni ukuvuga 1.328.094 frw na 22.500 frw y’amagarama y’urubanza.