Chimuka Malambo Malawo v Stanbic Bank Zambia Limited (2024/HPC/387) [2025] ZMHC 87 (13 February 2025)

IN THE HIGH COURT OF ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdict ion) BETWEEN: ... CHIMUKA MALAMBO l,. ~ WO _ ~ 11:. , ~ ~1 1 3 r;: ' ., -_ ?i!IJ L .... .,J .!. ...... J , ·:---J ,,, AND STANBIC BANK ZAMB 1r'lil-MITEQ.(,s·KA _ _, P. O._B,....., 2024/HPC/387 PLAINTIFF DEFENDANT Delivered before the Honourable Mrs. Justice K . E . Mwenda-Zimba on the 131h day of February, 2025. For the Plaintiff For the Defen.da.nt Mr. G. S. Cornhi/1 of Wilson and Cornhi/1 Ms. J. R. Mutemi and Mrs. T. M. Kamanga of Theotis Mutemi Legal Practitioners JUDGMENT Cases referred to: l . Chrismar Hotel v. Stanbic Bank (20171 l ZR 54. 2. Mansfield Scott Investments Limited v. Barclays Bank Zambia Appeal No. 134 of 2023. 3. Bank of Zambia v. Attorney General /19741 ZR 24 (SCI. 4 . Sableland Limited v. Zambia Revenue Authority (2005/ ZR 109. 5 . Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited ll 941 I 2 All ER 165. 6. Kabwe Transport Company Limited v. Press Transport 11984/ ZR 41. 7. Kunda v. Konko la Copper Mines Plc Appeal No. 48 of2005 (unreported/. 8. Hitech Logistics Limited v. Uganda Italian Style Limited Appeal No. 80 of 2020. 9. Khalid Mohamed v. The Attorney General 1982 ZR 49. 10. Nyambe v. Total Zambia Limited S CZ No. 1 of 2015. 11. Barclays Bank Zambia Plc v. Patricia Leah Chipepa 12017/ 1 ZR 363. 12. Investrust Zambia v. Diab Appeal No. 197 of2016 (unreported/. 13. Phillips v. Barclays Bank UK PLC {2023/ UKSC 25. Other works referred to: 1. Paget's Law of Banking. 11"' Edition, Lexis Nexis. {Ed./ Mark Hapgood, pages 453-454. 2. Paqet's Law of Banking, 14"' Edition. Lexis Nexis, {Ed./ Mark Hapgood. 2007 at page 488. 3. Paget's Law of Banking. 13"' Edition. Lexis Nexis, {Ed./ Mark Hapgood. pages 150 and 407. 1.0. INTRODUCTION 1.1 The dispute in this matter stems from a banker client relationship. The plaintiff alleges that money was deducted from her account without her authority. The bank insists that the money was deducted using th e client's authorised and registered phone number. As a result of the above, the plaintiff claims- 1. the sum of USD32,550.00 being the sum unlawfully transferred from the plaintiff's account; 2. interest; and 3. costs and any further relief the Court may deem fit. 2.0. THE STATEMENT OF CLAIM 2.1. In the statement of claim of 29th May, 2024, the plaintiff alleges that she was a customer of the defendant and holder of a United States Dollar (USD) account No. 9130002798925 and a Kwacha account No. 9130003396685. In March, 2021, she noticed fraudulent activities on her account and brought them to the attention of the defendant via a letter of l 8 th March, 202 l. In J2 the lette r, she instructed th e d efendant to confirm a ll correspondence and transactions with her personal email address at chim.m.moore(cu,gmail.com and h er office telephone of 0211222250. However, ,vithout her confirmation or authority the defendant made the following unauthorised transfers from her USD account. DATE 11/10/2021 12/10/2021 13/10/2021 14/10/2021 15/10/2021 15/10/2021 22/11/2021 23/11/2021 AMOUNT USD5,000 USO5,000 USD5,000 USD5,000 USD2,500 USD50 USD5,000 USD5,000 2 .2. That the funds were then transferred or withdrawn from her Kwacha account. That despite several demands and reminders, the defendant refused or neglected to refund the said monies to the p laintiff. As a consequence, she suffered loss and damage. 3 .0. THE DEFENDANT'S DEFENCE 3.1. In its amended defence of 14th October, 2024, the defendant denied the plaintiffs claims and stated that it was the one that detected the fraudulent transactions on the plaintiffs account. J3 The defendant alleged that its officer physically followed the plaintiff to h er office to enquire if she had initiated the above transactions after numerous attempts to contact her via telephone failed. 3 .2 . It was the defendant's position that the plaintiff only wrote the letter dated 18th March, 2021, follovving an instruction from the defendant lo cornmence a formal investigation of the fraudulent transactions. That the letter only informed the defendant on how to communicate all correspondence on the account. 3.3. The defendant denied transferring the sum of USD32,550 wrongfully and averred that the plaintiff authorised the transfers of the said funds or was an accomplice for the following reasons: 1. an earlier alleged fraudulent activity took place on the Plaintiff's account between 31 •t December 2020 and 6th January 2021 using her phone number 097xxxxx98; 2. the plaintiff informed the defendant during its investigations that she had thrown away the sim card for phone number 097xxxxx98 and was no longer using the said phone number; 3. notwithstanding the aforesaid, the plaintiff continued to use the phone number after the aforesaid purported fraudulent activities and failed to inform the defendant to remove the number associated on her account despite being advised to do so by the defendant; 4. the plaintiff is estopped by her silence from asserting the purported fraudulent transfers and debit; J4 5. transfers to and from the plaintiff accounts were made using the plaintiff's aforementioned phone number linked to the account; 6. the phone number linked to the account could only access mobile banking through the plaintiff inserting her Personal Identification Number (PIN); and 7. no sim swap was ever detected by the defendant's software so as to justify an allegation that the plaintiff's phone number aforementioned had been cloned. 3.4. The defendant averred that any fraudulent activities are an attempt by the plaintiff to perpetuate fraud and siphon money from the defendant. In the alternative, the plaintiff contributed to any loss purportedly suffered when she continued using her phone number despite being advised of the fraudulent activities. That the plaintiff is being investigated by investigative ,i\Tings of government in both Zambia and a neighbouring country. 3.5. It was the defendant's position that funds transferred from the plaintiffs USD account and withdrawn from her Kwacha account were at the instance of the plaintiff. 4.0. THE AMENDED REPLY TO AMENDED DEFENCE 4 .1. The plaintiff insisted that she is the one who detected the fraud and physically attended the defendant's premises where she was attended to by Mr. Bbuku. She wrote the letter of 18th J5 March, 2021 to control how payments should be made from her account because of the fraud. She confirmed that the fraudulent activities between 31st Decemb er, 2020 and 6th January, 2021 were made using her phone number. That however, she stopped using her phone number 097xxxxx98 immediately the fraud occurred and started using 096xxxxx49. 4.2. Thal Lhird parties who participated in the fraud have since been appreh ended and are being p rosecuted by law enforcement agencies. That sh e was investigated, prosecuted and acquitted in the matters she was being investigated for which are unrelated to the matter herein. 5.0. THE EVIDENCE IN THIS MATTER 5 .1. The plaintiff, Chimuka Malambo Malawo, was the first witness. Her evidence V1ras a r ep etition of the statement of claim. Despite filing a bundle of documents, her witness statement did not refer to any documen t in the said bundle. 5.2. When cross-examined by Mrs. Kamanga, she denied setting up a Personal Identification Number (PIN) code to access her account. That she used to write letters to the bank every time she needed to make a withdrawal or transfer funds. She however admitted that she had no documentation to support her testimony. She conceded that her witness statement did not J6 account. She admitted that this information IS not In her vvi.tness statement or her statement of claim. 5.6. \1/hen referred to the defendant's defence, she admitted that her reply to the defence did not discount the allegation by the defendant that she was advised to remove her number. 5.7. In regard to the letter she wrote at page 114 of the defendant's bundle of docun1enls, she explained that she wTOte the letter without a recommendation from the bank as this was the second time. She insisted that in that letter, she told the bank to stop using the phone number. 5.8. She admitted that the letter does not say that the bank should be getting prior approval before authorising any transactions. She insisted that she asked the bank to de-link her phone number but conceded that she did not say this in her witness statement. 5.9 . She explained that she was worried when she learnt of the fraud and that it was important for her to tell the bank to stop using the phone number which she insisted she did as shown at page 114. That she gave the bank her email and work line for communication of all transactions. That previously she would communicate to the bank via email when she wanted to transact and that she would give the bank written instructions. JB state that this is what she used to do. She admitted that she provided the bank with her phone number 0975867898 which she confirmed was the same one in the release and indemnity form at page 113 of the defendant's bundle of documents. She confirmed that the said number was registered in her name and corresponds with her National Registration Card (NRC). 5.3. She denied having a PIN for mobile bar1king and using cell phone banking. She agreed that Mr. Munalula went to her office to advise her on the suspicious transactions on her account but denied the assertion that the bank notified her of the suspicious transactions. 5.4. When referred to the letter she wrote to the defendant at page 114 of the defendant 's bundle of documents, she agreed that in paragraph 2, she states that Mr. Munalula went to visit her upon her invitation. That he did not advise her to remove her phone number associated with her account. 5.5. She explained that there were two fraudulent activities on her account and that she was out of the country when the two activities were carried out. That she was expecting funds and she rang Mr. Bu ku, her relationship banker, who advised her that there were no funds in her account. That it was at this point that Mr. Buku sent her a statement of her current J7 5.10. When referred to the bank statement of h er USD account at page 6 of the defendant's bundle of documents, she stated that it was not her testimony that she gave the bank written instructions for all the transactions. 5.11. She testified that in October, 2021, transactions were made on her dollar account but it does not state whether there were credils or debits and the Court has no way of knowing whether they were credits or debits. She admitted that her witness statement states that she discovered the transactions in March, 2021 but the transaction she complained of happened in October, 2021. That this was for a previous fraud. She admitted that the witness statement does not state when she discover ed the fraud and added that she did not report the transactions to the police but that she reported to another law enforcement agency. However, she conceded that she did not have any document to support her claim. 5.12. When referred to the bank statement at page 6 of the defendant's bundle of documents, she admitted that she made the transactions of USD39,000.00, USD6,000.00, USD 6,120.00, cash of USD7,838.41 and that they were fairly large transactions. That the transaction of USD5,000.00 1s suspicious because of the way it was submitted. J9 5.13. When referred to the bank statement at page 7 of the defendant's bundle of documents, she confirmed that on 25th November, 2021, she made two cash withdrawals of USD2,000.00 each, USD5,000.00 and the USDl0,000.00 in the subsequent month. That such transactions were normal. 5.14. She confirmed that in paragraph 8 of her witness statement, she stated that she stopped using her n;obile nu1nber. She admitted not having stated when she stopped using her mobile number. She stated that her witness statement does not say anything about taking any steps to block airtel to stop using the phone number. 5.15. In further cross-examination by Ms. Mutemi, she admitted that her testimony to the effect that she transacted through letters and emails was an afterthought. She confirmed being aware that the transactions were done using her phone number. That the number was not hers at the time. She denied the contention that since the transactions were done using her phone number, then it was activated for cell-phone banking as she did not perform any investigations. 5.16. When referred to the letter from the defendant to her lawyers wherein it was stated that her phone number was linked to the defendant bank, at page 118 of the defendant's bundle of J10 documents, she a dmitted that there is no letter from her lawyers refuting that her number was linked to the bank. 5 .17. When referred to the 2nd paragraph of the letter from the bank to her advocates, at page 119 of the defendant's bundle, she stated that there is no letter from her advocates disputing the contents of the said letter. 5 . 18. \. Vhen referred to paragraph 6 .6 of the an1ended defence, where the defendant alleged that she continued using her number, she admitted that she did not dispute the a llegation in the reply to the defence. 5.19. She testifie d that her account was hacked. That this is as shown at paragraph 7 of her witness statement. That she did not know if her account was still hacked from 11th October, 2021 to 23rd November, 2021. She denied that her account was still hacked until 23rd November, 2021. When referred to the online publication at page 115 of the defendant's bundle of documents, she denied being investigated. 5.20. When referred to the publication at page 117 of the same bundle, she a dmitted that she was arrested for unauthorised possession of military attire which suggests criminal activity on her part. That she has not brought any evidence of a n acquittal. J11 5.2 1. In re-examination, she testified that in paragraph 3 of h er letter at page 114 of the defendant's bundle of documents, she was trying to tell the bank to stop using h er current contacts. 5.22. The s econd witness in this matter was Munalula Nakushowa, the Head of Forensic Services at the defendant bank. His testimony was that sometime in March, 2021, he noticed some suspicious trar1sactions on the plaintiffs account being initiated throu gh her mobile phone. That in exercising reasonable skill and care, the defendant tried to contact the plaintiff on several occasions, via telephone, for purposes of scheduling a meeting to no avail as the plaintiff advised that she was unavailable for a meeting. 5.23. Following the failed attempts to meet her, he was prompted to follow the plaintiff to her office to enquire whether she was the one who had carried out the suspicious transactions on her account which she denied . He advised her to formally write to the defendant to remove cell phone number 260975867898 from her mandate with the bank so that it could no longer be used for mobile banking and online transactions. To his surprise, on 18th March, 202 1, the plaintiff wrote a letter, appearing at page 114 of the defendant's bundle, merely informing the defendant on how to communicate all J12 correspondence on the account with out giving an instruction to de-authorise the use of h er mobile phone number which was linked to her a ccount. 5.24 . According to him, the manner in which the letter was couched gave the defendant the impression that the plaintiff was not interested in removing her cell phone number from being used for mobile and online transactions for reasons known to herself. That in essence, the plaintiff was given an opportunity to prevent fraud on her account by formally and expressly changing her mandate by removing the use of her cell phone or by giving the defendant instructions to terminate her mobile banking services . 5.25. He testified that a few months after the letter of 18th August, 2021, between 11 th October, 2021, and 23rd November, 2021., the plaintiff continued to use the same cell phone number to make various fund transfers from her dollar account to her kwacha account which were subsequently withdrawn from the kwacha account. These are the disputed transactions listed in the statement of claim. 5.26. He further relied on the bank statements at pages 103 to 105 of the defendant's bundle of documents to show that on 11 ch October, 2021, the said amount of USO 5,000.00 was J13 tr ans ferred to the plaintiffs Kwacha account which represented a credit ofZMW84,039.00. The amount was withdrawn through MTN Bank to wallet transfers and sent to seven different n u mbers in batches of ZMW20,000.00. That the same happened to the transfer ofUSDS,000.00 on 121h October, 2021 and also represented a credit of ZMW84,039.00. That the amount was also v.rithdrawn bul Lhrough Airtel Bai.,k to wallet transfers. That the same happened to all the other fund transfers highlighted by the plaintiff in the statement of claim. 5.27. He insisted that the defendant had the mandate to process all transactions made through the plaintiffs cell phone number that she provided to the defendant for mobile and online banking. Additionally, that the plaintiff had to provide a PIN in order for her to access mobile banking once she dialled *247# after which she would be able to transact. That once the PIN was provided, the defendant had the mandate to process the transaction. That only a person who has access to the PIN can transact and it was the duty of the plaintiff to safeguard her PIN against use by third parties. 5.28. He added that when the transfers were being made, there was nothing to put the defendant on inquiry to suspect fraud as, firstly, the plaintiff did not remove her number from the J14 mandate and allowed the use of her phone number. Secondly, after the first incident of suspicious transactions, the defendant installed sim-swap detection capability software that would be able to detect if a new sim was being used or if it ,-vas cloned which wa::; not the case in thi::; matter. 5 .29. That when the plaintiff was questioned on the whereabout of her sim card, she mentioned that she had thrown it av,,ay. That if indeed this was the case, the sim-swap detection software would have been able to detect if a new sim card was issued with the same phone number. This was not the case as it was the same sim card that was registered that was performing the transactions in question. 5.30. He insisted that the plaintiff perpetuated the purported fraud by continuing to use the same phone number she claimed to have thrown away. More so because the plaintiff had other banking mediums at her disposal and could have utilised the option of issuing instructions to the defendant through facsimile or email as agreed in the release and indemnity form at page 112 of the defendant's bundle of documents. 5. 31. He testified that the defendant's unwavering confidence that the plaintiff is the author of the transactions and seeking to unjustly enrich herself is strengthened by an Article in the J15 Malawi Nyasa Times online publication da te d 3 1st Augus t, 2016, in which she was being investigated for being paid billions by the Malawi Defence Forces as a supplier in dubious contracts. He referred me to a copy of the said publication at page 115 of the defendant's bundle of documents. That a t page 117 is another Article published on 'Mwebantu' news website on 2 nd February, 2022 where it was s ta ted that she had been arrested for unauthorised possession of military attire. He added that whether the statements were true was immate1ial but the fact that they were made raised suspicion as to the plaintiffs character and intentions especially that the purported investigations related to financial crimes. 5.32. He pointed out that when the plaintiff wrote a demand letter for the sum of USD32,550.00, the defendant denied liability in a letter dated 17th March, 2022, a copy of which is at page 118 of the defendant's bundle of documents. In the same letter, the defendant informed the plaintiffs advocates that the plaintiff was aware that transfers from her account were being made from her account u sing her phone n u mber linked to the account but failed to take appropriate safety measures. In similar fashion, the defendant wrote another letter dated 27,1, April, J16 2022 , appearing at page 119 of the same bundle, but the plaintiff failed to instruct th e defendant to remove the number. 5.33. He testified that the defendant 's posit ion has always b een that the plaintiff is not entitled to any of t he reliefs as she breached her duty to refrain from fa cilitating the alleged frau d when she failed to issue the necessary instruction to prevent the u se of h er phon e numb er . 5.34. In cross-examination, he was referred to the release and indemnity form at page 112 of the defendan t's bundle of documents. He denied the assertion that this document allowed telephonic transfers. When asked about paragraphs A and B of the same document, he explained that the paragraphs are instructing the bank to act on instructions via facsimile, transceiver and email. When referred to paragraph 3 of the letter from the plaintiff at page 114 of the defendant's bundle of documents, he stated that the plaintiff was confirming all correspondences including bank transactions on all accounts. 5.35. When referred to page 1 of the defendants bundle of documents which was a bank statement for the plaintiff's US dollar account, he clarified that there is no transfer by telephone or cell phone. That in relation to the transaction dated 11th December, 2019, for the sum of USD95,000.00, he could not J17 tell if it was made by telephone. He explained that on the statement, it is difficult to tell if the transaction was by cell phone unless one goes into the system. That this was the case in relation to the transaction on the 30 th of April, 2021, written "Funds transfer USSD". That he could not tell which ones are telephone transactions. That he suspected the ones which have U8SD are telep hone or cell phone transactions. That the ones written "Funds transferred USSD" do not show the mode or recipient and that h e did not know why. 5.36. He explained that th e transactions from 11 th October, 2 02 1 to 15th October, 2021 are mobile money transactions and he suspected that they were cell phone transactions even t hough the entry does not show the cell phone number. He however could not tell why the entry did not show the number unless he went into the system. He explained that the bank statement was a part of the bank system and that not all cell phone transactions will read the same. He further explained that if a client is transferring money from a bank account to an airtel account, it will not show the number. 5 .37. He confirmed that the transfers at page 6 of the defendants bundle of documents from the 11 th to 15th of October , 2021, J18 were made to the plaintiffs kwacha account and that her phone number 0975867898 was linked to both her accounts. 5.38. When referred to the bank statement appearing at page 103 of the defencia.nt's bundle, he explained that from his investigations, the same number, 0975867898 was used to carry out transactions on the 11th of October, 2021 from the 2 11d entry at page 103 of the same bundle . That the 3rd entry on the same page has +260965084 l O 1 as the number indicated whilst the number sending is not indicated. He explained that the reference is the service provider for the number receiving. That the MTN Bank to Wallet of the number +260965084101 is not the number sending. 5.39. He testified that he initially visited the plaintiff to ask her whether she was the one transacting. That this was the first instance of suspected fraud. That on the second instance of the fraud, he could not recall who raised the concern first but he thought it was the plaintiff. 5 .40 . When referred to the Article at page 115 of the defendant's bundle of documents, he stated that this Article was brought to the attention of the defendant during the investigation of the first suspicious transactions. He conceded that the publication is not confirmation of an offence. J19 5.4 l. When referred to the Article at page 11 7 of the defendant's bundle of documents, he admitted that the offence is not a financial crime but possession of military attire. 5 .42. In re-examination, he clarified that he visited the plaintiff on 18th March, 2021. He explained that telephone transfer means transactions being done using a mobile device. That the bank has given its customers various methods of transacting and the custon1ers can chose which mode and mobile banking is one of them. 5.43. In regard to the Article from Malavvi he explained that the defendant was not part of the investigation and he therefore could not confirm whether that was a crime or not. 6.0. THE PLAINTIFF'S FINAL SUBMISSIONS 6. 1. On 14th January, 2025, Mr. Cornhill filed final submissions on behalf of the plaintiff. He began his submissions by giving the plaintiffs version of the evidence presented. He argued that there is a contractual relationship between the plaintiff and defendant which gives rise to certain obligations on both sides. In support of this position, he relied on the case of Chrismar Hotel v. Stanbic Bank. OJ 6 .2. That as a result of the contractual relationship, a bank owes several duties to its customers as explained in the case of J20 Mansfield Scott Investments Limited v. Barclays Bank Zambia.l2 > He pointed out that it was the defendant's witness' testimony that he informed the plaintiff first about the suspected fraud which resulted in her Jetter to the defendant exhibited at page 114 of the defendant's bundle of documents. That in cross examination, the plaintiff testified that she had not signed up for cell phone banking and, therefore, did not possess a PIN number. 6.3. He further referred me to the learned authors of Paget's Law of Banking atpage453-454 to set out the scenarios where a bank will be held liable and where the burden of proof lies. That accord in g to the authors of Paget's, the defendant did discharge its burden of proof by demonstrating that the plaintiff was at any point issued a PIN and that the said PIN was used in the disputed transactions, if at all. (Sic) 6.4 . He pointed out that only a bank can debit a customer's account and that the defendant was clearly on notice that some fraud had taken place on the plaintiff's account. That no evidence was adduced by the defendant showing that the plaintiff confirmed the transactions performed on her account between 1st October, 202 1 and 23,.d November, 2021 either by em ail or telephonically as instructed in her letter to the bank dated 18th March, 2021. J2 1 He submitted that this letter was the plaintiffs mandate to the defendant which it disregarded and is therefore liable. In support of this position, he relied on the case of Bank of Zambia v. Attorney-Gen.era1.<3> 6.5. In response to the defendant's contention that the plaintiff only wrote the letter to confirm how correspondence would be conducted going forward and did not specifically instruct the bank to remove her number from the account, he argued that the plaintiff testified that she discontinued the use of the number. That no evidence was produced by the defendant to rebut this assertion . That it is only logical and should have been implied that the plaintiff intended that every transaction on her account be confirmed by h er either by email or a telephone number she had provided. In support of this position, he again relied on Chrismar Hotel v. Stanbic Bank<1> cited above. 6.6. In relation to the defendant's position that the plaintiff participated in the fraud and attempted to perpetuate the fraud, he argued that it is trite that fraud must b e specifically pleaded and proved at trial. That the standard of proof is higher than on a balance of probabilities. In this regard, he placed reliance on the case of Sableland limited v. Zambia Revenue Authority c•> and Joseph Constantine Steamship Line limited v. Imperial Smelting J22 Corporation Limited. < 5> That the defendant d id not adduce any eviden ce to support its position that the plaintiff perp etua ted or was complicit to the fraud that led to her loss. That it a ppears that the defendant is asking this Court to infer fraud from the irrelevant and u nrelated evidence p r odu ced. That even if there h a d been convictions in the m atter s refer red to by the d efendan t , they would not have any b earin g on the matter at hand and t hat the criminal convictions of the plaintiff would not absolve the defendan t from defending their c a se with concrete proof. He relied on the case of Kabwe Transport Company Limited v. Press Transport(6) to this e ffect . 7 .0. THE DEFENDANT'S FINAL SUBMISSIONS 7 .1. On 29th J a nua ry, 2025, Ms. Mutemi a nd Mrs. Ka m anga filed final submissions on behalf of the defen dant . They also began their submissions by givin g a r ecollection of the defenda nt's version of the evidence presented in this matter. 7.2. On wh o b ears the burden of proof, they argued that the burden of proof rests on the p laintiff to prove its case on a ba la nce of probabilities as held in- 1. Kunda v. Konkola Copper Mines;<1 > 2. Hitech Logistics Limited v. Ugondo Italian Style Limited;(8) and 3. Khalid Mohamed v. The Attorney-General. 19> J23 7 .3. On whether or not USD32,550.00 was transferred from the plaintiff's account, counsel argued that the plaintiff's witness statement does not contain any evidence that shows the type of transact ions in question, that is, whether they were debits or credits. 7.4. On whether or not the transactions on the plaintiff's account were authorised by her, they pointed out th at in cross examination, the plaintiff confirmed that the information contained in her witness statement concerning how she transacted on her account was an afterthought and that she did not produce any evidence to demonstrate the manner in which she had previously transacted in comparison to the manner in which the transactions in question were conducted. That in the absence of su ch evidence, the plaintiff's assertion remained unsubstantiated. 7.5. In regard to the plaintiff's claim that she wrote a letter dated 18th March, 202 1, instructing the defendant to verify her transactions either via email or telephone, counsel argued that the plaintiff wrote a letter merely informing the defendant on how to communicate all correspondence on the account without giving the defendant an instruction to de-authorise the use of her mobile number linked to her account. That the plaintiff J24 conceded in cross-examination that she was the one confirming that correspondence and transactions should be communicated to her through her work line or email and not that the defendant was required to obtain prior approval before proceeding with any transaction. 7.6. They submitted on the literal rule of interpretation and relied on the case of Nyambe v. Total Zambia Limited 110 > to submit that based on the literal rule of interpretation, the letter cannot be said to be an instruction to the defendant to confirm each transaction on the plaintiff's account prior to processing it. Counsel emphasised that the defendant was under no obligation to seek prior approval or confirmation before processing transactions. That such an instruction would be impractical and not feasible in the context of mobile banking transactions. 7.7. It was counsel's assertion that the plaintiff personally authorised the transfers as outlined in paragraphs 6 to 6.7 of the amended defence. That the plaintiff continued to use her phone number linked to her account and failed to take any steps to remove the same for purposes of preventing any further suspicious or fraudulent transactions. In this regard, they fortified their argument by the testimony of Mr. Nakushowa that J25 he advised the plaintiff to submit a written request to the defendant instructing it to remove her phone number from her accounts. That the testimony by Mr. Nakushowa remains uncontested and in fact corroborated by the plaintiff's evidence where she acknowledged that she was confirming her preferred method of communication and not requesting the defendant to discontinue or de-authori~e the mohi1e number associated with the account. Counsel also referred me to the plaintiffs testimony where she was referred to the letter at page 119 of the defendant's bundle of documents to show that she conceded that there was no evidence to dispute its contents. 7.8. They submitted that the plaintiff failed to act in accordance \1\11th the defendant's advice thereby exposing herself to potential risk of fraud . Counsel emphasised that since the relationship between a banker and customer is a contractual one governed by common law, the customer owes the bank a duty of care to refrain from facilitating fraud or forgery. In this regard they referred me to the authors of Paget's Law of Banking, 14u, Edition, on the customers duty to the bank. 7 .9 . Counsel submitted that the defendant's position is that the transactions were initiated by the plaintiff. That since the mobile number used to conduct the transactions in question J26 was registered to the plaintiff, it can conclusively be stated that the plaintiff, as sole user of both her bank accounts and mobile number, was the individual who performed these transactions. They added that despite the plaintiff's assertion that she <:eased using her phone number, no evidence was presented as to the specific date or period when she discontinued the use of the said phonP. numhP.r. That fllrther; shP- admitted that she did not inform the defendant that she had stopped using the number. 7.10. They pointed out that the plaintiff also conceded that she did not include the assertion that she did not register for mobile banking and admitted that this claim was merely an afterthought. 7 .11. They submitted that the defendant possessed the necessary mandate and authority to process the transactions made by the plaintiff as firstly, the plaintiff failed to instruct the defendant to deauthorise the use of her mobile number. Secondly, that the plaintiff was the sole user of both her phone number and account number. Thirdly, that the plaintiff provided the defendant with her PIN when accessing her mobile banking services. In support of this position, counsel referred me to the case of Barclays Bank Zambia Pie v. Patricia Leah Chi1,2epa <11> and lnvestrust Zambia v. Diab <121 and added that where the defendant J27 receives an instruction to make a debit of the account, it i.s primafacie bound to honour the said instruction. 7.12. They noted that the uncontested evidence of Mr. Nakushowa outlined in paragraphs 15 and 16 of his witness statement indicates that the defendant installed a sim-swap detection software capable of immediately detecting if a new sim card had been issued using the same number or if the sim card had been cloned. That this was not the case as the transactions were carried out using the same sim card originally registered with the plaintiff. 8.0. CONSIDERATIONS, FINDINGS AND CONCLUSION 8.1. I have carefully considered the evidence before me, the parties' pleadings, submissions and authorities cited. 8 .2. From the evidence on record, it is not in dispute that the plaintiff held a USD and Kwacha account with the defendant . Further, sometime in March , 2021, she met with the representative of the bank, Mr. Nakushowa, and discussed some suspicious activities on her USD account. Following this meeting, on 18th March, 2021, she wrote a letter to the defendant bank which appears at page 1 14 of the defendant 's bundle of documents. J28 8 .3 . Between October, 202 1 and November, 2 021 , and after writin g the aforementioned letter, s everal suspicious t ransactions occur red where m oney from her USO accoun t wa s t ra nsferred into her Kwacha account and later ,:vithdra"v1.1 via 1nobile money. 8 .4. What is in dispute however, is whether the said tra nsactions were done i,\,'ith her authority. 8.5. In a ddressing the a bove d ispute, I mu s t determ ine what the bank's mandate was in regard to the plaintiff as its customer in this case as well as th e duties of each party . 8 .6 . In the case of Mansfield Scott Investments Limited v. Barclays Bank,(2) the Court of Appeal, whilst d iscussing the duty of care owed by a bank to a cu stom er, also d efin ed what a bank's mandate is. They s tated tha t - "We will now address the duty of care, owed by a bank to a customer. The principles of banking law is the basic duty under the contract between a bank/ customer to make payments from the credited account in compliance with the customer's instructions. The terms upon which a bank is authorised and undertakes to carry out the instructions is referred to as a bank's mandate issued by the customer. Therefore, where a bank receives instructions, in accordance with the mandate, the duty of the bank is to simply carry out the instructions promptly. The bank is not concerned with the risks of the paying instructions." (underlining for empha sis only] J29 8 . 7. In the UK case of Phillip v. Barclays Bank UK PLc,t13 > the Court had the followin g to s ay a bout the effect of a banks mandate: "The bank's mandate 29. As in the case of every contractual agency, a bank is bound to act In accordance with the authority conferred up on it by its principal and to perform what it has agreed to do: see eg Bowstead & Reynolds on Agency, 22nd ed (2021), article 36. The terms on which a bank is authorised and undertakes to carry out its customer's instructions to make payments are generally referred to as the bank's mandate from the customer. 30. Unless otherwise agreed. the bank"s duty to comply with its mandate is strict. Where the bank acts outside the mandate by making a payment which the customer has not authorised. it cannot debit the customer's account. Conversely. where the bank receives an instruction to make a payment given in accordance with the mandate. the ordinary duty of the bank is simply to carry out the instruction and to do so promptly. In Bodenham v Hoskins (1852) 21 LJ Ch 864. 869, Kindersley V-C said that: " ... the banker looks only to the customer, in respect of the account opened in that customer's name, and whatever cheques that customer chooses to draw, the banker is to honour. He is not to inquire for what purpose the customer opened the account; he is not to inquire what the monies are that are paid into that account, and he is not to inquire for what purpose monies are drawn out of that account: that is the plain general rule, as between banker and customer ... " [un d erlining for emph asis only] J30 8.8. As regards the duties of each party the learned authors of Paget's Law of Banking, 13th Edition, Butterworths (LexisNexis) guide as follows at paragraph 17.261 "Where a customer uses an A TM or EFTPOS card together with his personal identification number (PIN). the correct PIN entered by the customer is mandate for debiting his account. But what if the PIN is typed in by an unauthorised person? A forged or unauthorised signature on a cheque does not represent the customer's mandate and the bank is not entitled to debit the customer's account. Whether the same strict rule should apply in the case of the unauthorised use of the PIN is less certain ... " [underlining for emphasis only] 8.8. At paragraph 17.262, the authors add that- "The burden of proof becomes an important issue when a customer alleges that he did not use or authorise the use of his PIN (or card) to withdraw or transfer funds . This issue is especially relevant in the case of so-called 'phantom withdrawals' which, broadly speaking, refer to the situation where a customer has allegedly used a card and PIN at an ATM, had his account debited by the bank and later claimed that the card and PIN was not used by him nor by an authorised third party. 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 (1) the PIN was used, and (2) its use was authorised by the customer. This may prove difficult. .. " J31 8.9. To narrow down the issue and relate more to electronic instructions, as in th e present case, paragraph 17.161 puts it as follows : "Problems over mandate may arise where the bank receives funds transfer instructions through the use of an electronic access device. eg via a computer terminal. where the customer uses a password or access code. The rule that a bank has no right to debit its customer's account where it acts on a forged or unauthorised mandate is well established for forged cheques and is premised on banks being 'bound to know the hand-writing of their customers'. In other words, a hand-written signature is individual to, and identifies, the signer. By contrast. the use of an electronic access device merely authenticates the instruction, it does not identify the person who actually gave it. What if a third party has assumed control of the access device or bypassed it altogether? From the bank's point of view, any technologically effective entry of the access code appears to be a valid authorisation. This situation may be covered by the express terms of the contract between the bank and customer, in so far as they are not rendered ineffective by relevant legislation. Nevertheless, it has been persuasively argued by Geva that in an electronic environment. the bank's liability should not be strict, as in the case of the drawer's signature being forged on a cheque. but instead premised on its negligence. with a correspondent duty on the customer to exercise reasonable care and diligence to prevent unauthorised electronic funds transfers. Geva continues: In the electronic context. we are concerned with "systemic negligence", by the bank organisation as a whole, on the level of implementing satisfactory computer as well as office procedures... Accordingly. a bank establishing a reasonable security procedure for verifying electronic authentication has J32 discharged its contractual obligation to the customer and may be justified in debiting the customer's account once the procedure has been pursued." [underlining for emphasis only] 8.10. The question remains; what was the bank's mandate as regards mobile banking in this case? 8 .11. At pages 112 and 113 of the defendant's bundle of documents is a release and indemnity form . This form contains directions on how the bank is to act on instructions transmitted to it by the plaintiff via facsimile, transceiver and email. It states that- " RELEASE AND INDEMNITY A. WHEREAS I/WE have requested the Lusaka Branch of Stanbic Bank Zambia Limited ("The Bank) to act on instructions transmitted by me/us to it by facsimile transceiver and email; AND WHEREAS the Bank has informed me/us that it is prepared to act on faxed and emailed instructions which purport to emanate from me/us if it receives a release and indemnity in the form hereof; ... " 8.12. The above release and indemnity form above states that the plaintiff requested the defendant to act on instructions transmitted to it by facsimile, transceiver and email. It does not state that the bank could act on instructions from the plaintiff made via mobile banking. It is interesting to note that this indemnity and release form was signed by the plaintiff after the first set of suspicious transactions were noted by both the J33 plaintiff and defendant. It would also appear that mobile phone transactions were not covered in this form as the plaintiff was already accessing them. I say so consider ing transactions on the plaintiffs bank statement at pages 77 a nd 78 on the 5 th of January, 202 1 and 6 th January, 2021 . On these dates, transactions of ZMW50,000.00 and ZMW20,000.00, respectively are linked to the phone number in issue of 097586 7898. These transactions are before the date of the indemnity form. This shows that the plaintiff was already accessing mobile transactions. 8.13. The above notwithstanding, the plaintiff contended, during cross examination that she was not registered for mobile banking. 8 .14. It should be noted that throughout her plea dings, that is the statement of claim and her reply to the defendant's defence, the plaintiff did not, at any point, contend that s h e was not registered for mobile banking. In paragraphs 6.6 and 6. 7 of the defence, the defendant alleged that- "6.6 the phone number linked to the account could only access mobile banking through the plaintiff inserting her personal identification number (PIN); and 6. 7 no sim swap was ever detected by the defendant software so as to justify an allegation that the plaintiff's phone number aforementioned had been cloned." J34 8.15. In her reply to the above, she alleged that- "the plaintiff denies the contents of paragraphs 6.2, 6.3, 6.4, 6.5, 6.6 and 6. 7 and avers that she stopped using the Airtel number 097xxxxx98 immediately the fraud occurred and started using an MTN number 096xxxxx49 and repeats the contents of paragraph 2 above." 8.15. Clearly, the plaintiff did not deny the assertion that her mobile number was linked to the account and that she accessed it using a PIN. The issue of her not being registered for mobile banking was not pleaded, was not disputed and did not arise in the pleadings or her evidence in chief. It is only at the point of cross examination that she raised the issue showing that it was an afterthought. ln fact, when cross examined, she admitted that the evidence that she did not register her phone number for mobile banking was indeed an afterthought. From the above, I dismiss the plaintiffs evidence that she was not registered for mobile banking as being an afterthought. Instead, I find that the pleadings and evidence on record point to the fact that she was registered for mobile banking and accessing it. 8.16. My views above are buttressed by the evidence at page 91 of the defendant's bundle which shows the plaintiffs bank account. A perusal of the statement of accounts on this page reveals that the plaintiff transacted on her account using the disputed J35 n umber 0 9 75867898 via Airtel bank to wallet and instant money voucher issuance using the same number. If the plaintiff had tn1ly thrown away the sim card for the said number, as she alleges, why are there transactions on the san1e nun1ber, which transactions she has n ot disputed, a month later, after the a lleged disposal of the sim card or after she was a lerted by Mr. Nakushowa in fv'lru:ch, 2021? 8 .17. In addition, these transactions have neither been complained of, disputed nor has the plaintiff flagged them as suspicious. I, therefore, hold the view and find that the plaintiff was still using the same phone number linked to her bank account and continued carrying on transactions using U1e ~wue phune number. 8.18. The plaintiff also alleged that she wrote a letter to the defendant requesting that all transactions be confirmed via a specific email and a landline phone number. The said letter relied on by the plaintiff is exhibited at page 114 of the defendant's bundle of documents. She insisted that according to paragraph 3 of the said letter, she instructed the defendant bank to remove her phone number from her mandate. The letter is in the following terms: J36 "Dear Sir/Madam, RE: FRAUDULENT ACTIVITIES ON MY ACCOUNTS- 9130002798925/9130003396685 The above subject matter refers. Following th_e meeting I had with Mr. Munalula this morning 18'" March, 2021 at my office regarding fraudulent activities on my accounts. I wish to confirm all correspondences including bank transactions on all my accounts held at your bank to be communicated to me via my email: chim.m.moore@gmail.com and contact me through my work line: 0211222250. Should you need any clarification, please do not hesitate to contact me." Yours faithfully , Chimuka Malawo." 8.19. Despite the plaintiff insisting that she advised the bank in the above letter to stop using the number 0975867898 for her transactions, the said phone number does not appear anywhere in the aforementioned letter. There is evidence that Mr. Nakushowa advised her to write to the bank so that the disputed number is no longer connected to her account. There is no evidence th at she did this. The letter only gives the defendant instructions on how to confirm all correspondence including bank transactions. It does not inform the bank to remove the above mobile number, 0975867898 from the bank mandate. I therefore find that the plaintiff did not write to the J37 bank to remove the phone number 0975867898 from the account details in the defendant bank. 8 .20 . I must add that despite insisting that the said letter required the bank to s eek prior approval from the plaintiff before carrying on any transactions, the said letter does not state that. The authorities I have cited above state that the duty of a bank to fo llow th e mandate given to it by a customer is strict. This entails that the plaintiff needed to give the bank specific instructions to either de-link the disputed sim card which she had 'thrown away' from her account. The bank cannot do so without instructions . 8.21 . In any case, the nature of electronic bank transactions does not give the bank an opportunity to seek prior approval of every transaction via either email or landline from a customer before processing a transaction. The argument is not tenable. This is because that is the nature of electronic bank transactions. Everything is processed and authenticated on the electronic system. 8.22. I must state that it is odd that money was transferred from the plaintiffs USD dollar account to her Kwacha account and further withdrawn from her phone number which is said she J38 threw away. Everything was being done on h er accounts and phone number and not for third parties. 8.23. I have placed the words 'thrown away' 1n inverted commas earlier as the plaintiffs evidence to this effect is a lso questionable. She does not state vvhen the sim card was thrown away. Further, despite being informed that suspicious transactions were being processed on this phone number, she failed to secure the number but decided to throw it away meaning the sim card could b e accessed by anyone . Meanwhile, in her letter quoted above, she had not instructed the bank to delink the said p h one number from her accounts. In addition, there is no evidence to show that she reported the use of the said sim card she had thrown away to Airtel or a law enforcement agency. Even ifit was true that she threw away her sim card, she did not take any reasonable steps to prevent fraudulent activities on her account such as reporting the suspicious transactions or blocking the sim card and issuing a fresh mandate to remove the phone number from her mandate with the bank . This further makes me question the credibility of her evidence. 8 .24. Further, the defendant's evidence that there was no detection of a sim swap on its system was not challenged. Her evidence J39 that third parties who took part in the fraud are being prosecuted has not been substantiated. This further shows that the entire evidence by the plaintiff was an afterthought. 8 .25. In fact, the defendant's witness testified that when he not.iced that some suspicious transactions on the plaintiffs account being initiated through her phone, he tried to contact her to s chedule a meeting. When this did not work, he followed the plaintiff to her office to enquire whether she was the one who caiTied out the suspicious transactions on her account which she denied. He further advised the plaintiff to write to the defendant bank to remove her mobile phone number from the bank mandate on her account. In my view, the bank carried out its duty and was, therefore, under no obligation to further enquire on whether she had updated her mandate or corrected it as one might argue. As discussed in paragraph 17.161 of Paget's Law above, the plaintiff has a corresponding duty to exercise reasonable care and diligence to prevent unauthorised electronic fund transfers. In the present case, the plaintiff failed to secu re her sim card and to instruct the defendant to delink her phone number from her account. 8.26. In conclusion, after weighing the banks duty with the customers duty to exercise reasonable care and diligence to J40 prevent unauthorised electronic fund transfers, I find that the plaintiff did not exercise reasonable care and diligence to prevent unauthorised electronic fund transfers from her account using her phone number. 8.27. As a result, I find that the plaintiff has failed to prove her case on a balance of probabilities. I accordingly dismiss her claim for lack of merit. 8.28. I award costs to the defendant. These are to be taxed in default of agreement. Delivered at Lusaka this 13th day of February, 2025 . ... ,rfi? ............... ~. K. E. Mwenda-Zimba HIGH COURT JUDGE J41