IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL
ACCRA - A.D 2016
EASTERN ALLOYS COMPANY LTD. - (Plaintiff/Appellant)
SILVER STAR AUTO LTD. - (Defendant/Respondent)
DATE: 14TH JULY, 2016
SUIT NO: H1/01/2016
JUDGES: KANYOKE J.A. (PRESIDING), ACQUAYE J.A. SOWAH J.A.
FELIX NANA OSEI FOR APPELLANTS
KWESI FREDUA-AGYEMANG DANSO FOR RESPONDENT
This is an appeal against the Ruling of the High Court Commercial Division dated 29th May 2015 striking out the plaintiff’s writ of summons and statement of claim on the ground that they constituted an abuse of process. The plaintiff/appellant who is dissatisfied with that decision has filed this appeal. The Notice of Appeal dated 17th June 2015 has the following two grounds of appeal:
The decision of the Court is not supported by the affidavit evidence on record.
The trial judge erred in striking out the Plaintiff’s suit.
For clarity and ease of reference, the plaintiff/appellant in this appeal who was the defendant in an earlier suit at the Commercial Court numbered RPC/268/07 will hereafter be referred to simply as the “appellant” whilst the defendant/respondent herein who was the plaintiff in the earlier suit will be called the “respondent”.
The brief background facts are as follows:
On 10th September 2007, the respondent filed a writ of summons against the appellant herein. That Suit Number RPC/268/07 was titled Silver Star Auto Ltd vs. Eastern Alloys Co. Ltd. The respondents claim was for an outstanding balance of money owed by the appellant in respect of workshop services rendered by the respondent on Benz trucks purchased by the appellant from the respondent. The appellant filed a statement of defence and counter-claim in that Suit. At the close of pleadings, the dispute was settled at the pre-trial settlement stage and a consent judgment duly entered on 30th January 2008.
On or about 17th April 2014, the appellant issued the writ of summons which is the subject-matter of this appeal. This was after its application to stay execution and set aside the consent judgment had been dismissed on 4th April 2014. The claims on the writ of summons relate to 25 units of Mercedes Benz Actros trucks and were for general damages for breach of implied warranty of fitness, replacement value of affected trucks and costs.
The respondent filed a statement of defence to the action contending that the action was barred under the Limitations Act, and further contending that the appellant was estopped from bringing the action by reason of the earlier consent judgment. The respondent then brought an application under Order 11 rule 18 (1)(b)(d) of the High Court (Civil Procedure) Rules 2004, C.I. 47 for the writ and statement of claim to be struck out on the grounds that the matters raised in the appellants statement of claim were raised as a defence in the earlier suit with number RPC/268/07, and that the present action was an attempt to circumvent the consent judgment which the appellant had tried unsuccessfully to set aside, and was an abuse of process.
The appellant resisted the application, arguing that the cause of action, which was in respect of defects to the gear boxes of the trucks, arose after the earlier settlement.
In his Ruling, the learned trial judge compared the appellant’s claims in the suit before him with the appellants’ defence and counter-claims in the earlier case and concluded that the subject-matter, the facts and the allegations of the instant suit and the earlier suit bore no significant or material differences. The trial court was of the view that the appellant knew of the defects it is now complaining of at the time it filed its earlier statement of defence and counter-claim. In effect, the court held that it was not true, as alleged by the appellant that the defects had surfaced after the settlement reached in Suit number RPC/268/07. In the opinion of the trial judge, and relying on Naos Holding Inc vs. GCB  1 SCGLR 492, he held that the writ of summons and statement of claim constituted an abuse of process and to allow them to stand would amount to encouraging piece-meal litigation.
The Arguments of the Parties
Counsel for the appellant argues both grounds of appeal together in his written submissions. His first submission is that the trial judge had taken a simplistic approach to the issue and rushed to the conclusion that the endorsement on the appellants’ writ of summons and the earlier counterclaim only appeared different on the surface but there was no significant difference. Counsel attributes this error by the trial judge to his misinterpretation of paragraph 18 of the appellants’ statement of claim. Counsel argues that a proper reading of the said paragraph would show that the faulty gear boxes which are the substance of its present suit could not have been part of the terms of settlement filed on 30th January 2008 as shown by paragraphs 18 and 19 of the respondents’ statement of defence in this suit. Counsel contends that the cause of action relating to the faulty gear boxes had not arisen as at 10th September 2007 when it filed its statement of defence in the earlier suit, and so the trial judge was wrong in his view that the appellant was engaged in piece-meal litigation.
Counsel further submits that Naos Holding Inc vs. GCB [supra] and the rule in Henderson vs. Henderson which are cited by the respondent are inapplicable. He relies on the House of Lords decision in Lawrance v. Lord Norreys (1890) 15 App. Cas. 210, H.L, Ghana Muslims Representative Council vs. Salifu  2 G.L.R. 246 at 261 C.A and Harlley v. Ejura Farms (Ghana) Ltd.  2 GLR 179 where Azu Crabbe C.J. stated at page 194 thus:
“The court will not permit a plaintiff to be driven from the judgment seat without considering his right to be heard, excepting in cases where the cause of action is obviously and incontestably bad...”
In response to these submissions, the respondents counsel contends and says it demonstrated by reference to letters exhibited to the Motion to strike out, that indeed the issues raised by the appellant in its statement of claim were known in 2005/2006 and were raised in the earlier suit, or if not, the appellant had opportunity to raise them as a defence and counterclaim in the earlier suit. He points out that though the date on which the trailers were mounted was key to the appellants’ case, the date was carefully left out in its averments. Respondents counsel also submits that the defence of the respondent to the action had included the contention that the appellants claim which was founded on an alleged breach of a simple contract was barred under the Limitations Act, 1972, NRCD 54 having been brought outside of 6 years from the accrual of the cause of action.
Order 11 Rule 18 of the High Court (Civil Procedure) Rules 2004 (C.I.47) provides as follows:
Striking out pleadings
18. (1) The Court may at any stage of the proceedings order any pleading or anything in any pleading to be struck out on the grounds that
(a) it discloses no reasonable cause of action or defence; or
(b) it is scandalous, frivolous or vexatious; or
(c) it may prejudice, embarrass, or delay the fair trial of the action; or
(d) it is otherwise an abuse of the process of the ,
and may order the action to be stayed or dismissed or judgment to be entered accordingly.
By sub-rules 18(1) (b) (d) under which the respondent moved the trial court, extrinsic evidence is permitted to demonstrate why the action is objectionable. The court therefore looks at the evidence on the record including pleadings, affidavits and exhibits filed in support and in opposition to the application to arrive at its decision.
In this present case on appeal, the main issue of contention is a question of fact whether or not as at the time of the earlier judgment the present cause of action which is the alleged defects in the gear boxes of the trucks had accrued. If it had but the appellant failed to raise that issue in its counterclaim but waited until 2014 to institute action, then the contention that it constitutes piece-meal litigation and abuse of process may be maintainable.
The law frowns on piece-meal litigation where there is never an end to litigation because the losing party at his whim raises litigation piece-meal over the wider area of the dispute. Thus in Henderson v Henderson (1843) 3 Hare 100 – 121 which is the locus classicus on the issue of estoppel per rem judicatem, Wingham VC at 114-115 said:
“I believe I state the rule of Court correctly, when I say that, where a given matter becomes the subject of litigation in, and of adjudication by a court of competent jurisdiction the court requires the parties to that litigation to bring forward that whole case and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest but which was not brought forward only because they have, from negligence, inadvertence or even accident omitted part of their case.
The plea of estoppel applies in exceptional cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce judgment, but to every point which properly belonged to the subject matter of the litigation and which the parties exercising reasonable diligence might have brought forward at the time.”
The above principle was applied with approval by this Court in Foli & Ors vrs. Agya-Atta & Ors. (Consolidated) (1976) GLR 194. Amissah, J.A. in delivering the judgment of the Court of Appeal stated at 197:—
“It is a well-known rule of law that a person cannot bring an action where the cause of his claim or the issue which he seeks to have determined has as between the parties or their privies already been disposed of by a competent Court. This is a statutory rule intended to prevent the harassment of people by a multiplicity of Law suits: Accordingly the rule is framed widely enough to cover not only matters which are actually dealt with in previous judgment but those as well which ought to have been brought up then but which were not”. (The emphasis is mine)
In Republic vs. High Court, Accra (Commercial Division) Ex Parte Hesse (Investcom Consortium Holdings SA & Scancom Ltd Interested Parties) [2007-2008] 2 SCGLR 1230 at 1246, a case where the issue concerned the principles of estoppel and res judicata, the Supreme Court quoted with approval the observation made in Greenhalgh vs. Mallard (1947) 2 ALL ER 255, that:
“Res judicata is not confined to the issues which the court is actually asked to decide, but it covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in”
These cases highlight the principle that the plea of res judicata covers not only issues actually decided by the Court but also matters that the parties could have raised in the action.
It is trite that an appellant who files an appeal on the ground that the judgment of the trial court is against the weight of evidence has to demonstrate that the judgment is indeed unsupportable having regard to the evidence on record. An appeal being by way of re-hearing, an appellate court is obligated to evaluate the entire record of appeal to satisfy itself that on a preponderance of probabilities, the conclusions of the trial judge is reasonably supported by the evidence. [Djin vs. Musah Baako [2007-2008] 1 SCGLR 687, Ampomah vs. Volta River Authority [1989-90] 2 GLR 28 and Tuakwa vs. Bosom [2001-2002] SCGLR 61]
In the light of these principles, we now proceed to consider whether the trial court was right in striking out the appellant’s writ of summons and statement of claim as constituting an abuse of process.
The fundamental issue that underlies this appeal is whether or not the appellants’ cause of action which centres on purported damages to gear boxes of trucks purchased from the respondent had accrued as at the time of the earlier suit in 2007/2008.
To resolve this fundamental issue, it is important to observe the following undisputed facts from the pleadings and affidavits:
Both causes of action flow from one and the same transaction, namely the purchase of Mercedes Benz trucks from the respondent. The appellants counsel admits this in his submissions.
The trucks were delivered to the appellant in November 2005
The respondent filed its suit on 10th September 2007 for outstanding payments for workshop services rendered on the trucks.
The statement of defence and counterclaim of the appellant in that suit was dated 25th October 2007. Among others, it said it had suffered loss and damage by reason of the failure of the plaintiff [that is, the respondent herein] to furnish and fit required features on the 25 units of trucks. The appellant positively averred that the required features had been fitted between January and March 2006, and that between January and March 2006 the trucks could not be put to work. This was one of the basis for appellants counterclaim for special damages.
That suit was settled and consent judgment entered on 30th January 2008
In the second suit, at paragraph 12 of the statement of claim, the appellant averred that the respondent was informed of defects to the trucks by a letter dated 29th October 2007.
At paragraph 18 of the statement of claim the appellant pleaded as follows:
“18.The plaintiff says much to its disappointment after running the trucks for less than six (6) months after the trailers have been mounted, it was realised that there was a breakage in the gear box arm of the tractor heads”
The contention of the appellants counsel is that the trial judge committed a fundamental error, namely, that he misread/misinterpreted paragraph 18 when he concluded that the defects in the gearbox were detected six months after the trailers were mounted onto the truck heads and impliedly the defects were known to appellant when it filed its defence in the earlier suit. Counsel states that a proper reading of paragraph 18 meant that “less than six (6) months running of the trucks was after the trailer had been mounted. Simply put, though the trailers had been mounted, the defect in the gear box was detected less than six (6) months of use, from the period when the trucks were usable upon the mounting of the trailer”.
I should say that the above is exactly our understanding of paragraph 18. We also fail to see where the trial judge is supposed to have gone wrong in his understanding of paragraph 18. This is how he delivered himself in the Ruling at page 60 of the Record:
“If therefore, as stated in paragraph 18 of the statement of claim herein, the defect in the gear box were detected six (6) months after the trailers have been mounted onto the truck heads and given the entire averments in the statement of defence in Suit No. RPC 268/07 then it implies that the defects were known to the plaintiff/respondent herein at the time it filed its statement of defence.....”
Whether or not the trial judge misinterpreted paragraph 18, a fundamental question that begs an answer is – “When were the trailers mounted?” Assuming the assertions made at paragraphs 18 to be true, then an answer to this question is key to determining when the “less than six months of use” when the gear boxes broke down began to run.
Surprisingly, that question is never answered by the appellant. Not in the statement of claim or in the Reply to the statement of defence even though the Respondent had at paragraphs 15 and 16 of its statement of defence denied the assertions contained in paragraph 18 of the statement of claim. The respondent had averred that the complications complained of were the result of post contract alterations made by the appellant. The respondent averred that holes drilled by the appellant when it installed the tipping hydraulic systems led to the alleged defects. The respondent went on to plead that as a goodwill gesture it decided to absorb the cost of repairs for the transmission despite the breach of warranty.
In its denial of these averments in its Reply, the appellant stated at paragraph 8 that“all defects were brought to the attention of the Defendant which they inspected and complained were manufacturer’s defects and promised to rectify same by failed.”
On the record are letters from the respondent to the appellant on the issue of the gear boxes dated 6th
April 2006 and 10th April 2006, [See pages 48 and 49]. Another letter from the respondent dated 19th October 2009 [at page 46] which the appellant relies on as an admission of liability by the respondent clearly referred to the earlier letters of 6th and 10th April 2006 and reiterated the respondents’ diagnosis of the problems with the trucks. That letter can only have been a follow up to earlier discussions on the issue. The argument of appellants counsel that the letters of 6th and 10th February had nothing to do with the gear boxes is contradictory the appellants’ reliance on the letter of 19th October which cites the earlier letters.
The appellant says it kept waiting for the respondent to rectify the problem as promised until it wrote the letter dated 25th March 2014 [at page 50 of the Record] notifying the respondent of its intention to seek legal redress if the matter was not resolved. Appellants counsel seeks to rely on this letter as indicating the true date on which the issue of gear boxes came up. However, that letter is self-serving. It is obvious that it was written in an attempt to lay a foundation for the contemplated suit.
From the above, it is not difficult to conclude that all the defects were known to the appellant at the time it filed its pleadings in the earlier suit. If the defects were detected within six months of running the trucks after their trailers had been mounted then that issue properly belonged to the previous litigation in 2007 where the appellant had counter-claimed on the basis of defects to the trucks.
As already noted, the appellant is unable to point to any part of its pleadings that gave an answer to the critical question of when the trailers were mounted. The appellant carefully left out the date the trailers were mounted in its pleadings and in the affidavit in opposition to the motion to strike out. Even their submission in this appeal at paragraphs 3.2 and 5.10 merely beg the question and totally fails to address the issue directly. This is the dissembling argument made by the appellant at paragraph 5.10:
“It is abundantly clear from a proper reading of paragraph 18 that the plaintiff’s statement meant less than six (6) months after the running of the trucks. That less than six (6) months running of the trucks was after the trailer was mounted. Simply put, though the trailers have been mounted, the defect in the gear box was detected less than six (6) months of use, from a period when the trucks were usable upon the mounting of the trailers.”
We are of the view that the Court ought to treat as frivolous and vexatious any cause of action in support of which the plaintiff does not produce evidence of facts which are essential to ground his action or raise a reasonable probability of the action succeeding. In Nyame vs. Kese alias Kontoh [1999-2000] 1 GLR 236, [1998-99] SCGLR 476, the Supreme Court held that it was at the hearing of the preliminary trial on res judicata raised as a preliminary plea by the defendants, that the plaintiff was duty bound to produce all the evidence he had to support his stand that the judgments had been compromised, and not at the hearing of the substantive suit because the substantive suit could only commence after the plaintiff had defeated the defendants' plea by successfully establishing his contention.
Once the respondent pleaded res judicata the appellant was duty bound to produce all the evidence it had to support its contention that the cause of action was maintainable. It failed to do this.
We have evaluated the whole record as we are obliged to do and it is clear from the Record and by simple arithmetic that if the appellants assertion at paragraph 18 that after running the trucks for less than six (6) months after the trailers had been mounted, it was realised that there was a breakage in the gear box arm of the tractor heads”, is accepted as true, then the gear box defect was detected at the most by the end of September 2006 and about a year before the respondent instituted the action on 10th September 2007 that culminated in the consent judgment..
There was adequate evidence on the record from which the trial court could conclude that the cause of action had arisen as at the time of the settlement in January 2008. We agree with the reasoning of the trial judge and his conclusion that this amounts to piece-meal litigation, and it would be an abuse of the processes of the court to allow this fresh action.
Since the respondents had succeeded in establishing their plea of res judicata, the appellants appeal would be dismissed.