Practice and procedure – Appeal
- Stay of execution – Principles
for grant pending appeal.
Practice and procedure –
Pleadings – Striking off –
Whether affidavit or documentary
evidence admissible on
application to strike off
pleadings – High Court (Civil
Procedure) Rules 1954 (LN 140A)
Or 25 r 4.
Courts – High Court -
Jurisdiction – Procedure for
invoking inherent jurisdiction
of court.
The plaintiff brought an action
against the defendants jointly
and severally in the High Court
for various heads of liquidated
and unliquidated damages. The
plaintiff alleged that the 2nd
defendant guaranteed the
performance of the contract
obligations of the 1st
defendant and also offered
his property as security. The
defendants traversed the
allegation and denied liability.
The plaintiff applied by motion
with supporting documentary
evidence for judgment under Or
25 r 4 of the High Court (Civil
Procedure) Rules. The trial
judge granted the application
and entered judgment against the
defendants. Dissatisfied, the
defendants appealed and applied
to the Court of Appeal for a
stay of execution of the
judgment. At the hearing of the
application the defendants
submitted that since the
plaintiff did not invoke the
inherent jurisdiction of the
court the trial judge erred in
relying upon the affidavit
evidence proffered in the motion
for judgment; accordingly the
appeal had a good chance of
success and the judgment ought
to be stayed pending the
determination of the appeal. The
plaintiff-respondent contended
that the trial judge was
entitled, suo motu, to
invoke his inherent jurisdiction
and that it was not mandatory to
specify in the application that
the inherent jurisdiction of the
court would be invoked nor was
it necessary to invite the court
to invoke its inherent
jurisdiction.
Held,
Lamptey JA dissenting in part:
(1) The application for judgment
was brought under Order 25 rule
4. At no stage of the
proceedings did the plaintiffs
intimate that they were
additionally or alternatively
invoking the inherent
jurisdiction of the court. The
judge however determined the
matter, not in accordance with
Order 25 rule 4, but under the
inherent jurisdiction of the
court, upon the affidavit and
annexures in support of the
application. A serious question
of law that would engage the
attention of the court at the
hearing of the substantive
appeal would be whether in an
application brought under Order
25 rule 4, a court could suo
motu invoke its inherent
jurisdiction and so have
recourse to such evidence. The
appeal was therefore not
frivolous.
Per
Lamptey JA:
Or 25 r 4 did not provide that a
judge must and can look at and
consider affidavit evidence. The
rule, in no uncertain terms,
dictated that only the pleading
might be referred to … It was
only when an applicant had
expressly invoked the inherent
jurisdiction of the court that
the judge would be clothed with
such jurisdiction. Where an
applicant intended to invoke the
inherent jurisdiction of the
court he must state so in the
notice of motion or, in moving
the application, expressly and
specifically indicate so to the
court. The judge wrongfully
invoked his inherent
jurisdiction suo motu. In
the result he erred …
(2) The approach of the court in
applications for stay of
execution, was to make such
orders as would protect the
interests of the applicant, so
that should the appeal succeed
he would retrieve that which he
had given away and the appeal
would not be rendered nugatory.
On the evidence the 1st
defendant-company was of
some substance. The 1st
defendant’s application
would therefore be refused upon
condition that the plaintiff
provided security before
proceeding into execution. The
issue for determination in
relation to the 2nd
defendant namely, whether he had
guaranteed the debt, was a
serious issue. Besides he
complained against the procedure
in the court below. If his
application was not granted and
his properties were sold in
satisfaction of the
judgment-debt, the appeal if
successful, would be rendered
nugatory. Joseph v Jebeile
[1963] 1 GLR 387 applied.
Cases referred to:
Attorney-General of the Duchy of
Lancaster v London and North
Western Rly Co
[1892] 3 Ch 274, 62 LJCh 271, 67
LT 810, CA.
Harlley v Ejura Farms (Ghana)
Ltd
[1977] 2 GLR 179, CA.
Joseph v Jebeile
[1963] 1 GLR 387, SC.
Tackie v Baroudi
[1977] 1 GLR 36, CA.
APPLICATION to the Court of
Appeal for stay of execution of
the judgment of the High Court
pending appeal.
Kwaku Baah,
with him, Charles Ofori,
for the applicants.
Sammy Addo
for the respondent.
LUTTERODT JA.
On 3 March 1992 the
plaintiff-company took out a
writ of summons against the two
defendants jointly and severally
for the following reliefs:
“(a) The sum of ¢54,500,000,
the equivalent of 136,250 US
dollars at the rate of ¢400 to
$1 as at 24 September 1991,
being the value of 5,000 cartons
of pilchards in tomato sauce
which the plaintiffs imported
for the defendants.
(b) The sum of ¢2,000,000
offered by the defendants in
lieu of insurance guarantee
bond.
(c) The sum of ¢20,000,000
raised by the plaintiffs at the
request of the defendants for
the customs duties and other
expenses involved in the
clearance, transportation and
warehousing of the goods plus
the agreed Servicing Charge of
5% per month from December 1991
to the date of final payment.
(d) The sum of ¢6,812,500
being the fall in the cedi value
to the dollar in respect of the
same $136,250 as at 29 February
1992.
(e) Interest at the current
bank rate on reliefs a, b, and d
from 18 February 1992 to the
date of final payment.
(f) Order to enforce … the
agreement.
(g) The sum of ¢10,000,000
general damages for loss of
business, finance, integrity and
breach of contract.”
It was not until 19 November
1992 that the defences to the
action were filed. They denied
liability to the claim.
The 2nd defendant deserves
particular mention. It was
alleged of him in paragraph 11
of the plaintiffs’ statement of
claim that:
“The 2nd defendant further gave
promises and guaranteed to
satisfy the contract obligation
of the 1st defendants through
the disposal of his assets in
addition to the 1st defendants’
security registered as AR
5875-75 should the need arise.”
His reaction, as is contained in
the statement of defence, reads:
10. Save that 2nd defendant
registered AR 5875-75 defendant
denies paragraph 11 of the
statement of claim.
By a motion for judgment brought
under Order 25 rule 4, the
plaintiffs succeeded in
obtaining judgment for part of
the reliefs they had sought. The
defendants being greatly
dissatisfied with the summary
manner in which the case was
disposed of promptly appealed to
this court on a number of
grounds. They followed this up
with the instant application by
which they pray this honourable
court to suspend the execution
of the judgment obtained.
I have no doubt in my mind,
after listening to the argument
on both sides that the appeal
raises important questions of
law.
The most important is this. The
application for judgment was
brought under Order 25 rule 4.
Fortunately the arguments for
both sides were exhibited in
this application and we can
therefore say with certainty
that at no stage of the
proceedings did the plaintiffs
say they were additionally or in
the alternative invoking the
inherent jurisdiction of the
court. At the hearing of the
motion, however, the judge took
it upon himself to determine the
matter not in accordance with
Order 25 rule 4 but acting under
the powers conferred on him by
the court’s inherent
jurisdiction. His decision was
therefore based purely or solely
on extrinsic evidence; the
affidavit in support of the
application together with its
annexures.
He concluded thus:
“The affidavit in this instance,
taken together with the
documents attached to it
convinces me that the defendants
after the issue of the writ and
after appearance had been
entered on their behalf admitted
liability in respect of the
plaintiffs’ claim and made
payments which took care of a
substantial portion of the
plaintiffs’ claim. I therefore
see the defence which was filed
on 19 November 1992 in response
to the plaintiffs’ statement of
claim as a desperate effort
calculated to delay justice in
the case and therefore not in
good faith.”
It seems to me therefore that
one of the most serious
questions which would engage the
appellate court’s attention at
the hearing of the substantive
appeal would be whether in an
application brought under Order
25 rule 4, a court could suo
motu invoke its inherent
jurisdiction and so have
recourse to extrinsic evidence
and award judgment on the basis
of such evidence. I am therefore
satisfied that the appeal is not
frivolous. Beyond this, I would
not make any definite
pronouncements on the
correctness or otherwise of the
learned trial judge’s decision.
This court’s approach in
applications of this kind, i.e.
stay of execution, is to make
such orders as would protect the
interests of the applicant,
particularly the interest which
by the judgment he is being
called upon to surrender so that
should he eventually find
himself successful on appeal he
does not find himself unable to
retrieve that which he has given
away and so end up with a
valueless appeal; simply but
elegantly put, he does not find
the appeal nugatory.
In the instant case, nothing was
said of the 1st respondents’
financial position. It is not
alleged that they would, in the
event of losing the appeal, be
in no position to refund any
moneys paid them. On the
contrary, it does appear from
the evidence tendered at this
hearing that the company is of
some substance. Under these
circumstances, I found the
principle laid in the case of
Joseph v Jebeile [1963] 1
GLR 387 most useful. It was held
in that case:
“2. It is the paramount duty of
a court to which an application
for stay of execution pending
appeal is made to see that the
appeal, if successful, is not
nugatory…
3. Generally, where an
application for stay of
execution pending appeal is
considered in a case involving,
inter alia, payment of
money, the main consideration
should be not so much that the
victorious party is being
deprived of the fruits of his
victory as what the position of
a defeated party would be who
had had to pay up or surrender
some legal right only to find
himself successful on appeal.
Generally where large sums of
money are involved the policy of
the law would not be against
staying execution; but when
execution is stayed and
circumstances permit, it should
be on the condition that the
judgment-debtor pays into court
the amount of money involved,
or, when refused, on the
condition that the
judgment-creditor give security
which is approved by the judge.”
In the instant case, therefore,
I think I would refuse the
application only upon the
condition that the applicant
provides security.
I however find the case of the
2nd defendant disturbing. The
complaint he intends to lay
before the appellate court is
that, even going by the method
the trial judge adopted, it is
plain the matters in controversy
between him and the
plaintiff-respondent could not
possibly have been resolved.
The question is, what was this
matter? The plaintiffs have, by
the paragraph 11 of their
statement of claim, alleged that
the 2nd defendant guaranteed the
performance of the contract
obligations of the 1st
defendant’s and offered his
property registered as AR
5875/75 as security. 2nd
defendant’s reaction in his
statement of defence to this
allegation is that:
“10. Save that 2nd defendant has
security registered as AR
5875/75 defendant denies
paragraph 11 of the statement of
claim.”
The issue which arose for
determination was whether the
2nd defendant
judgment-debtor-applicant
guaranteed the debt or undertook
to dispose of his personal
properties in satisfaction of
any debt which might arise from
the transaction between the two
companies. It is quite a serious
issue and the appellate court
would be called upon to
determine whether any of the
facts deposed to in the
affidavit and or the annexures
established
plaintiffs-appellants’ case as
against the 2nd
defendant-respondent.
But, in his case, I have not the
slightest doubt in staying
unconditionally the judgment
obtained against him. For if
these were not done and these
properties are sold in
satisfaction of the judgment
debt (as he himself is alleged
to have promised to do and I
have every reason to believe the
judgment-creditor will levy
execution against these
properties), there is no doubt
that this appeal if successful,
in view of the 3rd party rights
which may have accrued, would be
rendered nugatory.
ADJABENG JA.
An application of this nature
calls for an exercise of
discretion. It is necessary for
the applicant, therefore, to
fully convince the court of the
strength of his case before the
court can dare deprive the
judgment-creditor of the fruits
of his judgment.
In the present case, I have
looked at all the material that
was placed before the trial
court at the time it was called
upon to give a decision on the
matter. I have read the
arguments that were advanced,
and the ruling given on the
matter. I have also considered
carefully the application before
us and the arguments of both
counsel, including the
authorities cited. From all
these, I have not been able to
find any good reason for
depriving the respondents of the
fruits of their judgment as
against the 1st
defendants-applicants.
In other words, I have not been
persuaded to exercise my
discretion in favour of the 1st
defendants-applicants by staying
execution of the judgment given
against them in view of the
facts before the court, and my
understanding of the law on the
matter. Accordingly, I shall
dismiss the application of the
1st defendants. I would,
however, agree that the
plaintiffs-respondents should
give security for the
judgment-debt before it goes
into execution against the 1st
defendants.
In respect of the 2nd defendant,
I think that considering his
defence as disclosed in
paragraph 10 of the statement of
defence, his application ought
to be granted.
LAMPTEY JA.
This is an application by
Evanspenny Industries Company
Limited seeking an order of this
court to stay the force and
effect of the ruling of the High
Court, Accra, dated 16 December
1992. By that ruling the court
entered judgment (a) for the sum
of US$15,176.76 together with
interest at the prevailing bank
rate from 18 February 1992 till
final payment (b)
¢31,720,112.55, made up of
¢20,139,754 and 5% service
charge per month for 11.5 months
from 16 December 1991 to 30
November 1992, (c) ¢4,346,285.59
representing the exchange rate
difference in respect of the
transfer of $126,173.24 against
the applicant-company in favour
of the respondent-company.
Aggrieved by the ruling the
applicant-company appealed to
this court. The application by
the company to the High Court
for an order to stay the
execution of the judgment was
refused by that court. The
applicant-company repeated its
application in this court.
Arguing the application before
us, learned counsel for the
applicants stated that the
judgment entered against the
applicant was irregularly
obtained. He contended that the
application was brought pursuant
to Order 25. In moving the
motion before the High Court
learned counsel for the
respondent herein stated in
clear terms that the application
was brought pursuant to Order 25
rule 4. The respondent did not
invoke the inherent jurisdiction
of the High Court.
Before us, learned counsel for
the applicants argued that an
application brought under Order
25 rule 4 must not and cannot be
supported by affidavit and other
documentary evidence. It was
contended that in considering an
application brought under Order
25 rule 4 a court or a judge
must only look at and consider
the pleadings. It was further
contended that a court or a
judge must not refer to or rely
on affidavit and other evidence
that had been filed together
with the application brought
pursuant to Order 25 rule 4. In
the instant case, the trial
judge looked at and considered
the affidavit and other evidence
filed together with the
application. He submitted that
the trial judge erred in law in
referring to and relying on the
clearly inadmissible affidavit
and other evidence. It was
argued further that the trial
judge was not permitted, suo
motu, to invoke the inherent
jurisdiction of the court in
dealing with an application
expressed to be brought pursuant
to Order 25. Learned counsel
submitted that the appeal
against the said ruling has a
good chance of success. He
invited the court to make an
order staying execution of the
final judgment in favour of the
applicant.
For the respondent, it was
submitted by learned counsel
that the trial judge was right
in law, suo motu, to
invoke his inherent jurisdiction
in considering the application
before him. It was contended
that it was not mandatory for an
applicant to state in the notice
of motion that the inherent
jurisdiction of the court would
be invoked at the hearing. In
the view of counsel it was not
even necessary for counsel to
invite the trial judge to invoke
the inherent jurisdiction of the
court. In his opinion, the trial
judge was enjoined to invoke the
inherent jurisdiction of the
court if there were grounds to
enable him to do so. He
contended that in the instant
case the affidavit and other
evidence showed that the
statement of defence filed was
frivolous, vexatious and an
abuse of the judicial process.
The trial judge felt satisfied
that the applicant had no
reasonable defence to the action
of the respondent. Counsel
contended that the judgment was
regularly obtained; that the
ruling was right in law and that
the appeal was without merit. He
invited the court to refuse the
application.
In the light of the submissions
and arguments made by counsel
for the parties the following
issues fall to be determined by
the court:
(1) Does Order 25 permit
affidavit and other evidence to
be used to support an
application, quite apart from
the pleadings?
(2) Must an applicant desirous
of invoking the inherent
jurisdiction of the court give
express notice of this?
(3) Is a judge, suo motu,
permitted to invoke the inherent
jurisdiction of the court?
(4) Has the appeal filed
against the ruling of the lower
court a chance of success?
I will proceed to consider the
above issues in the order in
which they are set down. It is
desirable to reproduce Order 25
rule 4 as follows:
“The Court or a Judge may order
any pleading to be struck out on
the ground that it discloses no
reasonable cause of action or
answer, and in any such case, or
in case of the action or defence
being shown by the pleadings to
be frivolous or vexatious, the
Court or a Judge may order the
action to be stayed or
dismissed, or judgment to be
entered accordingly, as may be
just.”
The first leg of Order 25 rule 4
permits a court or a judge to
strike out any pleading. The
second leg authorises a court or
a judge to strike out an action
or a defence. In both cases the
right to strike out any pleading
or an action or a defence must
only be exercised if the
pleading, action or defence
appears to the court or a judge
to be frivolous, or vexatious or
discloses no reasonable cause of
action or discloses no
reasonable defence. The rule
envisages the use of and
reliance upon any pleadings, or
any statement of claim or any
statement of defence; in other
words, under rule 4, a court or
a judge must and can only look
at the pleading, or statement of
claim or the statement of
defence to determine whether
that pleading, that statement of
claim or that statement of
defence is frivolous or
vexatious or discloses no
reasonable cause of action or
discloses no reasonable defence.
The rule does not state that a
court or a judge must and can
look at and consider evidence
such, for instance, as affidavit
evidence.
Indeed, it is trite learning
that in drafting a statement of
claim or a statement of defence,
evidence must not be pleaded.
The wisdom discernible from the
prohibition under Order 25 rule
4 that affidavit and or other
evidence must not and cannot be
used is thus made plain and
explained. Rule 4, in no
uncertain terms, dictates that
only the pleading or pleadings
must be referred to and relied
upon in moving an application
brought pursuant to Order 25.
In the instant case, the
application as per the notice of
motion clearly informed the
court and the applicant herein
that the application was brought
pursuant to Order 25. Indeed the
application bore the following
heading: “Motion for Judgment -
ORDER 25”.
The applicant was enjoined to
refer to and rely on the
pleadings only to demonstrate
that he was entitled to
judgment. Before the lower
court, counsel for the
respondent referred to and
relied on the affidavit and
other documentary evidence; so
did the trial judge. I have
sought to show that this
approach was not authorised by
and permissible under Order 25
rule 4.
Before us, counsel for
respondent submitted that the
inherent jurisdiction of the
court was invoked by the trial
judge to enable him look at and
consider the affidavit and other
documentary evidence. On the
contrary, counsel for applicant
submitted that the trial judge
erred when he, suo motu,
invoked the inherent
jurisdiction of the court in
determining the application. I
have found Order 18 rule 19 (2)
of the English rules in the 1970
edition of the Annual
Practice helpful in
considering the above issue.
That sub-rule provides as
follows:
“The application may be made on
any or all of the grounds
mentioned in this Rule, but such
grounds must be specified.
Moreover, the application may
be, and frequently is, made both
under this Rule and under the
inherent jurisdiction of the
Court at the same time and
although it is not strictly
necessary to put the words
“under the inherent jurisdiction
of the Court” in the
application, a properly drawn
application would expressly
invoke the powers of the Court
under this rule and under its
inherent jurisdiction.”
It seems to me that where an
applicant wished to invoke the
inherent jurisdiction of the
court, he must state that fact
on the notice of motion. In
default of stating this fact on
the notice of motion, it is my
opinion that in moving the
motion he must expressly and
specifically indicate to the
court that he invoked the
inherent jurisdiction of the
court. It seems to me that it is
only when an applicant has
expressly invoked the inherent
jurisdiction of the court that
the court or a judge would be
properly clothed with that
jurisdiction. In my opinion the
trial judge erred when he,
suo motu, assumed that
jurisdiction.
I have found the following
passage on the notes on Order 18
rule 19(2) most helpful:
“Where the only ground on which
the application is made is that
the pleading discloses no
reasonable cause of action or
defence, no evidence is admitted
… But in applications on any
other ground mentioned in the
Rule or where the inherent
jurisdiction of the Court is
invoked, affidavit evidence may
be and ordinarily is used.”
It seems to me that a judge or a
court would be permitted to
refer to and consider affidavit
and other evidence in the
clearest of cases where its
inherent jurisdiction is
expressly invoked by the
applicant. I have found support
for the statement above from the
passage following reproduced
from page 217 in the case of
Harlley v Ejura Farms (Ghana)
Ltd [1977] 2 GLR 179 at 217:
“In the application under Order
25, r 4 which the first
defendants put before the court,
it was considered necessary to
file affidavits and documents in
order to show that the
plaintiff’s pleadings disclose
no cause of action. Chitty J in
Republic of Peru v Peruvian
Guano Co (1887) 36 Ch. D.
489 deprecated this practice
when he said at page 498:
‘Under rule 4 no affidavit is
admissible. That is plain from
the terms of the rule itself. In
regard to the second branch of
the rule relating to stay of
frivolous and vexatious actions…
affidavits are admissible, not
by virtue of the rule, but of
the general jurisdiction of the
Court’.”
And in Attorney-General of
the Duchy of Lancaster v
London and North Western Ry
[1892] 3 Ch 274 at page 278 A L
Smith LJ expressed in
unambiguous language the true
ambit of Order 25 r 4 when he
said:
“I only want to make one remark
about Order XXV, rule 4. It
seems to me that when there is
an application to strike out a
pleading, and you have to go to
extrinsic evidence to show that
the pleading is bad, that rule
does not apply. It is only when
on the face of it is shewn that
the pleading discloses no cause
of action or defence, or that it
is frivolous or vexatious, that
the rule applies. In this case
it is manifest that you must go
to extrinsic evidence to show
that the pleading is bad and
directly it comes to that, the
rule does not apply.”
His Lordship next quoted the
following passage from the
judgment of Azu-Crabbe CJ in
Tackie v Baroudi [1977] 1
GLR 36 at page 43:
“I am satisfied that affidavit
evidence is inadmissible on an
application under Order 25, r. 4
to strike out a statement of
claim on the ground that it
discloses no reasonable action.”
The cases to which I have made
reference showed that an
application brought pursuant to
Order 25 r 4 can and must only
be considered and determined on
the pleadings before the court.
The cases further showed that a
court is not permitted to refer
to and rely on affidavit and or
other documentary evidence. In
the instant case, the
application was brought under
Order 25. For avoidance of doubt
I reproduce the notice filed by
the respondent:
“Motion on Notice - ORDER 25
Take notice that Sammy Addo Esq
of counsel for and on behalf of
the plaintiff-applicant herein
will move this Honourable Court
for judgment in terms of the
accompanying affidavit and for
such order or orders as this
court may deem fit.”
The respondent gave due notice
to the applicants herein and the
court below that the application
was brought pursuant to Order 25
without more. The notice of
motion indicated further that
the applicant would refer to and
rely on an accompanying
affidavit.
Rule 4 and the case law to which
I have made reference clearly
showed that the respondent was
not permitted to annex and
attach “an accompanying
affidavit”. The accompanying
affidavit was therefore not
properly before the court. The
trial judge was enjoined to
reject “the accompanying
affidavit”. This he failed to
do. He referred to and relied on
the accompanying affidavit. With
respect the trial judge erred in
this matter.
The final issue to consider is
whether or not the accompanying
affidavit considered together
with the pleadings showed that
the pleadings of the applicants
are vexatious and or frivolous
or that the statement of defence
is not a reasonable answer to
the action of the respondent.
I refer in particular to
paragraphs 8, 9 and 10 of the
affidavit in support of the
application. In my opinion these
clearly and plainly raised
triable issues. In such
circumstances, the plaint must
be heard on the merits. The
trial judge erred in determining
the case on inadmissible
evidence. The appeal against the
ruling dated 16 December 1992
has a bright chance of success.
It is for the above reasons that
I would grant the prayer of the
applicants.
Application granted in part.
S Kwami Tetteh, Legal
Practitioner.
|
