|
ARYEETEY, J.A.
By their writ of
summons the plaintiffs/respondents claimed against the
defendants/appellants the following reliefs:
1. An order for the
recovery of an amount of ¢98,998,402.26—which he
defendants paid by a cheque which was dishonoured upon
presentation at the bank.
2. An order for the
recovery of an amount of ¢134,000,000.00 which the
defendants paid by cheques which were dishonoured upon
presentation at the bank.
3. Interest on the
¢98,988,402.26 from 11th December 1997 to the date of
final payment
4. Interest on the
¢134,000,000.00 from 1st January 1998 to date of final
payment.
5. Any other reliefs
that this Honourable Court would deem fit.
According to the
Statement of Claim filed on 23rd November 1998:
"1. The plaintiffs are
a company registered under the laws of Ghana and engaged
in the manufacture of alcoholic and non-alcoholic
beverages.
2. The defendants are a
company registered under the laws of Ghana and acts as a
distributor of plaintiff’s products.
3. The plaintiffs have
on different occasions supplied their products to the
defendants.
4. The defendants
issued Social Security Bank cheque No. 78 dated 11th
December 1997 for the sum of ¢98,988,402.26 to defray
the cost of plaintiffs' products but was however
dishonoured upon presentation.
5. The defendants on
1st January 1998 issued three Social Security Bank
cheques numbered 88, 89 and 91 for the sums of
¢50,000,000.00, ¢60,000,000.00 and ¢20,000,000.00
totalling in all ¢134,000,000.00. The said cheques were
dishonoured and upon presentation by the plaintiffs to
the drawee bank.
6. Plaintiffs claim
against the defendants as per the writ of summons.”
After
defendants/appellants had entered appearance and before
they filed a Statement of Defence the
plaintiff's/respondents brought an application for
Summary Judgment under Order 14 rule 1. The content of
the accompanying affidavit was a virtual reproduction of
the Statement of Claim quoted above. However, before the
hearing date of the Summons for Judgment the appellants
filed their Statement of Defence and Counterclaim on
16th December 1998. I think a reproduction of only
paragraphs 3 and 4 of the defendants/appellants rather
long pleading would do for our purposes in this
judgment. They are as follows:
"3. The defendant
refers to paragraph 4 and 5 of the Statement of Claim
and says that the cheques were not dishonoured instead
they were countermanded by the defendant because the
plaintiff had not sat down with defendant to agree on
the actual amount owed by defendant yet the plaintiffs
persistently demanded that cheques should be issued out
to them on account to reduce the amount they in their
own contemplation, claimed the defendant owed them even
though the defendant insisted that until and unless the
two parties had entered into account he did not accept
their figure. Defendant therefore did not expect the
plaintiffs to present the cheques until they entered
into accounts whereas the plaintiff contended that they
wanted the balances of customers to be reduced at the
end of the year and these discrepancies made the
defendant stop the cheques.
4. Defendant
says that the Depot contract appointment between the
plaintiff and defendant which plaintiff unilaterally
abrogated without notice to the defendant has caused
great loss to the defendant and also resulting in a
total collapse of his business. Defendant says that
until and unless plaintiff enters into account with
defendant, which covers, inter alia, returned cheques
Nos. 1296400 of 4/11/98, 229528 of 21/7/98, 100 plastics
on invoice No, K010164 of 29/4/97, promotion stock
borrowed, expired ale returned, refund of handling
charges, empties not credited, fulls and empties sent to
Kumasi. Plalntiff cannot succeed in the present action,
which borders on accounts.”
The Summons for
Judgment came on for hearing on 18th January 1999. The
defendants/appellants and their counsel were absent. The
Court gave judgment in favour of the
plaintiffs/respondents as can be seen in the record of
proceedings on that day which is reproduced below as
follows:
"Mr. S. Okudzeto for
the plaintiff/applicant.
Counsel’s attention is
drawn to an arithmetical error in paragraph 5 of the
Statement of Claim, which he concedes to. Says then to
be enabled to rectify the error.
By Court: Let the
plaintiff be enabled to have the said error contained in
paragraph 5 be corrected by substituting ¢64 million for
¢60 million. (See Order 28 rule 12).
Counsel refers to the
application under Order 14 based on bills of exchange
ie. that the defendant issued cheques, which upon
presentation were dishonoured. Says that the defendants
in their defence which was filed after the application
herein have admitted issuing the cheques but have not
raised any of the known defence in such a situation as
such consideration. This being the case prays that the
judgment sought be granted.
By Court: I have
examined the instant application and referred to the
defence on the file filed after the application and
listened to counsel on behalf of plaintiff/applicant and
I am satisfied that the matters raised in the defence do
not afford the defendant any defence to the action
herein, which is based on dishonoured bills of exchange
issued by the defendant in favour of the plaintiff for
goods purchased.
In the circumstances I
think that this is an application, which is within the
contemplation of Order 14 of the Rules as amended by
L.I. 1129 and consequently the application being good I
proceed to enter summary judgement against the defendant
in the sum of ¢233,988,402.26 effective from 1/12/99
with interest at the rate of 37sic per annum until the
amount herein adjudged due to the plaintiff is finally
paid up. I also allow costs in favour of the plaintiff
in the sum of ¢20 million. In my opinion although there
is a counterclaim on the file by the defendant against
the plaintiff, it is not a bona fide claim and as such I
refuse to exercise my discretion in the defendants
favour by grant of stay of execution under rule 5(2) of
Order 14 by virtue of the pendency of the said
counterclaim.
After the Summary
Judgment the first step taken by the
defendants/appellants was to file a motion under Order
14 rule 11 to set aside the Summary Judgment dated 18th
January 1999. That application was heard on 15th April
1999. It was dismissed. The High Court in its ruling
made the following observation at pages 44 and 45 of the
record of appeal:
"Besides at the hearing
of the summary judgment which it is sought by this
application to set aside, there was on the file a
defence filed by the defendant on 16.12.96 which the
court took into account. It need be said that the rule
provides that 'the defendant may show cause against the
application by affidavit or otherwise to the
satisfaction of the court. (See Order 14 rule 3(1) as
amended by L.I. 1129). Clearly therefore a defence which
is on the file is a process which may entitle the
defendant applicant obtain leave or have the application
dismissed. It would thus appear that the
defendant/applicant cannot be heard saying that not
having filed affidavit in opposition to the application
having been served with the same, this alone should be a
ground for the judgment regularly obtained be set aside.
I think that after the applicant had refused to take
advantage of the opportunity offered him by service of
the application to be heard, he should not in this forum
try to re-open issues which when the matter came up
before the judge in open Court were not before him. I
think the applicant is wholly to blame for the situation
in which it now finds itself. In fact In arguing the
application counsel in my view should have limited
himself to the processes which he had then filed which
in this cause is limited to the defence dated 12.12.98.
It being so, in my view having considered the said
defence at the hearing of 18.1.99 in the delivery
resulting in the entry of summary judgment, I do not
think it is right for the applicant who failed to put
before this Court what he now alleges in order that the
Court may set aside a regularly obtained judgment. That
aside, examining the new materials, I am of the opinion
that they do not afford to the defendant a defence to an
action based on cheques, which were dishonoured. The
issue in my thinking are contained in the counterclaim
and appear to relate to an agreement outside the supply
of drinks to it by the plaintiff and if it so desires it
may proceed with the counterclaim. The result is that I
am unable to set aside the judgment dated 18.1.99 in the
instant action..."
In this appeal, which
is against both the judgment dated 18th January 1999 and
the ruling of the court dated 15th April 1999, the
Grounds of Appeal are as follows:
(i) The learned judge
failed to exercise his discretion judicially by refusing
to grant stay of execution of the summary judgment
pending the determination of the counterclaim under rule
5(2) of L.I. 1129.
(ii) The learned judge
erred in law in entering summary judgment in favour of
the respondents in view of the Statement of Defence and
the Counterclaim filed on 16/12/98, which disclosed
several triable issues including the need of the parties
to enter into accounts or reconcile their accounts and
set off against either party.
(iii) The learned judge
erred in law by holding that the defendant/appellant
cannot come under Order 14, rule 11 of L.I. 1129 to
apply to set aside the summary judgment.
I would like to deal
mainly with ground (ii) of the grounds of appeal which
is "The learned judge erred in law in entering summary
Judgment in favour of the respondents in view of the
Statement of Defence and the Counterclaim filed on
16/12/98, which disclosed several triable issues
Including the need of the parties to enter into accounts
or reconcile their accounts and set off against either
party”. I hope that would take good care of the other
two grounds of appeal, namely grounds (i) and (iii). I
entirely agree with the exposition of the law by the
learned judge on the operation of Order 14 and the
relevant rules in application for Summary Judgment. It
is obvious that in its ruling of 15th April 1999 the
Court gave the impression that it considered at least
the defence filed by the appellants two days before
hearing of the Summons for Summary Judgment came on. I
have taken sometime to examine the entire judgment of
the High Court quoted above again and again and I find
no reference in it to the content of the Statement of
Defence and Counterclaim filed sic the appellants, to
demonstrate the consideration the court gave to it. All
that was said of the pleading of the appellants in the
court’s ruling was 'I have examined the instant
application and referred to the defence on the file
filed after the application and listened to counsel on
behalf of plaintiff/applicant and I am satisfied that
the matters raised in the defence do not afford the
defendant any defence to the action herein, which is
based on dishonoured bills of exchange issued by the
defendant in favour of the plaintiff for goods
purchased" The Court’s judgment did not say anything
about the contention of the appellants in their pleading
that the cheques, which formed a substantial basis of
the respondents claim were not 'dishonoured cheques’ but
'countermanded cheques.' I am quite sure that if the
Court had adverted its attention to the issue raised in
the appellants' pleading about 'dishonoured' and
'countermanded' cheques, it would have come to the
conclusion that the matters raised afforded the
appellants defence to the respondents’ action. In fact
the only direct comment respecting the content of the
appellants’ pleading was in relation to the
Counterclaim. It reads: "In my opinion although there is
a counterclaim on the file by the defendant against the
plaintiff, it is not a bona fide claim and as such I
refuse to exercise my discretion in the defendant’s
favour by grant of stay of execution under rule 5(2) of
Order 14 by virtue of the pendency of the said
counterclaim.”
In effect contrary to
the allusion in the Court's ruling of 15th April 1999
that the appellant’s Statement of Defence was taken into
account when the Court gave its judgment the appellants'
pleading which in my view evidenced a competent defence
was completely ignored by the Court. It is worthy of
note that the issue of 'dishonoured cheques', which
formed the basis of the court's judgment, was the
subject of challenge in the appellants' pleading quoted
above. As a reminder I repeat paragraph 3 of the
appellants Statement of Defence and Counterclaim quoted
above namely: "3. The defendant refers to paragraphs 4
and 5 of the Statement of Claim and says that the
cheques were not dishonoured instead they were
countermanded by the defendant because the plaintiff had
not sat down with defendant to agree on the actual
amount owed by defendant yet the plaintiffs persistently
demanded that cheques should be issued out to them on
account to reduce the amount they in their own
contemplation, claimed the defendant owed them even
though the defendant insisted that until and unless the
two parties had entered into account he did not accept
their figure. Defendant therefore did not expect the
plaintiffs to present the cheques until they entered
into accounts whereas the plaintiff contended that they
wanted the balances of customers to be reduced at the
end of the year and these discrepancies made the
defendant stop the cheques”.
The substance of
paragraph 3 of the appellants’ pleading quoted above is
that the cheques that formed the basis of the
respondents claim against the appellants were not 'dishonoured’
but ‘countermanded'. There is a world of difference
between the two expressions. 'Dishonoured cheque'
connotes refusal by the bank to make payment in respect
of a cheque usually on account of lack of credit on the
part of the drawer or for some other reason. In the case
of 'Countermanded cheque' on the other hand, the mandate
given to the drawee bank is cancelled and in effect
payment by the bank upon presentation is stopped. When
the issue of the ‘dishonoured cheques’ and
‘countermanded cheques’ presented itself by the pleading
of the defendants filed after the Summons for Judgment
had been filed it is understandable that the respondents
who were applicants in that application for summary
judgment did not have the opportunity adduce further
affidavit evidence that the cheques were dishonoured and
not countermanded. However they had their chance when
they filed an affidavit in opposition to the appellants’
application to set aside the judgment of the Court dated
15th January 1999. The issue of 'dishonoured cheques'
and 'countermanded cheques' could have been resolved by
production of the cheques that were presented at the
bank.
For the reasons given
in this judgment the appeal is allowed and both the
judgment of 18th January 1999 and the Court’s ruling
dated 15th April 1999 are set aside. The case before the
High Court is to take its normal course.
(SGD.)
B.T. ARYEETEY
JUSTICE OF APPEAL
(SGD.)
A. ASARE-KORANG
JUSTICE OF APPEAL
E.K. PIESARE
JUSTICE OF APPEAL
COUNSEL
MR. RAY APPIAH AMPONSAH
FOR APPELLANT
MRS. MAANAA APPEAH FOR
NENE AMEGATCHER FOR THE
RESPONDENTS |
