African International Bank Limited V. Purification Techniques (Nigeria) Limited & Anor (2000)
LawGlobal-Hub Lead Judgment Report
GALADIMA, J.C.A.
This is an interlocutory appeal against the decision of Adeniji J. of the Lagos State High Court delivered on 30/4/93 refusing to dismiss the plaintiff’s action on the grounds that the latter action was not caught by the plea of issue estoppel as the issue of fraud had not been pleaded and tried in the previous action.
The facts giving rise to the appeal stem from an action filed by the first respondent in 1988 against the appellant in Suit No. LD/1125/88. The claims against the appellant were as follows:
“(a) An order directing an account to be taken of all banking transactions between the plaintiff and the defendant.
(b) Payment over by either party to the other of whatever sum may be found due after taking such account.
The appellant who was the defendant in the earlier case filed a statement of defence whereby it relied on the defence that there was an account stated and settled between the parties pursuant to a letter of 31/12/86.
Evidence was led by both sides on the issues raised and on the 26/7/86 Famakinwa J. delivered judgment whereby he upheld the plea of the appellant Bank that there was an account stated and settled between the parties which made it inexpedient to reopen the transaction between the parties. He consequently dismissed the respondents’ case. They immediately appealed against the judgment. That appeal is now pending before this Court of Appeal No. CA/L/90/93.
The respondents, had as well however, filed another action in 1991 against the appellant Bank in Suit No. LD/1603/91 in respect of Account No. 01005016 which is the same as adjudicated upon in Suit No. LD/1125/88. The respondents were claiming, inter alia:
“(i) An order setting aside any account stated and consequently the judgment in Suit No. LD/1125/88 based on the account stated between the plaintiff and 1st defendant with respect to the operation of Account No. 01005016 on the ground of fraud and/or misrepresentation.
(ii) A declaration that the plaintiff is only indebted to the defendant in the sum of N1,009,818.73 (One Million Nine Thousand, Eight Hundred and Eighteen Naira, Seventy Three Kobo) as at 25th May, 1988 when the external guarantee was called in to liquidate plaintiff’s indebtedness with respect to Account No. 01005016.”
The appellant filed a statement of defence in opposition to the claim and subsequently brought an application in the lower court seeking a dismissal of the action on the grounds that it was frivolous, vexatious and tantamount to an abuse of the process of the court as the issues being raised were one and the same with those which had been comprehensively and conclusively dealt with in the judgment of Famakinwa J. in Suit No. LD/1125/88.
In his Ruling, Adeniji J. as already observed, refused to dismiss the plaintiff’s action on the grounds stated above. It is that Ruling which is the subject-matter of this appeal by the appellant.
Four grounds of appeal without the particulars are as follows:
“(i) The learned trial Judge erred in law in holding that a plea of cause of action estoppel was not available to the defendant/appellant in this case as the issue of fraud had not been raised in the earlier Suit No. LD/1125/88.
(ii) The learned trial Judge erred in law in holding that the plaintiff could relitigate on the issue of fraud when the plaintiff’s averment in its further amended statement of claim was not that the judgment in the earlier Suit No. LD/1125/88 was obtained through fraud being practiced on the court.
(iii) The learned trial Judge misdirected himself on the facts in holding that the issue of fraud was not raised in the Suit No. LD/1125/88 when the claim in the earlier Suit was all-encompassing of the plaintiff’s claims against the defendant/appellant as regards Account No. 01005016.
(iv) The learned trial Judge misdirected himself on the facts in holding that the defence of cause of action estoppel and/or issue estoppel was not available to defendant/appellant when the issue of fraud was one which could have been raised in the earlier suit.”
The single and main issue raised for determination by the appellant is as follows:
“Whether the issues raised in Suit No. LD/1125/88 are one and the same as the issues raised in Suit No. LD/1603/91 such as to give rise to a valid and sustainable plea of resjudicata and/or issue estoppel.”
The respondents adopted the issue raised for determination by the appellant. Now in determining whether or not the claim, raised and determined in Suit Nos. LD/1125/88 and LD/1603/91 are co-terminus it will be quite necessary to refer to the nature of claims made by the parties in their pleadings.
In Suit No. LD/1125/88 the 1st respondent in this appeal as plaintiff in June, 1988 claimed against the appellant as defendant then known as “African International Bank Limited”, in respect of current Bank Account maintained by the 1st respondent with the appellant at its Branch at 42/44 Warehouse Road, Apapa. Paragraphs 3 and 4 of the amended statement of claim read thus:
“3. The plaintiff avers that the defendant has failed to exercise due and proper care in accounting to the plaintiff with regard to the said account and has failed to maintain proper accounts of its banking transactions with the plaintiff.
4. The plaintiff avers further that once its said account No. 01005016 ceased to be a mercantile account current for mutual transactions, any right the defendant may have had to charge compound interest upon the sums owed to it thereon by the plaintiff automatically ceased. Accordingly the plaintiff shall contend that all charges of compound interest upon its said account are unjustified.” (Italics by the plaintiff).
In paragraphs 13, 14 and 15 of its further amended statement of defence the relevant averments of the appellant were as follows:
“13. The defendant avers that there is a stated and settled account as recited in the plaintiff’s letter of 31st December, 1986 and as such the action is not maintainable and should be dismissed with substantial cost.
14 .The defendant avers further that by the terms of the external guarantee furnished to secure the plaintiff’s indebtedness to it, matters relating to the plaintiff’s indebtedness are triable only in Geneva, Switzerland.
15. The defendant denies the plaintiff’s account ever ceased to be a mercantile account current for mutual transactions and further avers that the defendant by the customs and practice of Banks is entitled to charge compound interest on the plaintiff’s indebtedness.”
The short and simple issue raised in Suit No. LD/1125/88 for the determination of the trial court was whether or not the 1st respondent was entitled to have an account ordered of the banking transactions between it and the appellant. The learned trial Judge Famakinwa J. resolved the issue in favour of the appellant on the ground that there was an account stated and settled between parties since December, 1986 and the court was not inclined to permit the parties to re-open the matter.
In Suit No. LD/ 1603/91 the 1st respondent claimed against the appellant and the 2nd respondent as defendants. I reproduce herewith paragraphs 11, 12 and 13 of the further amended statement of claim as follows:
“11. Prior to Suit No. LD/1125/88 being filed plaintiff through its solicitor complained to the 1st defendant about improper account with respect to the transaction between it and the 1st defendant.
12. After the judgment in Suit No.LD/1125/88 aforesaid the plaintiff consulted a firm of Financial Consultants Messrs Goldmine Finance Limited to look into the account with a view to ascertaining correctness of the said account.
13. The Financial Consultants aforesaid looked into the said account together with all the relevant documents sent to plaintiff by the 1st defendant and thereupon discovered that 1st defendant had been most fraudulent in the operation of plaintiff’s said account resulting in the huge financial indebtedness of plaintiff to 1st defendant.
Particulars of Fraud
(1) Fraudulently charging plaintiff commission on letters of credit over and above Bankers proved tariffs.
(2) Fraudulently debiting plaintiff’s excess amounts for payment of foreign bills.
(3) Fraudulently debiting plaintiff’s account with an amount said to be loan when the plaintiff was not granted any loan.
(4) Fraudulent excess interest.
(5) Fraudulently charging interest on the various amounts wrongly debited on plaintiff’s said account.”
From the above, it can be seen that in the action, from which this appeal is brought, the 1st respondent has alleged that the appellant operated its account in a fraudulent manner. That the fraud was discovered by the Financial Consultant after the judgment in Suit No. LD/1125/88, when the said consultants looked into the account of the appellant to ascertain its correctness.
It is the submission of the appellant’s counsel in the brief that the issues raised in Suit No. LD/1125/88 are one and the same as raised in Suit No. LD/1603/91 such as to give rise to a valid and sustainable plea of Res judicata and/or issue estoppel.
The respondents’ counsel on the other hand submitted that the issues raised by the two actions are totally separate and distinct. It is conceded that if an issue could have been raised in an action and it was not so raised, the party who ought to have raised such issue will be precluded from revising it in subsequent proceedings between the same parties. However, the learned counsel for the respondent has submitted that where it is contended that the previous proceedings have been tainted by fraud, there will be no estoppel per rem judicatam. He referred to Halsbury’s Laws of England, 4th Edition para. 1553 Volume 16.
It is well settled and well known that for the ambit of the doctrine of res judicata to operate, it must be shown that the parties, issues and subject-matter were the same in the previous case as those in the action in which the plea of res judicata is raised. Once the plea is made out the claim filed by the other party would be dismissed on the ground that the court lacks jurisdiction to allow parties to relitigate the same issue again.
The rule requires that where a final decision is given by a court of competent jurisdiction the parties cannot be heard to contradict that decision in any subsequent litigation between them respecting the same subject matter. See Ijale v. A-G. Leventis (1965) 1 All NLR 176 at 180; Okorodudu v. Okoromadu & Anor. (1972) 2 SC 21 at 31-32. See also recent decisions: In Daniel Mbionwu v. Agorji Obi (1997) 2 NWLR (Pt.487) 298 at 310; Alabi Aro v. Adisa Aro (2000) 3 NWLR (Pt.649) 443 at 457.
Having outlined the applicable principles above, the question now remains, whether the issue raised in the two cases were co-terminus or co-extensive in nature so as to have been caught by the plea of res judicata. The appellant raised this plea in paragraphs 17 and 18 of the statement of defence filed in relation to Suit No. LD/1603/91. I reproduce the paragraphs as follows:
“17. The defendant will contend at the hearing of this action in as much as the defendant admits paragraph 9 of the plaintiff’s statement of claim, the said judgment referred to in paragraph 10 of the plaintiff’s statement of claim fully determined the issues between the plaintiff and the defendant and this present action is an attempt to relitigate issues already decided by the Court of Law of Lagos State of Nigeria.
18. The defendant will contend at the trial of this action that the plaintiff is estopped from raising or having tried all the issues raised in its statement of claim as it has been the subject matter of a previous action the plaintiff and the defendant at the Lagos High Court in Suit No. LD/1125/88 and as such the principle of res judicata does apply.”
As earlier indicated, the learned trial Judge in his Ruling refused the appellant’s application on the grounds that the issue of fraud had not been raised and canvassed in the previous suit. I respectfully disagree with the learned trial Judge. He was wrong in his conclusion that the claim in Suit No. LD/1125/88’s touched the entire operation of the respondent account from 1980 – 1981. 1st respondent as plaintiff, in that suit had posited that proper accounts had not been rendered to it and that there were some discrepancies in the statement of account furnished to it. The present appellant, as the defendant then served a notice for further particulars on the plaintiff which thereafter consequently enumerated the areas of dissatisfaction. It would appear to me that the correctness of the accounts was then fully tried before Famakinwa J. He came to the conclusion that the accounts rendered to the 1st respondent were correct and that there was nonetheless an account stated and settled between the parties which the court ought not to reopen.
It would appear that the issue of fraud being raised in the present proceedings was at all material times subsumed in the issues raised in the action before Famakinwa J. In any event it is quite clear that issue of fraud which is being raised now could have and ought to have been raised in the previous suit. The basis for the complaint was in existence at the time Suit No. LD/ 1125/88 were filed. This fact is manifestly clear from the averments in paragraphs 11 to 13 of the further amended statement of claim. I have earlier reproduced above. All the issues raised in paragraphs 11 – 13 were in fact canvassed at the trial before Famakinwa J. and addressed in his judgment. I refer to pages 9-24 of the records of proceedings. In the course of judgment, the learned trial Judge clearly alluded to the terms of the plaintiff counsel’s answer to the notice for further particulars thus:
“…In particular our client demands details of all sums paid into its account from the account of Molaroid (Nigeria) Limited further to that company’s written instruction dated 1st July, 1982. Furthermore, our client demands details of commission, interest and other charges made by the Bank in respect of our client’s account during the stated periods and the basis upon which their charges were made.”
(Reference is made to page 16, lines; 37 – 46 of the Records)
The learned trial Judge in the course of his judgment further held at page 23 of the records thus:
“However, the mere fact that there is a correspondence between the plaintiffs counsel and the defendant is not per se sufficient reason in my mind, to re-open the matter, more importantly in the case the plaintiff has not been able to establish any error on the account.”
Given the terms of the claims as were placed before the learned trial Judge, Famakinwa J., and his subsequent judgment, it can be seen that his Lordship Adeniji J., was clearly in error when he refused to uphold the appellant’s contention that Suit No. LD/1603/91 was caught by the plea of res judicata and ought to be dismissed. This issue of fraud raised by the 1st respondent has been clearly an underlying consideration in Suit No. LD/1125/88 as the correctness of the entire account between the parties had been put in issue.
I have carefully examined the issues raised in Suit No. LD/1125/88 and those raised in Suit No. LD/1603/91. I hold that the issues are the same and this gives rise to a valid and substantial plea of res judicata raised by the appellant. In the final analysis this appeal succeeds and it is accordingly allowed. The Ruling of Adeniji J., delivered on 30/4/93 is hereby set aside. Accordingly I make an order dismissing the 1st respondent’s Suit No. LD/1603/91 on the ground that it was frivolous, vexatious and an abuse of the process of the court, I award N3,000 as costs against the respondents in favour of the appellant.
Other Citations: (2000)LCN/0793(CA)