The high court (commercial division) accra vrs Ampomah photo lab ltd (J5/23/2008) [2008] GHASC 19 (12 November 2008);

IN THE SUPERIOR COURT OF JUDICATURE

IN THE SUPREME COURT

ACCRA- AD 2008

 

CORAM:        ATUGUBA, J.S.C. (PRESIDING)

 DATE-BAH, J.S.C

ANSAH, J.S.C

ADINYIRA, J.S.C

BAFFOE-BONNIE J.S.C.

 

SUIT NO J5/23/2008

12th November 2008

 

THE REPUBLIC

 

VERSUS

 

THE HIGH COURT (COMMERCIAL DIVISION) ACCRA -      RESPONDENT

 

EX PARTE THE TRUST BANK LTD                             -           APPLICANT

 

AMPOMAH PHOTO LAB LTD & 3 ORS. (INTERESTED PARTIES)

___________________________________________________________

 

 

 

 

RULING

 

DR. DATE-BAH JSC:

 

The Facts

 

What is in issue in this suit is the jurisdiction of the High Court to hear a fresh action challenging an aspect of a consent judgment entered by a court of coordinate jurisdiction.  The applicant bank brought action in the Commercial Division of the High Court against the interested parties in this suit in respect of a loan transaction.  The parties to that suit agreed to settle their dispute and their agreement was embodied in a consent judgment of the Commercial Division of the High Court.  Subsequently, a dispute arose between the parties as to an aspect of that consent judgment.  The writ which had commenced the suit that had been settled was indorsed with claims for:  (a) the sum of 1,381,279,658.17 cedis, being loan and overdraft facility granted to the first defendant and guaranteed by the second, third and fourth defendants; (b) interest on the sum of 1,381,279,658.17 from 5th November 2004 until date of final payment.  Thus, the indorsement did not indicate the rate of interest claimed by the plaintiff.  The consent judgment, similarly, did not specify an interest rate, although it modified the duration of the period for the payment of  interest to end on the date of judgment, namely, the 20th day of June 2006. This non-specification of an interest rate was to be the source of misunderstanding between the parties to the consent judgment.

 

The applicant bank, in its capacity as plaintiff in the original suit described above, had applied for summary judgment and, after negotiations with the interested parties, the compromise it reached with them was entered as a consent judgment by the trial judge.  However, the judgment creditor bank, on filing the entry of judgment after trial, entered details regarding the interest rate which the interested parties have found unacceptable.   The entry of judgment after trial, in addition to claiming the principal sum, also entered judgment for

 

  1. “interest on the said sum at the current bank rate from 5th November 2005 to day of judgment 20th June 2006 (interest at 35% p.a.).
  2. Endorsed to levy interest at the contractual rate from 20th June, 2006 to date of final payment.”

 

It is this entry of judgment which is the genesis of the further litigation an aspect of which is now before this court.

 

The interested parties, being dissatisfied with the rate of interest embodied in the entry of judgment, initially brought a motion before the trial judge to set aside the consent judgment on account of the dispute as to the applicable rate of interest.  The trial judge refused to set the judgment aside because, in her view, a consent judgment once entered cannot be unilaterally varied by one party.  The learned trial judge relied on Guardian Assurance Co. v Bridi [1975] 2GLR 387 to reach this result.  The interested parties, taking a cue from the opinion of Sarkodie-Addo J. in that case, brought a fresh action against the applicant, on 21st December 2007, claiming:

 

  1. “That the portion of the Judgment of the Commercial Court in Suit No. BFS/36/2005 granting the Defendants herein interest at the rate of 35% per annum be set aside
  2. A declaration that the Debenture is manifestly disadvantageous to the Defendant
  3. An order that the interest rate in the said Debenture be reviewed to reflect the current interest rates on the money market in Ghana.”

 

It is the jurisdiction of the High Court to entertain this writ which is at the heart of the application before this Court.  The applicant initially made an application to the High Court (Commercial Division), seeking the dismissal of the action on the ground that it was an abuse of the judicial process, since the High Court had already ruled on the matter.  Her Ladyship Torkornoo J. dismissed this application, explaining that the High Court becomes functus officio only in relation to matters that it had already dealt with.  She was of the view that the entry of judgment filed was a manifest misrepresentation of the agreement reached by the parties and which had been recorded by her sister in her ruling of 20th June 2006.  Accordingly, she dismissed the application in a ruling dated 28th February 2008.

 

Dissatisfied with that outcome, the applicant bank has filed the present application seeking to invoke the supervisory jurisdiction of the Supreme Court over the court below for an order of certiorari to quash the ruling of the learned trial judge dated 28th February 2008 and prohibiting her from continuing with proceedings in this suit.  The ground on which this application has been brought is that the High Court has no jurisdiction to entertain the interested parties’ fresh action, since to allow the court below to exercise jurisdiction would mean the High Court would effectively be sitting in judgment over the final judgment and rulings of another High Court of co-ordinate jurisdiction.

 

 

The Law

 

The current law on when the prerogative writs will be available from the Supreme Court to supervise the superior courts in respect of their errors of law was restated and then fine-tuned in the Republic v High Court Accra, Ex Parte CHRAJ [2003-2004] SCGLR 1 and Republic v Court of Appeal, Ex Parte Tsatsu Tsikata [2005-2006] SCGLR 612, respectively.  In my view, the combined effect of these two authorities results in a statement of the law which is desirable and should be re-affirmed.  This Court should endeavour not to backslide into excessive supervisory intervention over the High Court in relation to its errors of law.  Appeals are better suited for resolving errors of law.  In the Ex Parte CHRAJ  case, this Court, speaking through me, sought to reset the clock on this aspect of the law as follows:

 

“The Ruling of this Court in this case, it is hoped, provides a response to the above invitation to restate the law on this matter.  The restatement of the law may be summarised as follows:  where the High Court (or for that matter the Court of Appeal) makes a non-jurisdictional error of law which is not patent on the face of the record (within the meaning already discussed), the avenue for redress open to an aggrieved party is an appeal, not judicial review.  In this regard, an error of law made by the High Court or the Court of Appeal is not to be regarded as taking the judge outside the court’s jurisdiction, unless the court has acted ultra vires the Constitution or an express statutory restriction validly imposed on it.  To the extent that this restatement of the law is inconsistent with any previous decision of this Supreme Court, this Court should be regarded as departing from its previous decision or decisions concerned, pursuant to Article 129(3) of the 1992 Constitution.  Any previous decisions of other courts inconsistent with this restatement are overruled.”

 

In the the Ex Parte Tsatsu Tsikata case,  Wood JSC, as she then was, said (at p. 619 of the Report):

 

“The clear thinking of this court is that, our supervisory jurisdiction under article 132 of the 1992 Constitution, should be exercised only in those manifestly plain and obvious cases, where there are patent errors of law on the face of the record, which errors either go to jurisdiction or are so plain as to make the impugned decision a complete nullity.  It stands to reason then, that the error(s) of law alleged must be fundamental, substantial, material, grave or so serious as to go to the root of the matter.  The error of law must be one on which the decision depends.  A minor, trifling, inconsequential or unimportant error, or for that matter an error which does not go to the core or root of the decision complained of; or stated differently, on which  the decision does not turn, would not attract the court’s supervisory jurisdiction.”

 

 

The combined effect of these two authorities, it seems to me, is that even where a High Court makes a non-jurisdictional error which is patent on the face of the record, it will not be a ground for the exercise of the supervisory jurisdiction of this court unless the error is fundamental.  Only fundamental non-jurisdictional error can found the exercise of this court’s supervisory jurisdiction.  The issue which arises, on the facts of this case then, is whether the trial High Court either committed a jurisdictional error or made a non-jurisdictional error which is so fundamental as to attract the supervisory jurisdiction of this court.

 

The applicant’s argument is that the High Court has no jurisdiction to entertain the action in respect of which it has invoked this Court’s jurisdiction.  Its argument is that a High Court cannot exercise jurisdiction over another High Court to set aside its consent judgment.  However, given that an appeal will not ordinarily lie against a consent judgment, the bringing of a fresh action to challenge the validity of a consent judgment is a standard and accepted procedure.  Indeed, in Emeris v Woodward (1889) 43 Ch.D. 185 North J held that it was only through fresh proceedings that a consent order could be set aside. In that action he dismissed an attempt to set aside an agreement for the compromise of an action by summons issued in the original action. He said (at p. 186 of the Report):

 

“I think that the Plaintiff’s proper course is to bring a new action to set aside the compromise, and that he cannot by means of a summons set aside the agreement and re-open the controversy.”

 

This principle was also affirmed in Ainsworth v Wilding [1896] 1 Ch. 673, where Romer J., as he then was, explained that (at pp. 676-7 of the Report) that:

 

“The Court has no jurisdiction, after the judgment at the trial has been passed and entered, to rehear the case.  That is clear.  Formerly the Court of Chancery had power to rehear cases which had been tried before it even after the decree had been entered; but that is not since the Judicature Acts.”

 

At first sight, then, the exercise by the High Court of its jurisdiction in such circumstances would not appear to be erroneous. The main issue is whether the Interested Parties’ action in the High Court falls within the parameters for an action challenging a consent judgment. Wilding v Sanderson [1897] 2 Ch. 534 is an illustrative case.  In that case, there was an action in the High Court to rectify or set aside a consent judgment, on the ground of mistake.  The Court of Appeal held that the consent judgment, as drawn up, was so worded as to go far beyond what was agreed and decided in the judgment given.  The court therefore upheld the decision of a trial High Court judge in an action subsequent to that in which the consent judgment had been given, in which the trial judge set aside the consent judgment.  Lindley LJ said (at p. 550 of the Report) that a consent order based on, and intended to carry out, an agreement concluded between the parties ought to be treated as an agreement which could be set aside on any ground on which an agreement in the terms of the order could be set aside.

 

Similarly, in Huddersfield Banking Company Ltd. v Henry Lister & Son Ltd. [1895] 2 Ch. D 273, a consent order was set aside by Vaughan Williams J. (as he then was) on the ground of common mistake, in a proceeding that was initiated by a fresh writ.  The learned trial judge had earlier refused to set the consent order aside in proceedings initiated by motion.  This is what he said (at p. 276 of the Report):

 

“When this matter was brought before me on motion, I thought that the authorities prevented me from putting the matter right on an application in that form, and I am still of the same opinion.  But, now that an action has been brought and the technical difficulty has been removed, it seems to me that the clear result of the authorities is that, notwithstanding the consent order has been drawn up and completed, and acted upon to the extent that the property has been sold and the money has been paid into the hands of the receiver, I may now set aside the order and arrangement upon any ground which would justify me in setting aside an agreement entered into between the parties.”

 

The trial judge’s order setting aside the consent order was confirmed on appeal.  In confirming the order Lindley LJ declared (at p. 280 of the Report):

 

“…the appellants contend that there is no jurisdiction to set aside the consent order upon such materials as we have to deal with; and they go so far as to say that a consent order can only be set aside on the ground of fraud.  I dissent from that proposition entirely.  A consent order, I agree, is an order; and so long as it stands it must be treated as such, and so long as it stands I think it is as good an estoppel as any other order.  I have not the slightest doubt on that; nor have I the slightest doubt that a consent order can be impeached, not only on the ground of fraud, but upon any grounds which invalidate the agreement it expresses in a more formal way than usual.”

 

These two cases were followed by Owusu-Addo J. in Guardian Assurance Co. Ltd. v Bridi [1975] 2 GLR 387 to set aside, on the ground of mistake, a portion of a consent judgment entered by the High Court, Kumasi.  Owusu-Addo J held that:

 

“I am fully satisfied that the clear result of the authorities and the law is such that notwithstanding the consent judgment having been given and completed, this court has ample jurisdiction to set it aside upon any ground which would entitle it to set aside an agreement entered into between the parties on the ground of mistake.”

 

This Court is, of course, not bound to follow this decision of the High Court, nor of the English courts.  However, they are sound in principle and there is no good reason for declining to follow their persuasive authority.  Vaughan William J expressed the principle in issue here well when he said in the Huddersfield Banking Company Ltd. case that ([1895] 2 Ch. 273 at p. 275):

 

“…it seems to me that the law would be in a very lamentable condition if an order and arrangement based upon such a mistake could not be put right by the Court,…”

 

The way of putting the mistake right cannot be an appeal since there are sound policy reasons why an appeal does not, and should not, lie against a consent judgment.  Where parties have themselves voluntarily reached an agreement resolving their dispute, the advantage of this course of action should be that they are saved from the vagaries of the extended appeal process.  Their agreement should be treated as final, in the absence of any vitiating factors.  The absence of an opportunity to appeal should not, however, mean that the judicial process should ignore a factor such as fraud or mistake that vitiates the agreement embodied in the consent judgment.  A fresh action to establish the fraud, mistake or other vitiating factor seems a reasonable procedure for achieving justice in the circumstances.

 

Application of the Law to the Facts

 

It is not for this court to determine whether the circumstances have been established which justify the setting aside of any aspect of the consent order of 16th June 2006.  That is an issue that a co-ordinate High Court will have to determine.  What is clear from the authorities discussed above is that the court below has not committed any jurisdictional error or fundamental non-jurisdictional error patent on the face of the record such as would merit the supervisory intervention of this Court.  The High Court was not in error in asserting jurisdiction to enable the interested parties to establish whether there was mistake or other vitiating factor affecting the consent order or any part of it such that it was justifiable to set aside a portion of the order.  Consequently, the ruling of the learned trial judge, Her Ladyship Torkornoo J, dismissing the applicant’s motion seeking the dismissal of the interested parties’ fresh action is not a nullity and certiorari does not lie to quash it.  Neither will prohibition lie to prevent the learned trial judge continuing to hear the interested parties’ fresh action.

 

 

 

S.K. DATE-BAH

(JUSTICE OF THE SUPREME COURT)

 

 

 

 

W. A. ATUGUBA

(JUSTICE OF THE SUPREME COURT)

 

 

 

J. ANSAH

(JUSTICE OF THE SUPREME COURT)

 

 

 

 

 

 

 

S. O. A  ADINYIRA (MRS)

(JUSTICE OF THE SUPREME COURT)

 

 

 

 

P. BAFFOE-BONNIE

(JUSTICE OF THE SUPREME COURT)

 

 

 

 

COUNSEL

REBECCA BOAKYE FOR THE APPLICANT

EBOW BROWN FOR THE INTERESTED PARTY