Application of the Plea of Res Judicata

CASE TITLE: ADALMA TANKERS BUNKERING SERVICES LTD & ANOR v. CBN & ORS (2022) LPELR-57036(SC)

JUDGMENT DATE: 18TH FEBRUARY, 2022

PRACTICE AREA: EVIDENCE

LEAD JUDGMENT: MARY UKAEGO PETER-ODILI, J.S.C.

SUMMARY OF JUDGMENT:

INTRODUCTION

This appeal borders on the plea of estoppel per rem judicatam.

FACTS

The appeal is against the decision of the Court of Appeal, Calabar Division, which upturned the decision of the Federal High Court, Calabar, per C.C. Nwogwugwu J.

The dispute arose from a loan agreement entered into between the 2nd Respondent (then a going concern) and 1st Appellant, who obtained from it a loan for the purchase of a ship named M.V. Adalma. Pursuant to that loan agreement, the 2nd Respondent, in the capacity of a banker opened a loan account No.1671 in favour of the 1st Appellant and solely funded the same. In furtherance of the cumulative loans granted, the parties entered into deeds of mortgage and covenant to ensure that the loan and the interest thereto were repaid by the 1st Appellant. It was specifically stipulated in the deeds of mortgage and covenant that the loans and interest would be repaid by the Appellant within six months from the date of the registration of the ship in Nigeria. Further to the foregoing, the duty of registering the ship was then specifically designated to the 1st Appellant without any reservation whatsoever.

Appellants neither registered the ship nor repaid any part of the loans granted to them and the interest assured thereon. In a bid to recover the loan/accrued interest which had increased to N1,640,837.42 and in the exercise of its power of seizure under the deeds of mortgage and covenant, the 2nd respondent seized the ships, Adalma 1, six years after its arrival in Nigeria and advertised it for sale.

Following the seizure of the ship, the 1st Appellant sued the 2nd Respondent together with its staff at the Federal High Court in suit no. FHC/CA/CS/3/83, further to which the 2nd Respondent counterclaimed for an order of foreclosure or in the alternative, an order for payment by the 1st Appellant of the sum of N 1,640, 837.42. In its judgment, the trial court found in favour of the 1st Appellant and non-suited the 2nd Respondent’s counter-claim. In entering judgment in favour of the 1st Appellant, the learned trial judge awarded the sums of N2,436,000.00 and N1,500,000.00 as special and general damages respectively in its favour.

Dissatisfied with the above decision, the 2nd Respondent appealed in Appeal No. CA/E/80/83. The Court of Appeal, Enugu Division, allowed the appeal, dismissing the 1st Appellant’s claims at the trial Court while granting the 2nd Respondent’s counter-claim for an order of foreclosure. The 1st Appellant, being dissatisfied with the judgment exercised its right of appeal to the Supreme in Appeal No. SC/46/1993, which was dismissed.

The 1st appellant initiated an action at the Federal High Court, Calabar, in suit no. FHC/CA/4/87, against the 2nd Respondent and 5 others, seeking the following reliefs, amongst others:

“1. A declaration that the defendants wrongfully and illegally transferred outside Nigeria various sums of money:

a. On 26th January 1983, $88,506.68 in Draft No. 5082/1822

b. On 25th February 1983, $32,184.00 in Draft No. 00000/82

c. On 12th September 1983, $179,615/70 in Draft No. 5904/304

d. N231,841.00 to Ghana through I.J Johnson and another huge sum of money using 1st Plaintiff’s Account No. 1671 opened at 1st Defendant’s Lagos Branch for the use of the defendants without the consent, permission or authorization of the plaintiffs and without any permission, approval or authorization from the Central Bank of Nigeria or the appropriate authority.

2. A declaration that the defendant wrongfully took over and operated the 1st Plaintiff’s Account No.1671 opened at the 1st Defendant’s Lagos Branch, without the consent, permission or authorization of the plaintiffs and without allowing the plaintiffs to further use or operate or do business with the said Account No.1671.

3. A declaration that the 1st Defendant is no more entitled to its license to practice as a commercial Bank as it is in breach of the banking laws and regulations in its dealings with the 1st plaintiff.

N10,000,000.00 (Ten Million Naira) damages for their wrongful acts of the defendants as demanded in Plaintiff’s letter dated 6th May, 1987.”

In opposition to this suit, the 2nd Respondent as 1st Defendant filed an Amended Statement of Defense. The Appellants’ reliefs were granted, and they took steps to enforce the judgment. It was at this stage that the Respondents, who had been absent from Court, filed applications to set aside the judgment and/or declare it a nullity. The applications were dismissed. Dissatisfied, the 1st, 2nd and 3rd Respondents appealed to the Court of Appeal, who, in allowing the appeal held that the proceedings should have abated immediately after judgment in Appeal No. CA/E/80/88 was delivered on the 4th of May 1990 and especially when the Appeal to the Supreme Court in Appeal No. SC46/93 had been abandoned and dismissed on the 22nd of February 1995.

The Court of Appeal went further to hold that the appeal of the Respondents herein raised the defence of res judicata and it ought to have been sustained. The Court of Appeal held that proceedings and judgment in Suit No. FHC/CA/4/87 were incompetent and accordingly struck out. The Court further held that the only valid judgment subsisting was in respect of the operation of Account No.1671 which was the judgment in Appeal No.CA/E/80/88. Dissatisfied with the judgment of the Court of Appeal, the appellants appealed to the Supreme Court.

ISSUES FOR DETERMINATION

The Court determined the following issues:

1. Whether the learned Justices of the lower Court were right in relying on the principles of Res Judicata to strike out the case of the appellants.

2. Whether the lower Court was right to have interfered with the findings of the trial Court and arrived at the conclusion that the judgment of the trial Court was shrouded in secrecy because the 2nd respondent was not given the opportunity to cross-examine PW2 and that the 1st respondent was not duly served with the writ of summons.

3. Whether the 1st respondent is enjoined in law to formulate two issues from one Ground of Appeal.

DECISION/HELD

In the final analysis, the Supreme Court dismissed the appeal.

RATIOS:

• EVIDENCE – ESTOPPEL PER REM JUDICATAM/RES JUDICATA: Conditions that a party pleading res judicata must establish to sustain a successful plea
• EVIDENCE – ESTOPPEL PER REM JUDICATAM/RES JUDICATA: Meaning of parties in relation to estoppel per rem judicatam
• EVIDENCE – ISSUE ESTOPPEL: Whether for issue estoppel to arise all the parties in the previous suit must be the same in the present suit
• EVIDENCE – ESTOPPEL PER REM JUDICATAM/RES JUDICATA: Whether an issue of res judicata is a jurisdictional issue that can be raised anytime
• PRACTICE AND PROCEDURE – SUBSTITUTED SERVICE: Whether substituted service must be executed in the exact manner stated in the Court order; effect of failure