Relevance of Res Judicata in Interlocutory Applications

Frequently, especially in applications for subsequent interlocutory injunctions, a preliminary objection may be raised to the effect that the application is res judicata. Why one would need a subsequent injunction is usually because the initial one has lapsed and the other side is engaged in fresh acts that need restraining to maintain the status quo. The objection may also be raised in applications to strike the defence where an application for summary judgment had initially failed.

 

How objection based on res judicata is raised

Res judicata is raised either in pleadings or at the trial. It seeks to implore the court to deny audience to a party alleged to be raising matters already decided by a court of competent jurisdiction between the same parties.

 

A preliminary objection is usually to the effect that the present application and/or suit is res judicata and, therefore, incompetent. In argument, the objector likely alleges in support that the present application, for instance, is similar to a prior and specified application in the same suit which was settled by the court. In alternative, the objector may argue that the issues raised in the present application were raised and finally decided in the previous application.

 

This usually presents unfamiliar waters to the applicant's side especially to the experienced practitioners who are used to res judicata as a challenge only against the main suit. This article addresses generally this frequently used doctrine of civil procedure. The article goes the extra mile to consider res judicata in preliminary applications.

 

Doctrine of Res judicata defined

According to Kuloba J in Judicial Hints to Civil Procedure, the expression 'Res judicata' means a thing or matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment.  Res judicata is essentially a bar to a subsequent proceedings involving same issue as had been finally and conclusively decided by a competent court in a prior suit between the same parties or their representatives.

 

The doctrine of res judicata applies to both suits and applications whether they be final or interlocutory. The doctrine restricts the courts in exercising their jurisdiction if the matter in the new issue was heard and finally decided by a competent court.

 

To paraphrase the Honourable Court of Appeal in Gichuki v. Gichuki [1982] KLR 285 the doctrine operates where the dispute is between the same parties and involving the same cause of action as another matter which had previously been adjudicated by a court of competent jurisdiction. In the above case, the appellant was challenging the trial judge's ruling in an application to have the dispute referred to arbitration by elders. The judge had found that the matter in question had been decided previously by a resident magistrate. The court upheld the trial judge's decision.

 

Rationale of the Doctrine of Res judicata

The rationale of the doctrine of res judicata was stated in Timotheo Makenge-v-Manunga Ngochi CA(Nrb) Civil Appeal No. 25 of 1978. Wambuzi JA (as he then was) was of the view that the doctrine is predicated in the public interest need to have an end to litigation. There is also need to prevent abuse of the court process by unscrupulous litigants against hapless defendants. The doctrine also helps prevent parties from gambling with justice system such that where a party is awarded a judgment by one court, he tries another to see whether he can hopefully raise his stakes.

 

The courts are already clogged and overwhelmed. They can hardly spare time to repeat themselves on issues already decided upon. Chances are, if they do, they will end-up contradicting the earlier decisions and making a fool of their colleagues.

 

Section 7 of the Civil Procedure Act

Sections 7 of the Civil Procedure Act define the doctrine of Res judicata as applying to a suit or issue in which matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties. The law is as clear as a bell. Section 7 of the Civil Procedure Act is mandatory in its prohibition:

 

"No court shall try any suit in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court."

 

The test for application of res judicata

Kuloba quoting Law Ag V-P in Kamunye and Others-v-Pioneer General Assurance Society Ltd [1971] EA 263 at 265 has stated the test whether or not a suit is barred by res judicata thus:

 

"Is the Plaintiff in the second suit trying to bring before the court, in another way and in the form of a new cause of action, a transaction which he has already put before a court of competent jurisdiction in earlier proceedings and which has been adjudicated upon? If so, the plea of res judicata applies not only to points upon which the first court was actually required to adjudicate but to every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence, might have brought forward at the time. The subject matter in the subsequent suit must be covered by the previous suit for res judicata to apply"

 

Conditions for doctrine of res judicata to apply

The conditions for application of doctrine of res judicata were authoritatively laid down in Willie v. Muchuki & 2 others (Plaintiff/Applicant's authorities' No. 8) to be three. The court in the case held:

 

"For the doctrine of res judicata to apply, three basic conditions must be satisfied. The party relying on it must show;

(a)   That there was a former suit or proceeding in which the same parties as in the subsequent suit litigated.

(b)   The matter in issue in the latter suit must have been directly and substantially in issue in the former suit.

(c)   That a court competent to try it had heard and finally decided the matter(s) in controversy between the parties"

 

The court was upholding the ruling of Bosire J (as then was) in Nairobi HCCC No. 1322 of 1993 Caltex Oil(Kenya) Ltd-versus-Mohamed Yusaf & Others.

 

In Bulhan & Another v. Eastern and Southern African Trade and Development Bank (Plaintiff/Applicant's authorities' No. 9) it was stated by the court that "matter in issue" under section 6 of the Civil Procedure Act does not mean any matter in issue in the suit but has reference to the entire subject in controversy.

 

The court put it succinctly: "The subject matter must be covered by the previously instituted suit and not vice versa." The court in the above case was clear that for res judicata to apply, the issues alleged to be similar must have been raised in the earlier suit, heard and finally determined or decided by the court.

 

In the Bulhan case, the court found that a court's decision on an application for temporary injunctions under order 39 does not decide the issues in question in the main suit. The orders and views or the basis thereof are not final. The suit must still go for trial and however emphatic or positive the statements or findings of the judge, the same are not conclusive and final.

 

Scope of the Res judicata doctrine

The decided cases interpret the explanation above on res judicata as implying a wide scope of the doctrine of res judicata. In Rajwani versus Roden (Respondent's List No. 17) the court stated that

"Estoppel per res judicatam applies not only to what is expressly decided but also to what is assumed and admitted and is fundamental to what is decided."

 

The above resonates with decision in Yat Tung Investment Co Ltd vs Dao Heng Bank and Another [1975] AC 581. It suffices to quote the decision of the court therein:

 

"But there is a wider sense in which the doctrine may be appealed to, so that it becomes an abuse of process to raise in subsequent proceedings matters which could and therefore should have been litigated in earlier proceedings."

 

The Court of Appeal in Pop-in (Kenya) Ltd & 3 others versus Habib Bank AG Zurich (No. 19) quoted the above passage to hold that:

 

"the plea of res judicata applies not only to points which the court was actually required by the parties to form opinion and pronounce judgment, but every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence, might have been brought forward at the time."

 

Res Judicata applies to interlocutory applications

The doctrine applies not only to main suits but also to interlocutory applications. The court in Kanorero River Farm Ltd and 3 others v. National Bank of Kenya Ltd[2002]2 KLR 207 considered and affirmatively settled that issue. The court in that celebrated case held that the doctrine applies to both suits and applications whether they be final or interlocutory.

 

The court in reaching this conclusion upheld the definition of suit entailed in section 2 of Civil Procedure Act. The court stated in that regard:

 

"A suit is defined by the Civil Procedure Act as any civil proceedings commenced in any manner prescribed by Civil Procedure Rules. Therefore any determination of such an application by a court of competent jurisdiction would in appropriate circumstances operate as the plea in bar called res judicata."

 

Similar application not res judicata if grounded on new facts

There is no doubt that res judicata applies to suits between the same parties involving the same cause of action which had previously been adjudicated by a court of competent jurisdiction. The rationale is prevent abuse of the process of the court by vexing the same party on the same facts in the same matter twice. 

 

But res judicata cannot reasonably be construed to prevent a party who seeks the court intervention to prevent a fresh and irreparable assault on his right. In the Kanorero case (supra), the court held on this point that:

 

"The parties in this suit were not precluded from instituting another application for an injunction as long as the fresh application was grounded on new facts which could not have been relied on in the earlier application." (emphasis mine)

 

The facts and holding in the Kanorero Farm case

The facts in Kanorero Farm case were that the defendant/chargee had initially sought power of sale over properties belonging to the plaintiffs. The plaintiffs filed a suit challenging the validity of the statutory notices and sought an injunction restraining the defendant. The parties by consent agreed to have the application for interlocutory relief marked as settled and the defendant to be at liberty to issue fresh notices. The defendant thereafter issued fresh notices of their intention to exercise its statutory power of sale. The plaintiffs again filed suit challenging the validity of those statutory notices, claiming that the statutory power of sale had arisen and that the intended sale was in contravention of the mandatory provisions of the Auctioneers Rules. The defendants opposed the application on the grounds that the issue was res judicata and that the application was incompetent.

 

The court was of the view that a determination on basis of consent by the parties had the same effect as a determination after a hearing and argument. Even then, the court concluded that the second application could not be precluded

 

In that case, the court was of the view that the issue in the initial application was whether or not the defendant could validly exercise its power of sale in furtherance of the statutory notices that it had already issued. Further that the issue was implicitly resolved in favour of the plaintiffs and hence the order that the defendant issue fresh notices and pay plaintiffs' costs of the application. The court then proceeded to confront the question whether in the circumstances of the satisfactory determination of the first application the plaintiffs could institute a fresh and similar application for interlocutory relief. On the question, the learned judge's conclusion was unequivocal:

 

" In my judgment provided the fresh application is grounded on new facts which could not have been relied on in the earlier application, it would not be precluded by the doctrine of res judicata."

 

In the courts view, the consent order allowed the defendant to serve fresh notices. A new factual situation was thus created.

 

Conclusion

In conclusion, it is settled that the doctrine of res judicata applies to applies to applications with the same force as it applies to main proceedings. Hpwever, an application which would otherwise be res judicata is not if based on new facts which could not have been relied on in the earlier application.

AN INTRODUCTION TO EXEMPLARY DAMAGES

By  PAUL N. MUSYIMI

Introduction

This article is prompted by the inexplainable inclination, very frequent with advocates who rely on precedents in drafting, of praying for orders for exemplary damages in virtually every suit. Recently , I encountered exemplary damages, in a suit  for compensation on ground of redundancy and unfair dismissal, as one of the prayers for exemplary damages against the Defendant. The Defendant had allegedly failed to give proper notice to the Plaintiffs' trade union and the government of their eminent dismissal of redundancy. On that ground, and in a suit whose cause of action was breach of express and implied terms of an employment contract, the Plaintiff sought exemplary damages ostensibly to punish the Plaintiff and forewarn other like-minded employers against flouting the regulations on pre-redundancy criteria in Kenya.

 

Definition of exemplary damages

Exemplary damages are damages which are punitive in nature and generally intended to teach the defendant that tort does not pay. They are awarded in addition to compensatory damages. Thus the plaintiff receives a windfall over and above his true loss. It has been said that the distinction between aggravated and exemplary damages that aggravated damages are awarded for the conduct that shocks the plaintiff and exemplary damages are awarded for conduct that shocks the court.

 

Conditions for award of exemplary damages

As per Halsbury's Laws of England 4^th Edition Volume 12 Para. 1190 at page 474, exemplary damages may only be awarded in actions for torts. Exemplary damages may not be awarded in actions for breach of contracts as was held in Kenny-v-Preen [1962] 3 All ER 814, CA.

 

Where exemplary damages provided for by statute

At one time it was believed that exemplary damages could be awarded in any case  where the defendant had behaved outrageously. However, in Rookes v Barnard [1964] AC 1129; [1964] 1 ALL ER 367, the House of Lords held that except where is specifically authorized by a statute exemplary damages should only be awarded in two categories of cases.

 

Against oppressive, arbitrary or unconstitutional action by government servant

One, in case of a tort occasioned by oppressive, arbitrary or unconstitutional action by servant of the government. In Cassell & Co. Ltd  v Broome [1972] AC 1027;  [1972] 1 All ER 801, the House of Lords applied the approach in Rookes v Barnard where Lord Reid said that this category did not extend to oppressive action by a private corporation or individual.

 

For tort calculated by Defendant to yield profit

The second case in which exemplary damages may be available is where the defendant has calculated  by him to make a profit for himself by committing the tort even after paying compensatory damage. In Cassell & Co Ltd v. Broome (supra), the court was of the view that the damages came into this category. The defendant published a book which made defamatory statements about the plaintiff. The book was published in the face of threats by the plaintiff that he would bring a libel action against the defendants. The plaintiff was awarded 15,000 pounds compensatory damages and 25,000 exemplary damages. It was held that the plaintiff was entitled to exemplary damages because the defendant  had calculated  that it was worth running the risk of the book being held to be libelous because of the profits which they thought they would make from the sales of the book and the attendant publicity. But it should be noted that the mere fact that a tort is committed with the intention of making a profit is not sufficient of itself to bring the case within this category. There must be some evidence that the defendant decided that there was a profit to be made out of the wrongdoing.

 

Scarcity of caselaw on exemplary damages in Kenya

There are few direct cases in Kenyan jurisprudence dealing with exemplary damages. To be specific, only two local reported cases make mention of exemplary damages. In the case of Gitau-v-Attorney General [1990] KLR 13, the learned judge found that the actions of two police officers who wrongfully assaulted, battered and falsely imprisoned the Plaintiff were oppressive, arbitrary and unconstitutional and therefore fell in the first category of the instances where exemplary damages may be awarded. That it is, the police officer's actions were oppressive, arbitrary and unconstitutional action by the servants of the Government and therefore warranted an award of exemplary damages. The court awarded Kshs. 10,000 as exemplary damages over and above the awarded general damages of Kshs. 25,000.

 

In Biwott-v-Mbuguss & Another (No. 2) [2002] 1 KLR 321, a defamation/libel suit, exemplary damages had been sought as an alternative to aggravated damages.  It appears the Plaintiff's counsel in the case chose to prefer/insist on aggravated damages in his submissions which were eventually awarded.

 

Conclusion

There is no doubt exemplary damages are strict remedy be sought only in those rare occasions when the settled conditions for its award are met. The following are the key points to remember when dealing with award or prayer for exemplary damages. Firstly, the cause of action must be a tort claim (remember exemplary damages are only applicable in tort and never in claims for breach of contract). Secondly, exemplary damages will be granted upon proof of oppressive, arbitrary and unconstitutional action by a servant of the Government but a private corporation. In addition, exemplary damages are also awarded where it is shown that the plaintiff had calculated to gain profit through the tort. Lastly, exemplary damages will be be readily awarded where they are expressly provided for by a statute.  

Pamela Akora Imenje v Akora ITC International Ltd & Another

Reported by: PAUL N. MUSYIMI

CASE DETAILS

COURT: High Court, at Milimani

CASE NO: Civil Suit No. 368 of 2005

JUDGE: Waweru J

DATE: 17^th August, 2007

 

CASE OUTLINES

Arbitration-application for stay of proceedings-Section 6(1) of the Arbitration Act, 1995-plaintiff filing suit in breach of articles of association-articles providing for mandatory settlement of disputes by arbitration- whether the Plaintiff can apply under section 6(1) for stay of proceedings and reference to arbitration

 

Civil Practice and procedure-striking out suit-the Defendant urging striking out of suit in submissions against an application-whether striking out order may be granted without a formal application for it on the court record

 

CASE SUMMARY

The ruling reported dealt with the following two issues:

1. Whether the Plaintiff can apply for stay of proceedings under section 6(1) of the Arbitration Act, 1995;
2. Whether an order striking out the suit can be granted without a formal application in the court record.

Held:

The court held as follows on the foregoing issues:

1. From the wording of section 6(1) of the Arbitration Act, 1995, it is clear that it is available only to the defendants.
2. An order striking out the suit is too drastic in nature to be granted without a formal application on the record of the court.

CASE NOTES

The court was ruling on an application by plaintiff under section 6(1) of the Arbitration Act seeking stay of the proceedings and reference to arbitration dated 12^th October 2005.

 

Apparently the Plaintiff, a member of the Defendant Company, had filed the instant suit in default of the Company's articles of association. The Articles of association provided mandatory settlement of disputes by arbitration. The Plaintiff failed to invoke the method provided by the articles and was now, through the vehicle of the instant application, seeking to have recourse to section 6(1) of the arbitration to refer the matter to arbitration.

 

The Plaintiff cited as the main ground for the application the fact that the Defendants had neither entered appearance nor filed defence in the suit.

 

On their part, the Defendants objected the entire suit stating that the same was bad in law and that it constituted abuse of the process of the court given that the articles of association of the 1^st Defendant provided for a mandatory mode of settlement of disputes by arbitration which the Plaintiff had failed to invoke. The Defendants therefore urged the court to strike out the entire suit.

 

The judge ruled that the Plaintiff's application was misconceived as having chosen to file a suit instead of invoking the arbitration clause in the articles of association of the 1^st Defendant; she could not purport to later have recourse to section 6(1) of the Arbitration Act. The court held that from their wording, the provisions of section 6(1) of the Arbitration Act, 1995 is available only to the defendants. Therefore, the Plaintiff having made her bed by filing the suit, she had to lie by standing or falling by it. The court therefore dismissed the Plaintiff's application with costs.

 

The court, however, avoided striking the entire suit in limine as the Defendants had urged in their submissions. In this, it cited the fact that no formal application was on record for the same. The court held that the order striking out the suit was too drastic in nature to be granted without a formal application on the record of the court.