DIVISION: IN THE HIGH COURT, ACCRA
DATE: 21ST OCTOBER, 1963
BEFORE: SOWAH J.
CASE REFERRED TO
In re Overend, Gurney and Co.; Ex parte Swan (1868) 6 Eq.Cas. 344
NATURE OF PROCEEDINGS
APPLICATION by the plaintiff to strike out certain paragraphs of the defence on the ground that they
tended to delay, prejudice and embarrass a fair trial. The facts as stated in the headnote are summarised
from the pleadings of both parties.
COUNSEL
Dr. de Graft-Johnson for the plaintiff.
Nii Odoi Annan for the defendants.
JUDGMENT OF SOWAH J.
This is an application for an order to strike out paragraphs 2 to 9 of the defendants’ pleading and
counter-claim on the grounds that they tend to prejudice, embarrass or delay a fair trial of the action.
Mr. Nii Odoi Annan, counsel for the defendants, raised a preliminary objection that the applicant ought to
have brought this application soon after the defence was delivered, and before the pleadings closed, and
that the delay in bringing this application was unreasonable, and therefore, the court should not entertain
the application. In support of his contention, Mr. Nii Odoi Annan referred to the comments in the 1960
Annual Practice on this rule which state that such applications should be made promptly and before the
close of the pleadings.
[p.351] of [1963] 2 GLR 349
Dr. de Graft-Johnson was not able to give any reasonable explanation as to why he delayed in bringing
this application except to state that the tactics adopted by the defence in filing a full statement of defence
with the entry of appearance embarrassed the plaintiff. I am of the view that the proper time to bring such
an application is before the close of the pleadings, or on a summons for directions, but I also consider that
the words of the Supreme [High] Court (Civil Procedure) Rules, 1954,1 Order 19, r. 29 are wide enough
to allow an applicant to do so at any time. The court has the power, at any stage of the proceedings to
order to be struck out any matter which may tend to prejudice, embarrass or delay a fair trial of the action.
In the circumstances, I exercise my discretion in favour of the applicant. The objection, therefore, fails,
and I intend to consider the application on its merits.
Dr. de Graft-Johnson dealt, in extenso, with whether in law the defendants’ defence could be an answer to
his claim and whether the counter-claim was maintainable against his client. Dr. de Graft-Johnson
submitted that his client was a holder in due course of a bill of exchange and as such holder he was
entitled to maintain an action against the acceptor of the bill. Counsel further submitted that the defence
raised was only intended to delay the action since his client was not a party to the alleged transaction
between the endorser of the bill and the defendants.
Mr. Nii Odoi Annan in answer submitted that the application was misconceived. He contended that Dr. de
Graft-Johnson’s argument might be summed up in this way, namely, that the defence put up was bad in
law. If counsel for the plaintiff was right in his contention, then he ought at this stage of the proceedings
to apply under Order 25, r. 1 and not make an application to strike out the defence. The second leg of Mr.
Nii Odoi’s argument was that the plaintiff was the holder in due course of an over-due bill, as such
holder, he took it with all the equities which attached to the bill and that if an action was brought on such
a bill the defendant or acceptor was entitled to maintain any right of set-off which he might have against
the assignor of the bill.
Dealing, firstly, with the second leg of Mr. Nii Odoi Annan’s argument, I think that it is now well settled
law that an endorsee of a bill which is overdue takes it subject to all the equities. But it is equally settled
law that the equities must attach to the bill itself and not be the equities of the parties. The only plea of the
defendant is that he has a right of set-off against the endorser of the bill. In my view such a right of set-off
is not an equity attaching to the bill, and in this connection, I will refer to the case of In re Overend,
Gurney and Co.; Ex parte Swan2 where the issue as to what equities attach to a bill is discussed. In my
view a holder of an overdue bill takes it subject to all the equities, but he does not take
[p.352] of [1963] 2 GLR 349
it subject to claims arising out of collateral matters. In In re Overend, Gurney and Co.; Ex parte Swan, Sir
R. Malins V.C. said,3
“First, that an indorsee or transferee for value of a bill of exchange after dishonour, has a right to recover
against the acceptor, whether the bill was given for value or not, unless there be an equity attached to the bill
itself amounting to a discharge of it. I have already stated that the right of set-off is not an equity which
attaches to the bill itself.”
In my view the defence set up is bad in law having regard to all the authorities. Nevertheless I am unable
to strike out the defence because it has not been shown how the defence will tend to delay the trial or
prejudice and embarrass a fair trial. I think Mr. Nii Odoi Annan was on surer grounds when he stated that
this application should have been taken out under Order 25, rr. 1 and 2.
Further I would not have been disposed to strike out the defence in view of the fact that on the face of the
writ there is no cause of action. For a cause of action to accrue on a bill of exchange the plaintiff must
show presentation of the bill, disgrace or dishonour of the bill, and failure to meet the bill after notice.
This has not been shown on the plaintiff’s writ of summons. For these reasons I will dismiss the
application with 10 guineas costs.
DECISION
Application dismissed with costs.
K.T.
