Moonga v Standard Chartered Bank PLC (CAZ 8 37 of 2018) [2018] ZMCA 398 (4 April 2018)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) CAZ/08/037/2018 FOR THE APPELLANT: MR. L. MWANAABO OF L. M. CHAMBERS FOR THE RESPONDENT: MR. R. MWALA OF A. M. WOOD & CO RULING This is an application on behalf of the Respondent for an order for security for costs and for a stay of proceedings. The application is made pursuant to Order 10 Rule 8 and Order 7 Rule 1 of the Court of Appeal Rules. The summons was accompanied by an affidavit in support both of which were filed on 22nd February 2018. The application was prompted by the Appellant’s decision to appeal against the decision of the High Court in favour of the Respondent rendered on 23rd January 2018. R2 The Memorandum of Appeal was filed into Court on 6th February 2018 containing four grounds of appeal. The main ground advanced in the affidavit in support of the application is that the appeal is unmeritorious as the Appellant admitted his indebtedness to the Responsible in the Court below. Order 10 Rule 8 (1) of the Court of Appeal Rules Statutory Instrument No. 65 of 2016 provides as follows; “The Court may, at any time, upon application or on its own motion, order security or further security for costs to be given, and may order security to be given for the payment of past costs relating to the matters in question in the appeal, and may make compliance with that order a condition precedent to the entertainment of an appeal.” Counsel for the Appellant did not file an affidavit in opposition on account of the Appellant’s absence from jurisdiction but filed heads of argument in opposition to which Counsel for the Respondent replied orally. The Respondent relied wholly on the heads of argument while Mr. Mwanaabo augmented the heads of argument by viva voce submissions. R3 He contended that since the action related to a mortgage, costs relating thereto were sufficiently covered and that the Respondent had not proved the inadequacy of the security. It was further submitted that since an order for security for costs was within the Court’s discretion, the Court ought not grant the request in view of the first submission on the security within the mortgage instrument. On the other limb of the application that the security ought to cover costs in the Court below, it was submitted that the rule relied upon did not specifically provide for security for costs in the Court below. In the alternative it was submitted that the sum of K550,000 set as security for costs is too high and can only act to deter the Appellant from prosecuting the appeal and implored the Court to drastically reduce it. On the appeal’s prospect of success, it was submitted that the same had merit but further added that the merits of the appeal should not be the focus. The case of Isaac Lungu V Mbewe Kalikeka SCZ Appeal No, 114/2013 was called into aid. R4 In response, Mr. Mwala submitted that under Order 10 Rule 8 (1) the Court has the discretion to both order payment of security for costs and to make its payment a condition precedent to the hearing of the appeal. It was further maintained that “past costs” in the rule refer to costs incurred in the Court below. On the adequacy of the security within the mortgage, it was submitted that the same was different from the security being asked for by the Respondent and that in any case, no evidence of the adequacy of the said security had been furnished to the Court. It was however conceded that since security for costs was in the Court’s discretion, the sum proposed was an estimation of the costs incurred in the Court below and to be incurred in the appeal but that the Court could revise the figure. The rationale for the granting of an order for security for costs on appeal is to ensure that a Respondent who was successful in the Court below is assured of collecting costs incurred in defending the appeal should the appeal fail. It is for that reason that in considering whether or not to grant or make an order for security for costs, the Court considers the prospects of success of the appeal and if it forms the view that the appeal is totally devoid of any merits, then the order shall be granted. R.5 The case of Isaac Lungu V Mbewe Kalikeka cited by the Appellant, however, makes the following caution; “We accept as submitted by Counsel for the Respondent that the Court faced with an application for security will look into the prospects of success. But the Court will not be enthusiastic about considering the merits of the claim unless it is possible to clearly demonstrate, one way or another, that there is a high degree of probability of success or failure”. This caution means that unless the Court can be shown, without delving into the merits of the appeal that the appeal will either fail or succeed then the application cannot be granted. The Court went further to state that; “The possibility or probability that the Appellant will be deterred from pursuing his appeal by an order for security for costs is sufficient reason for not ordering security”. In both the written arguments and the submissions in reply, Counsel for the Respondent did not challenge the authorities cited. I have considered both the Judgment of the Court below appealed against and the four grounds of appeal and I do not consider them sufficient indication of the prospects of the appeal. Further, in the R6 affidavit in support of the application the deponent simply avers that the appeal lacks merit because the Appellant admitted his indebtedness but in my discernment of the grounds of appeal, other issues are raised which can only be determined through a full hearing of the appeal. In considering the argument relating to the "past costs” as referred to in Rule 8, I will borrow from Order 59 Rule 10(5) of the Rules of the Supreme Court 1999, which provides as follows; “The Court of Appeal may, in special circumstances order that such security shall be given for costs of an appeal as may be just. ” The underlining is for emphasis of the fact that security ought to focus on costs to be incurred on the appeal and not during trial. Under Order 10 Rule 8(1) the relevant portion is couched in the following terms; “Past costs relating to the matters in question in the appeal”. My view is that this portion of the rule does not necessarily relate to the costs incurred at trial otherwise the drafters of the rule would have clearly stated that security could be ordered for costs which were incurred at trial. It is further my view that you cannot secure costs that have already been incurred in the Court below. R.7 It is therefore, my considered view that unless the Applicant can demonstrate that they have incurred in the past costs relating to matters in the appeal, the Court shall only consider costs to be incurred in defending the appeal and not more. As regards the making of the payment of security a condition precedent, there is no question that upon taking all circumstances into consideration, if the order for security is granted, the Court may also make the payment a condition precedent to the hearing of the appeal. For the afore stated reasons, I order security for costs in the sum of K50,000.00 but the same shall not act as a condition precedent to the hearing of the appeal. DATED AT LUSAKA THIS 4th DAY OF APRIL 2018. J. M. SIAVWAPA JUDGE