China Geo- Engineering Corporation v Mangani Zulu (APPEAL NO. 133 OF 2008) [2013] ZMSC 56 (27 February 2013)

IN THE SUPREME COUR OF ZAMBIA HOLDEN AT LUSAKA (CIVIL JURISDICTION) APPEAL NO. 133 OF 2008 BETWEEN: CHINA GEO-ENGINEERING CORPORATION APPELLANT AND MANGAN! ZULU RESPONDENT CORAM: MAMBILIMA, DCJ; CHIRWA AND MWANAMWAMBWA, JJS; On 22nd July 2010 and 27th February 2013 For the Appellant: Messrs. C. P. CHUULA, of Chuula & Company Legal Practitioners For the Respondent: Mr. R. MAINZA, of Mainza and Co. MAMBILIMA, Dci delivered the Judgment of the Court. JUDGMENT CASES AND LEGISLATION REFERRED TO: 1. ORDER 25/L/3 OF THE RULES OF THE SUPREME COURT (199 Edition), Page 501 2. SAMUELS VS LINZI DRESSES LTD (1981) QB 115 at pages 126-7 When we heard this_ appeal, we sat with our brother, CHIRWA JS, who has since retired. This is therefore the majority decision of the Court. This appeal is from the Ruling of the High Court, in which judgment in the sum of K90,257,928 was entered in favour of the Respondent, on account that there was no defence to the Respondent's claim. The Respondent, who was the Plaintiff in the Court below, applied to strike out the defence and to enter judgment pursuant to Order 25 / L/ 3 of the Rules of the Supreme Court ( 1999 Edition). It is on record that on the 19th April 2007, the lower Court gave Orders for Directions, requiring parties to the case to file their bundles of documents and pleadings; and to exchange witness statements and skeleton arguments by 5 th June, 2007. The Respondent complied with the Order for Directions while the Appellant did not. The matter came up in chambers on 11th September 2007. At this hearing, the learned Counsel for the Appellant informed the Court that he had had difficulties to get instructions from his client. He however, stated that his client did not have any defence to the claim and did not wish to contest the issue of liability. He conceded that judgment could be entered in favour of the Respondent subject to agreement on the quantum and in default of such agreement, to refer the matter to the Dep;uty Registrar for assessment of the actual amount due. The learned Judge then directed the parties as follows: "Since it is the position of the Defendant that liability is denied in this matter, I will proceed on the basis that the parties should file a Consent Judgment in Court within 14 days from today and that during this period of time they should sit down and agree on the amount that will constitute the agreed judgment debt. Once that consent had been filed, then I will endorse and write a judgment on the terms and conditions that the parties will have agreed upon and so costs and interests will be part of the consent. We will leave it that." It is on record that on the same date of 11th September 2007, the Respondent forwarded a draft consent judgment to the Appellant for its signature. As at 12th November 2007, when the Court made its Ruling, the Appellant had not returned the document to the Respondent for filing in Court. The Court found that the Appellant's conduct amounted to contumelious default. According to the Judge, the Appellant, through its conduct, had demonstrated that it had no regard for the Order of the Court. In the circumstances, he saw no justifiable reason as to why the Respondent should not have his judgment. The Judge consequently entered judgment in favour of the Respondent in the amount claimed, to be paid at current commercial bank lending rate from January 2005, until full payment. Costs were also awarded to the Respondent. The Appellant has now appealed to this Court against the Ruling of the Court below. The Memorandum of Appeal on record contains three grounds of appeal. On the date of hearing, the learned Counsel for the Appellant, by motion, revised the second ground of appeal and added a fourth ground. The four grounds of appeal are now as follows: 1. That the learned trial Judge erred in law and fact when he entered judgment for a liquidated amount when it was on record that the quantum was in dispute without referring the matter for assessment. 2. That the learned trial Judge erred in law and fact when he dismissed the Defendant's defence on the basis that a Consent Order had not been executed and that there had been non compliance with orders for Directions notwit\lstand.ing the fact that such Directions had been overtaken by the Defendant's admission of the claim subject to assessment of quantum. 3. That the learned trial Judge erred in law and fact when he entered judgment for a liquidated sum in the absence of any evidence being tendered or adduced to support the amount in which the judgment was entered. 4. That the Court erred in fact and law when it dismissed the Defendant's counter claim and failed to award the Appellant an opportunity to make counter claims on the merits. Both parties filed and relied on their written heads of argument. Mr. CHUULA, learned Counsel for the Appellant argued the first and third grounds of appeal together. He submitted that the advocate who appeared for the Appellant in the Court below did inform the Court that the Appellant was conceding to judgment being entered in favour of the Respondent, subject to assessment of the quantum of damages. That the Court then ordered the parties to enter into a consent judgment and agree on the amount that would constitute the judgment debt. Mr. CHUULA argued that although the claim in this case was for a liquidated amount, the lower Court should not have looked merely at the fact that the pleading stated a specific figure; it should have looked at the circumstances surrounding the facts presented before it. According to Counsel, although in many instances, a party to proceedings may plead a specific figure in the writ of summons, the nature of the contractual relationship existing between the parties may necessitate the Court to order that the matter should proceed to assessment. He contended that this case has peculiarities which show that it would have been appropriate to send the matter for assessment of damages. It involves a construction contract which, 0y its very nature, is subject to estimates and final confirmation on the cost of work done. To buttress his argument, Counsel referred us to some clauses in the contract in which it was mentioned that the values were estimates. One such clause was Clause 1 which stated:- "The quantity and rate in the attached Bill of Quantity is estimated. The actual quantity shall be determined by the engineer on site. The estimated value of the works is K255, 780,000." Counsel thus argued that damages in this case cannot be deemed to be liquidated; they should be appropriately dealt with through assessment. While conceding that the mode in which the Appellant's case was conducted in the Court below left a lot to be desired, it was Counsel's submission that the cornerstone of the justice system is to afford a party a hearing on the merits of the case. That the Appellant should not be unjustly penalized when its petition is meritorious. To ~upport his contention, Counsel referred us to a portion of the Ruling by CHIBESAKUNDA, JS, on an application by the Appellant for a stay of execution. The portion reads:- "However, guided by the authorities cited in particular the principle well enshrined in our judicial system that all triable issues should go to Court, I therefore grant a conditional stay.'' The learned Counsel for the Appellant also argued the second and fourth grounds of appeal together. He submitted that the basis of a Consent Order is that both parties must reach agreement as to the content. In his view, although the parties in this case did not reach agreement on the terms of the Consent Order, this did not mean that the Court should substitute the terms and take no consideration of the Appellant's position and surrounding evidence. Counsel repeated his submission that judgment should only have been entered on liability leaving the quantum of damages to be assessed by the Deputy Registrar. According to Counsel, the non compliance by the Appellant with the Orders for Directions given by the lower Court was in part due to the fact that the Appellant conceded to judgment being entered on liability. On the dismissal of the Appellant's counter claim by the lower Court, Counsel submitted that the very reasoning that has been advanced in support of the first ground of appeal, pertaining to a construction contract applies, that is; the fact that the value of the contract was an estimate which would be subject to confirmation by a consultant engineer. He contended that this was a sufficient ground for the Judge to have ordered that the counter claim should proceed to be heard. In response, the learned Counsel for the Respondent argued the first three grounds of appeal together. It was his .submission that the learned trial Judge did not fall into error, either in law or in fact, as contended by the Appellant when he entered judgment in I favour of the Respondent for a liquidation sum of K90,257,928.00. Counsel referred us to page 109 of the record of appeal which contains the proceedings of 11th September 2007, in the Court below. In the said proceedings, the learned Counsel for the Appellant conceded to have judgment entered on liability and proposed that the matter be referred to the Deputy Registrar for assessment for the actual amount due. The learned Counsel for the Respondent also referred us to the comments of the Judge in which he directed that the pa~ies should file a Consent judgment within 14 days and agree on the amount that would constitute the judgment debt. Counsel submitted that in compliance with the directive by the Judge, the Respondent drafted a Consent Judgment and forwarded it to the Appellant's advocates for execution. The Appellant's advocates did not execute the draft and consequently, the Respondent filed summons for an Order to strike out the defence for non compliance with the Order for Directions and for entry of judgment pursuant to Order 53/L/3 of the SUPREME COURT RULES 1 • He submitted that this application was supported by skeleton arguments and a list of authorities, but the Appellant, for l reasons best known to itself, elected not to file any affidavit in opposition. That the application to strike out the defence and enter judgment was heard on 23r d October 2007, on which date the Appellant did not even attend Court, despite being served with the Court process. That the learned Judge proceeded to hear the application and reserved his ruling. That the Ruling was delivered on 12th November 2007 and judgment was entered in favour of the Respondent in the amount claimed. Counsel further submitted that the Appellant attempted stay the execution of the Ruling but its application was refused with costs by the Court below. That the Appellant relaunched its application for stay of execution before a single Judge of the Supreme Court on 23rd February 2008. In a ruling delivered on 1st April 2008, CHIBESAKUNDA JS, only granted a conditional stay, on condition that the Appellant should pay the judgment sum into Court within 10 days, failure to which the stay of execution would be discharged. The learned Counsel for the Respondent submitted that from the foregoing, it is clear that the trial Judge did not fall into error either in law or in fact, as contended by the Appellant. That the Appellant, through its advocate, conceded that they had no L defence. It did not wish to contest the issue of liability but proposed that the matter being referred to the Deputy Registrar for assessment. The learned Counsel for the Respondent submitted that the suggestion by the Appellant, that a liquidated claim needed to be assessed by the Deputy Registrar, is not only absurd but also misconceived in law because there is no law which provides for assessment of liquidated claims such as the one in this case. He argued that the Appellant , in its Writ of Summons and Statement of Claim, claimed for a s pecific sum of K90,952,928. Counsel submitted tha t the contention in the 2 nd ground of appeal, that the ·court erred when it dismissed the Appellant's defence on the of basis non compliance with an Order for Directions is also misconceived. He argued that to the contrary, the Judge dismissed the defence because the Appellant's advocate on his own volition, conceded tha t h e had no defence to the Plaintiffs claim. On the third ground of appeal, Counsel submitted that the contention by the Appellant that the lower Court erred in law and fact when it entered judgment for a liquidated sum in the absence of any evidence tendered or adduced to support the judgment debt was again misconceived. He contended that when a Defendant admits the Plaintiffs claim, such as was the case in this matter, it is not necessary for the Plaintiff to adduce evidence to support its claim because the admission by the Defendant is sufficient to warrant the entry of judgment in favour of the Plaintiff. Counsel urged us to dismiss this appeal with costs, as it has no merit. We have considered the judgment of the lower Court and the issues raised in this appeal. We will deal with the first and third grounds of appeal toge:ther. In these two grounds, the Appellant is contending with the decision of the Court below in entering judgment for a liquidated amount when, according to the Appellant, the quantum was in dispute and there was no evidence tendered to support the judgment sum. The summons for an order to strike out the defence for non compliance with the Order for Directions and for entry of judgment, were taken out under Order 25/1/3 of the RULES OF THE SUPREME COURT1 • This rule prescribes sanctions against parties guilty of contumelious default, that is; default bordering on insolence and abuse. When an order is given by the Court, parties are expected to comply with it. If a party defaults persistently, " ... it is fair to conclude that the party ... has no confidence in the merits of his case or has lost the desire to pursue it." Consequently, the party's defence may be struck out and judgment entered for the Plaintiff. The justification for the rule is found in the words of ROSKIL, W in the case of SAMUELS VS LINZI DRESSES LTD2 when he said: " ... orders are made to be complied with and not ignored." Coming to the facts of this case, it is not in dispute that the Court did, on 19th April, 2007, give an Order for Directions requiring both parties to file their bundles of documents and pleadings, and; to exchange witness statements and skeleton arguments. The Appellant did not comply with the said Order for Directions prompting the Respondent to invoke Order 25/L/3 of the Rules of the Supreme Court to apply for entry of judgment. The application was heard on 11th September 2007. The Appellant, through its Counsel accepted liability. The learned Counsel for the Appellant made it clear that although judgment could be entered in favour of the Respondent, the quantum of the actual money owing should be assessed by the Deputy Registrar. On this statement by Counsel, the Court ordered that: la) The parties should file a consent judgment within 14 days; (b) During this period, they should sit down and agree on the amount that will constitute the judgment debt; and (c) The Court would then endorse and write a judgment on the terms and conditions to be agreed upon by the parties. It is on record that the Appellant again defaulted and did not comply with the Court's direction in that while the Respondent sent a draft consent judgment, the Appellant never executed it. Even on the date of hearing the summons for entry of judgment, the Appellant did not appear despite service of process. How then did the Appellant expect to pursue the matter if it could not even comply with Orders for Directions; respond to a draft consent judgment; and attend Court when the application was being heard? In our view, the persistent default on the part of the Appellant created an impression that the Appellant had no intention to bring the litigation in this case to a close. The Appellant was content to stay away and keep the matter in abeyance. We cannot therefore fault the learned trial Judge when he found that the Appellant was guilty of contumelious default. The Appellant cannot now cry foul when it sat on its laurels and missed an opportunity to engage the Respondent and agree on the terms including the quantum of the proposed consent judgment. In our view, the Court was entitled, on the facts of this case, to enter judgment in favour of the Respondent. What we have said above in respect of the first and third grounds of appeal, equally applies to the second and fourth grounds. Much as the Appellant can argue that the Orders for Directions were overtaken by its admission of liability, the fact still remains that it never engaged the Respondent on the terms of the draft Consent Order. In our view, the quantum of damages would have been the major part of such an engagement. The same can be said of the counter claim; the Appellant never showed up to prosecute it or indeed to engage the Respondent in the negotiation of the draft consent judgment. As at the date of the Ruling, there was no evidence before the Court to support the counterclaim. We again cannot fault the trial Judge for having dismissed the counterclaim, on account of lack of evidence. The Appellant was in default and it cannot complain when it is visited by sanctions prescribed in the rules for such default. With this state of affairs, the assumption is that it had no quarrel with the liquidated amount claimed in the Writ of Summons and the Statement of Claim. We I find no substance either 1n the second and fourth grounds of appeal. We find that this whole appeal h a s no merit. It is dismissed with costs to be taxed in default of agreement. - :J 1) I. C. Mam bilima DEPUTY CHIEF JUSTICE 15