Makadia t/a Oracare Dental Clinic v Registered Trustees of Medical Aid Society of Malawi (Civil Cause 645 of 2013) [2017] MWHC 909 (31 October 2017)

IN THE HIGH COURT OF MALAWI ZOMBA DISTRICT REGISTRY CIVIL CAUSE NO 645 OF 2013 BETWEEN DR MAKADIA t/a ORACARE DENTAL CLINIC..........000ceeeesesenereeerseetaees PLAINTIFF -AND- THE REGISTERED TRUSTEES OF MEDICAL AID SOCIETY OR MALAWI....cccccsccceeseeeerceetsscensnsnnnnseenensennnesennneasenesese gs eee oe DEFENDANT CORAM H/H B. CHITSAKAMILE, ASSISTANT REGISTRAR Mr Chalamanda for the Defendant Mr Msuku for the Plaintiff Mr McDonald Kasoka, Official Interpreter RULING Introduction ee The defendant took out an interpartes summons for stay pending appeal against the order on assessment of damages handed down by Her Honour Mrs Kaira on 16/05/17 awarding the plaintiffs a total of K1, 519,916,200.65. This was on the strength of summary judgment entered against the defendant. The defendant filed a Notice of Appeal herein on 93/05/17 which was within the time prescribed by the rules of procedure. On the same day the court stayed execution pending appeal following the defendant's ex-parte application. This is the ruling on the interpartes application for stay of execution pending determination of the appeal. The Parties’ Arguments Counsel for the defendant argued that the basis of the appeal against the order on assessment was that the same was excessive and wrong in principle. He argued that the approach as regards the measure of damages was that where there is a breach in a contract terminable by notice, the damages payable for loss of business should be in respect of the notice period. Eurther, he argued that the defendant had himself admitted that his business was not doing well and as such would not be able to repay if he was awarded the full amount and the appeal was successful. The defendant again argued that the defendant is not in a financial position to be able to pay the judgment sum even if execution was levied and assets seized. Further he argued that if execution proceeded, the defendant will most likely be pushed into liquidation which will have untold negative ramifications on the health sector. Counsel further faulted the plaintiff's assertion that the defendant was making a lot of money in contributions to be able to pay up the judgment sum easily. He then referred the court to several cases on the issue of stay of execution pending appeal. He further stated that the Plaintiff has infact already started enjoying fruits of litigation in that he was paid K6,300,000.00 being the defendant's own assessed damages and K1 0,000,000 for costs. This he believed meant that the defendant is not bent on thwarting the plaintiff's enjoyment of the fruits of litigation herein. In conclusion he urged the court to consider that what would be just and equitable in ihe total circumstances of the case is the order that the stay herein should continue to subsist. 2 Counsel for the Plaintiff opposed the application. He started by indicating that a stay of execution pending appeal is not granted as of right. He faulted the defendant for alleging that the plaintiff would not be able to pay back the money if paid in full without giving evidence as required by law. He further dismissed this stating that if the plaintiff would not be able to pay back, it would be because of the defendants own wrong and cannot rely on it fo ask for a siay. Further the plaintiff argued that it was not true that the defendant would not be able to pay the judgment sum as the simple arithmetical calculations of the defendanis’ income from contributions showed they were making enough money io be able to pay off the debt. Counsel for plaintiff also took issue with the defendant's assertion that execution herein would push the defendant into liquidation and put a lot of people into hardship and inconvinience. He stated that courts have never granted a stay of execution on those grounds. The plaintiff then put across an alternative submission that he would be agreeable to the court granting a partial stay of execution in which the defendant would be ordered fo pay K150,000,000.00 or at least 5% of the judgment sum. Applicable Law Order 59/13/2 of the Rules of the Supreme Court provided a guideline when an application such as one before me is made. It is in the following terms: “If an appellant wishes to have a stay of execution, he must make express application for one. Neither the court below nor the Court of Appeal will grant a siay unless satisfied that there are good reasons for doing so. The Court does not make a practice of depriving a successful litigant of the fruits of his litigation - But fhe Court is likely to grant a stay where the appeal would otherwise be rendered nugatory or the appellant would suffer loss which could not be compensated in damages”. The legal principles which guide a court when considering an application for a stay of execution of judgment pending appeal are thus very clear. The general rule is that the Court does not make a practice of depriving a successful litigant of the fruits of his or her litigation: see J. Z. U. Tembo v. Gwanda Chakuamba, supra, Re Annot Lyle (1886) 11 PD 114. The Malawi Supreme Court of Appeal restated this position in Dangwa and Another v. Banda [1993) and Mike Appel & Gatto v. Saulosi Chilima, [2013) MLR 231, MSCA. Therefore, the fact that a party has exercised his or her right to appeal to a higher Court does not mean that the judgment appealed against must be stayed: see Order 59, rule 13 of RSC. However, the Court is most likely going to grant a stay where the appeal. if successful, would be rendered nugatory: see Wilson v. Church (No. 2) (1879) 12 Ch D 454. In Press Corporation v Cane Products Limited [2005) MLR 377, the court emphasized that the burden to show special circumstances warranting a stay of execution is always on the applicant: see also Mhango v. Blantyre Land and Estate Agency Limited 10 MLR 55 and Barker v. Lavery (1885) 14 QBD 769. The applicant therefore needs fo demonsirate to the Court that there are special circumstances in favour of granting a stay. Further, a Court will order stay of execution pending appeal when it is satisfied that the applicant would suffer loss which could not be compensated in damages: See paragraph 59/13/1 of the RSC. The court requires that evidence or facts be presented to the Court in order for it to properly assess the position: see National Bank of Malawi t/a Nyala investments, MSCA Civil Appeal Number 6 of 2005 (unreported). At the end of the day the question of whether or not to grant a stay is in the discretion of the Court and each case must be assessed on its facts and merits, Nyasulu v. Malawi Railways Limited 1993] 16(1) MLR 394. 4 Generally, the defendant bears the onus to prove that the Plaintiff will not be able to pay back the damages awarded to it. In Anti-corruption Bureau Vv. Atupele Properties Ltd, MSCA Appeal Case No. 27 of 2005 (1st February 2007), Tambala JA (Rtd), made the following pertinent observations: "First it [stay of execution] is within the discretion of the Court. Secondly that the general rule is that the Court shall not interfere with the right ofa successful party to enjoy the fruits of litigation. Third where a respondent would be unable to pay back the money then a stay may be justified. Lasily, the court would still have discretion to refuse a stay even where the respondent is impecunious if the stay would be utterly unjust and oppressive. The bottom line is that the applicant must demonstrate that the respondent falls within the exceptions. It is not for the respondent to demonstrate capacity to pay back. The duty lies on the applicant to establish the respondent's lack of capacity to pay back." in Malawi Revenue Authority v Nadeem Munshi Civil Appeal No 67 of 2013(High Court, unreported) Mwaunguly, J (as he then was} stated that the court should consider all the circumstances of ihe case and the risk of injustice. The appeal in that case was against how a money judgment was arrived at and the court stayed execution of the money judgment until the appeal was determined indicating that the granting of the stay was fair and equitable in the circumstances. Determination Se Having heard arguments from both parties, it is abundantly clear that there is an appeal against the order on assessment of damages made by the Assistant Registrar. The thrust of the application for stay is that there is an arguable appeal pending and that the appeal would be rendered nugatory if the plaintiff is paid money and then the appeal succeeds because he would be unable to pay back the money. 5 Admittedly, the Notice of Appeal filed raises arguable issues that cannot just be wished away. The quantum of the award is itself under scrutiny. The appeal is against a money order and the outcome thereof would affect the very money order in issue. Further, it is a notorious fact that the sum of money involved is extremely huge. It is not a sum that can be received, invested and just be paid back without ado when recalled by an order of court. | thus have to be alive to this fact and perform a balancing act between facilitating enjoyment of fruits of litigation and also affording the defendant the right and opportunity to pursue a meaningful appeal in the higher court. It was argued that if the order on assessment is to be enforced. It has the potential of wiping out the whole capital base of the defendant and perhaps push the defendant into liquidation. While this fact would not fetter the discretion of the court, itis a relevant consideration as to what would be just and equitable considering ihat there is an appeal that has been lodged. in Nyasulu v Malawi Railways Limited [1993] 16(1) MLR 391, the MSCA granted a stay of execution agreeing that the defendant would encounter considerable difficulties to recover the money that would be paid out if the appeal turned oui successful. In the matter at hand, lam of the view that the appeal lodged is worth pursuing. If successful it would have repercussions on the monetary award made herein which perhaps would require paying back of the money by the plaintiff. It is my considered opinion that payment of such money would indeed seriously affect the status of the defendant as a going concern. Further it would noi be easy for such huge sums of money to be paid back by the plaintiff if ihe appeal succeeded. The result is that there is a high degree of probability that if there is no stay of execution, money is paid out or execution is levied, asseis seized and perhaps liquidation, and the appeal succeeds, the appeal will be nugatory and the effects of the refusal of stay 6 will be irreversible. In the circumstances considerations of justice and equity tilt towards the granting of the stay of execution more so when the plaintiff has received other sums from the same litigation. Disposal The short of it is that | hereby grant the order of stay of execution pending appeal as applied for by the defendant until the determination of the appeal. Costs in the cause. Pronounced in chambers this 315 day of October, 2017 \ Benedicius hitsakamile ASSISTANT REGISTRAR