Electricity Supply Corporation of Malawi Ltd. v Samson Evance Kondowe t/a Saveman Investiment (MSCA Civil Appeal 67 of 2017) [2017] MWHC 145 (20 December 2017)

IN THE SUPREME COURT OF APPEAL SITTING AT BLANTYRE MSCA CIVIL APPEAL NO. 67 OF 2017 (Being High Court o f Malawi - (Lilongwe District Registry) - Commercial Case No. 132 o f 2016) BETWEEN ELECTRICTY SUPPLY CORPORATION OF MALAWI LIM ITED........... APPELLANT SAMSON EVANCE KONDOWE t/a SAVEMAN INVESTMENT............. RESPONDENT AND CORAM: Justice Anthony Kamanga, SC, JA Roka o f Counsel for the Appellant Mvalo o f Counsel for the Respondent Minikwa Recording Officer Justice Anthony Kamanga, SC, JA 1. Introduction RULING On 30th November, 2017, I declined to grant an application herein filed, on behalf of 1.1 the Electricity Supply Corporation o f Malawi Limited, (the “Appellant”), for a stay of proceedings in the High Court (Commercial Division) Lilongwe District Registry, in Commercial Case No. 37 o f 2016, pending the hearing and determination o f an appeal against the judgment of the court below delivered on 8th October, 2017. I indicated at the time that I would deliver a formal ruling, giving detailed reasons, in due course; and I now deliver the following ruling. On 8th November, 2017, the Appellant issued summons for an application for a stay of 1.2 the proceedings in the court below, pending the hearing and determination o f an appeal against the judgment o f the court below. The application for a stay of the proceedings was lodged pursuant to Order I r. 18 o f the Supreme Court o f Appeal Rules as read with O. 59 r. 13 of the Rules of the Supreme Court. 2. Backsround In order to appreciate the basis of the application for stay of the proceedings, it is 2.1 necessary to briefly outline the relevant facts in this matter. 2.1.1 On 23rd March, 2016, the Respondent commenced proceedings against the Appellant for alleged negligence resulting from a fire which destroyed the Respondent’s bakery, including various equipment at the bakery. The Respondent’s case revolved around an apparent “defective” electricity meter supplied and installed by the Appellant at the Respondent’s bakery. 2.1.2 On 27th April, 2016, the Appellant filed a defence to the Respondent’s claim denying liability. 2.1.3 On 9th Octobef, 2017, the court below delivered its judgment. The court below, among other things, held that the Appellant was in breach of an implied warranty to supply to the Respondent a meter which was o f merchantable quality. The court below, accordingly, found the Appellant liable for the loss occasioned to the Respondent as a result o f the fire, and ordered that the loss or damages should be assessed by the Registrar. 3. The Appellant’s appeal asainst the decision o f the court below On 18th October, 2017, the Appellant filed a notice o f appeal, pursuant to section 21 of 3.1 the Supreme Court o f Appeal Act and Order III r 2 of the Supreme Court o f Appeal Rules, against the decision o f the court below. 3.2 The grounds of appeal, as set out in the Notice of Appeal, are as follows- “3.1 The [court below] erred in holding that the [Appellant] breached an implied warranty to supply goods o f merchantable quality (being a meter) to the [Respondent] when the issue o f breach o f warranty was not pleaded. 3.2 The [court below] erred in finding the [Appellant] liable fo r all losses occasioned to the [Respondent] despite finding/holding that there was no negligence on the part o f the [Appellant]; 3.3 The decision o f [court below] erred is against the weight o f the evidence. ”. 4. The Appellant’s application for stay o f proceedings in the court below 4.1 On 20th October, 2017, the Appellant filed summons in the court below for an application of stay o f the proceedings in this matter, pending the hearing and determination of an appeal against the judgment. The Appellant’s application was dismissed by the court below, apparently on the grounds that “there are no proceedings to be stayed since judgment was delivered”. The Appellant now comes to this Court by its application lodged on 8th November, 2017 4.2 to stay the proceedings in the court below. The application is essentially to stay the assessment of damages by the Registrar, pending the hearing and determination of the appeal against the judgment entered by the court below. 5. Submissions on behalT o f the Appellant 5.1 During the hearing o f this application on 30th November, 2017, Counsel for the Appellant adopted the affidavit that had been sworn in support o f the application as well as the skeleton arguments that had been filed in support of the application. 5.2 The gist o f the arguments and submissions for the Appellant in support o f the application to stay the proceedings are contained in the following paragraphs of the affidavit filed in support of the application- “13. The Appellant strongly believes that the likelihood o f success o f the appeal is very high considering that the issue o f breach o f warranty to supply goods o f merchantable quality which was the basis for the finding o f liability against the Appellant was not pleaded by either o f the parties. 14. The [Appellant] verily believes should the proceedings in the [court below] proceed and the damages and costs to be paid to the [Respondent] are assessed and paid out before the determination o f the appeal, the [Respondent] will not be able [to] repay the same to the [Appellant] in the event that the appeal is successful. ”. Respondent’s affidavit in opposition and submissions on behalf o f the Respondent The Respondent disputes the Appellant’s assertion that- (a) the likelihood o f success o f the appeal is very high; and (b) should the proceedings in the [court below] proceed and the damages and costs to be paid to the [Respondent] are assessed and paid out before the determination of the appeal, the [Respondent] will not be able [to] repay the same to the [Appellant] in the event that the appeal is successful. 6. 6.1 6.2 In relation to paragraph 6.1 (b), it is argued and submitted, on behalf o f the Respondent, that the Respondent has several businesses and would not be unable to repay the any assessed damages paid to him, if the appeal succeeds. The Respondent submits that the application to stay proceedings pending the hearing 6.3 and determination o f the appeal is without merit and should be dismissed with costs. 7. Refusal by court below to erant application to stay proceedines pending hear ins and determination o f the appeal 7.1 As indicated in paragraph 4.1, on 20th October, 2017, the Appellant filed summons in the court below for an application for a stay o f the proceedings in this matter, pending the hearing determination o f an appeal against the judgment. The Appellant’s application was dismissed by the court below, apparently on the grounds that “there are no proceedings to be stayed since judgment was delivered” . 7.2 In my opinion, the judgment o f the court below is an interlocutory judgment; by its nature an interlocutory judgment envisages an assessment o f damages. An interlocutory judgment is final on liability except that certain aspects o f the judgment such as value, damages, or interest, require ascertainment or further determination. However, until the assessment of damages is done, it seems to me that the court below was still seized o f the matter; the process o f assessment o f damages was certainly still to be done in the court below, albeit by the Registrar. There certainly still were in the court below proceedings which could have been stayed, if the court below deemed it appropriate to do so. 7.3 Indeed, Order I rule 18 o f the Supreme Court o f Appeal Rules anticipates that in all cases the court below would have jurisdiction to hear applications for stay, and actually requires that any such application must first be lodged in, and determined by, the court below; and further that only if the court below refuses to grant the application may an applicant be entitled to have the application determined by this Court. 7.4 Consequently, the application to stay proceedings lodged in the court below on 20th October, 2017 should have been considered by the court below in the context that it was still seized o f the matter, and had jurisdiction to hear and determine the application for stay o f the proceedings; and the application should not have been considered and determined in the context that there were no proceedings before the court below to stay. 8. Assessment o f Damages 8.1 During the hearing o f this application on 30th November, 2017, both Counsel for the Appellant and Counsel for Respondent indicated that the assessment o f damages in this matter had already started; that the parties had appeared before the Registrar in court below on several occasions; and that the assessment was scheduled to be completed on 4th December, 2017. 9. Whether the proceedings should be staved pending the determination o f the appeal 9.1 I have carefully considered the arguments and submissions on behalf o f both parties, as well as the case authorities referred to by both Counsel in their skeleton arguments and cited in the course of their submissions. I am most grateful to both Counsel. 9.2 I bear in mind that the grant or refusal of stay o f proceedings is at the discretion o f the Court. I also bear in mind that my duty at this stage is not to determine the merits o f the appeal. However, I need to be satisfied that the issues raised for or against the granting o f a stay o f the proceedings are sufficient to justify the exercise o f my discretion one way or another. (See: Attorney General v Sunrise Pharmaceuticals and Chombe Foods Products MSCA Civil Appeal 11 of 2013). 9.3 The cardinal principle in determining a stay o f proceedings, pending the hearing and determination o f an appeal should, in my considered view, be the same as the principle applicable to stay o f execution of a judgment, pending the determination o f an appeal, namely, that a successful litigant should not be deprived o f the fruits o f litigation, unless there are sufficient reasons for doing so. 9.3.1 For a long time, until the decision o f the Supreme Court o f Appeal in Mike Appel & Gatto Ltd v Saulos Chilima MSCA Civil Appeal No 20 o f 2013, our courts were guided by the following principles: that the court does not make it a practice to deprive a successful litigant o f the fruits of litigation; that the court will consider whether there are special circumstances which mitigate in favour o f granting the order of stay of execution o f judgment, and the onus is on the applicant to prove or show such special circumstances; that the court would likely grant a stay of execution o f judgment where the appeal would be otherwise be rendered nugatory, or the appellant would suffer loss which would not be compensated in damages; that where an appeal is against an award of damages, stay o f execution of a judgment would normally be granted if the applicant satisfies the court that if the damages were paid, there will no reasonable prospect o f recovering the damages in the event o f the appeal succeeding; and that whether or not an appeal has a good chance of success is not a ground upon which a court will order a stay of execution of a judgment. In Mike Appel & Gatto Ltd v Saulos Chilima the Supreme Court o f Appeal, while 9.4 accepting the principles outlined above, noted that there was no reason why the discretion of the court should be fettered by the straight jacketed application o f special circumstances, and the Court advocated the approach adopted in the English cases o f Hammond Suddards Solicitors v Agrichem International Holdings 2002 EWCA Civ. 2065 and Moat Housing Group-South Ltd v Harris The Times January, 13 2005 CA. In Hammond Suddards Solicitors v Agrichem International Holdings it was held that 9.4.1 “...the court has discretion whether or not to grant a stay”; that “whether the court should exercise its discretion to grant a stay will depend upon all the circumstances o f the case, but the essential question is whether there is a risk o f injustice to one or the other or to both parties if it grants or refuses a stay. In particular, i f a stay is refused, what are the risks o f the appeal being stifled? I f a stay is granted and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment? On the other hand, i f a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks o f the appellant being able to recover any moneys paid to the respondent. 9.4.2 In Moat Housing Group-South Ltd v Harris it was held that in determining whether to grant a stay o f execution o f judgment, regard must be had, among other things, to the potential prejudice to the parties; the paramount consideration in granting or refusing to grant a stay o f execution of judgment is the potential prejudice to either or both o f the parties, and the risk of injustice to one or both o f the parties. 10. Counsel for the Appellant has submitted that the good prospects o f success o f the appeal in this matter is a ground for a stay o f the proceedings. Indeed, as rightly pointed out by Twea, JA in Attorney General v Sunrise Pharmaceuticals and Chombe Foods Products (supra), “when one takes the broad view o f “sufficiency” o f reasons or the “frivolity” o f [applications] which are argued before this court all the time one can see that such arguments call on the court to assess the strength o f the case. ...” . However, that is not and cannot be the only consideration. 10.1 Counsel for the Appellant has also submitted that should the proceedings in the court below proceed and the damages and costs to be paid to the Respondent are assessed and paid out before the hearing and determination o f the appeal, the Respondent will not be able to repay the same to the Appellant in the event that the appeal is successful. However, it is not sufficient to assert that the Respondent would not be able to repay any assessed damages; the burden is on the Appellant to show that the Respondent would be unable to repay any assessed damages. It does not appear to me that, on a balance o f probabilities, the Appellant has shown that the Respondent would be unable to repay any damages that may awarded to the Respondent if the appeal succeeds. 11. The issue which arises in this application is, having regard to all the circumstances obtaining in this matter, what is the risk of injustice to one or the other party in these proceedings if a stay of the proceedings, pending the hearing and determination o f the appeal, is granted or refused; alternatively, what is the potential prejudice or risk of injustice to either of the parties if a stay o f the proceedings, pending the hearing and determination o f the appeal, is granted or refused. 11.1 The Appellant’s application to stay the proceedings in the court below, pending the hearing and determination o f the appeal against the judgment of the court below, is essentially to stay the assessment o f damages by the Registrar. After the court below delivered its judgment, the next logical process in this matter is assessment of damages by the Registrar. It is this logical process which the Appellant wishes stay. Yet, as confirmed by both parties, the process o f finalising the assessment of damages has almost been completed, if not by now finalized. 11.2 If the assessment of damages has indeed been finalised then there is no process to stay. If, on the other hand, the process, which both parties confirm has reached an advanced stage, is yet to be finalised, what is or should be the justification for staying the process. In other words what is the risk o f injustice to one or the other party in these proceedings if a stay o f the proceedings, pending the hearing and determination of the appeal, is granted or refused; alternatively, what is the potential prejudice or risk of injustice to either o f the parties if a stay of the proceedings, pending the hearing and determination of the appeal, is granted or refused. 12. On the face o f it, the proceedings in the court below appear to be regular. In my view, the assessment of damages in this matter is the logical process through which the Respondent would realise his fruits o f litigation. I see no justice, but injustice and prejudice, to the Respondent to deprive him o f the logical process o f realising his fruits of ligation in the absence of justifying reasons. In my considered view, it would be utterly unjust and unconscionable to deprive the Respondent o f his right to have damages assessed in this matter. 12.1 In any event, it seems to me that the Appellant’s application may be premature, if not misconceived. If the intention was to stay the enforcement or execution o f the judgment, in the sense of staying payment o f damages to the Respondent (and the arguments and submissions of Counsel for the Appellant during the hearing o f the application seems to support the view that this was the intention), then the Appellant should allow the logical process o f assessment of damages by the Registrar to finish, and lodge an appropriate application after the assessment of damages by the Registrar. It does not seem logical to me stay payment o f damages which are yet to be assessed. Furthermore, where as in this case, the intention is to stay the enforcement or execution of the judgment, in the sense of staying payment o f damages, an application to stay to proceedings does not achieve that intention. The appropriate application would, perhaps, be an application to stay execution of a judgment after the assessment o f damages by the Registrar. I, accordingly, decline to grant the Appellant’s application for a stay of proceedings, 12.2 pending the hearing and determination of the appeal. The application is dismissed with costs to the Respondent. Pronounced in Chambers ;his 20th day of December, 2017 at Blantyre. Justice Anthony Kan^mga, S ^ dUSTIC&OF' 6