Elijah Mtonga and 37 Ors v Wilderness Tours Limited (CAZ/08/286/2018) [2019] ZMCA 378 (11 July 2019)

IN THE COURT OF APPEAL OF ZAMBIA CAZ/O8/ 286/2018 Rl HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: ELIJAH MTONGA & 37 OTHERS AND WILDERNESS TOURS LIMITED ONDENT LIMITED REGISTRY ~ o. Box . LUS~ Before The Honourable Mrs. Justice P. C. M. Ngulube in Chambers. For the Appellant: Mr. Mulenga, Messrs Philsong & Partners For the Respondents: Mr. K. Musabandesu, Messrs M. M. Advocates RULING Legislation referred to: 1. The Court of Appeal Rules, Statutory Instrument No 65 of 2016 2. Rules of the Supreme Court (White Book) 1999 edition Cases referred to: 1. Lindsay Par kinson and Company Limited v Triplan Limited ( 1973) 2 All E. R. 2. Conwell v Tyler (1885) CHD 34 3. Glocom Marketing Limited v Contract Haulage (2011) ZR 482 Works referred to: 1. Simon Odger, On Civil Court Actions, Practice and Precedents. Twenty Fourth Edition, (London, Sweet and Maxwell, 1966). 2 . O'Hare and Browne, Civil Litigation, 12th Edition, (London, Thomson Sweet and Maxwell, 2005). R2 This is the respondent's application for security for costs. The application is made pursuant to Order 10 Rule 8(1) of the Court of Appeal Rules 1 . This Order is couched in the following terms: 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. The application is accompanied by an affidavit in support sworn by one Kuhema Chindumba Ngoma, the Finance Manager in the employ of the respondent. He deposed that this matter was commenced by the appellants on 14th May, 2018 before the Industrial Relations Division of the Court below. That the matter was then referred to mediation, but the parties failed to reach an agreement. Mr. Ngoma deposed that following the failure of mediation, trial of this matter was conducted in Livingstone High Court on 8 th , 9 th and 15th of October, 2018. The deponent avers that the respondent's counsel, Mr. K Musabandesu of M & M Advocates is based in Lusaka and the R3 respondent incurred transport costs for his travel by air to and from Livingstone on all the dates the matter came up for hearing. The deponent avers that the total amount incurred by the respondent towards the air travel costs is ZMW 10,291.00 and that the legal fees paid by the respondent to its advocates for representation in the Court below amounted to USD 17,470.65 inclusive of Withholding Tax and Value Added Tax. He deposed further that for representation in the Court of Appeal, the respondent and its advocates have agreed fees of USD 20,470.64 inclusive of Withholding Tax and Value Added Tax for work that the respondent's advocates will undertake in this appeal. Additionally, Mr. Ngoma deposed that the respondent has so far incurred costs of approximately ZMW 221,700.00 defending this matter in the High Court and is expected to pay a further amount of USD 20, 4 70.64 (approximately 247,700.00) to its advocates as agreed legal fees . That on account of these escalating costs there is now a genuine concern on the part of the respondent that the appellants will not be able to pay the respondent's party to party costs in the event that the appellants' appeal fails before this Court R4 and the appellants are condemned in costs both in the Court below and in this appeal. In further support the application, the respondent filed skeleton arguments and list of authorities. The gist of the arguments was that t h e appellants' appeal has limited prospects of success and th e respondent is not con fident that any ord er for costs against th e appellants will be satisfied. It was contended that the purpose for an ord er for security for costs is to protect a party wh o is forced to respon d to litigation at t h e election of someon e else. Th e cou rt was r efereed to t h e case of Sir Lindsay Parkinson and Company Limited v Triplay Limited1 where Lord denning MR. h ighlighted some of the salient factor s relevant when a court is exercising its discretion wh ether to order security for costs or not. Wher e th e fallowin g were ech oed- Whether the claim is bona fide and not a sham. Whether the claimant has reasonably good prospects of success indeed prospect of success at trial is one of the matters to be taken into account in an application for security for costs RS In summation the respondent prayed that this court should exercise its discretion in favour of the respondent. The application is opposed. In opposing the application, one Elijah Mtonga one of the appellants herein deposed that the court below did not make any orders as to costs and that even if their matter was dismissed by the court below the appellants believe that this appeal has merit as it raises novel questions which has not been adjudicated upon in the tourism sector following the enactment of the law. It is further deposed that the huge sums of money the respondent agrees with their advocate in form of legal fees can not be the basis on which the appellants should be ordered to pay security for costs especially that the respondent is aware that the respondents have a monthly income and are still in the employment of the respondent. Mr. Mtonga deposed that ordering the appellants to pay further security for costs in addition to what the appellants have already paid into court will impede the wheels of justice. The court was beseeched to dismiss the respondent's application. At the hearing, the gist of Mr. Musabandesu's submissions was that the appellants may not be able to pay the respondent's party to party R6 costs in the event that the substantive appeal pending determination is determined in favour of the respondent. He contended that the 38 appellants only managed to raise six hundred Kwacha (K 600) which was paid into court as s ecurity for costs. In response Mr. Mulenga submitted that in the case of Conwell v Tyler2 it was held that poverty is not a sufficient reason to order the plaintiff to pay security for costs. Counsel submitted that it appears that the core reason the respondent has applied for security for costs is the appellants inability to pay cost and make it condition precedent for this court to entertain the a ppeal. He submitted that the rationale behind the discretionary order b eing sought by the respondent is not to prevent parties from seeking justice. It was submitted that the reason why the parties are in court is because of the respondent's failure to meet its statutory obligations. That it will b e unjust to stop the appellants from pursuing the appeal on the ground that they will failure to pay costs. The court was referred to the case of Glocom Marketing Limited v Contract Haulage3 a High Court case in which Matibini J as h e then was discussed in great d etail the factors to be taken into consideration R 7 when granting an order for security for costs. He prayed that the respondent's application b e dismissed with costs. In reply, Counsel for the respondent submitted that the application for security for costs is not m eant to prevent the appellants from p u rsuing the appeal, but is m eant to protect the r e spondent from incurring needless costs. I have consid er ed the application b efore me, affidavit evidence, skeleton arguments a s well a s oral submissions by both Couns el. It is trite th at a successful party in litigation is usually entitled to h ave a substantial part of his costs paid by the losing party. However, t h e costs of every suit or matter and of each particular proceeding therein are in t h e discretion of t h e Court. Simon Odgers on Civil Court Actions: Practice and Precedents' Twenty Forth Edition, (London, Sweet and Maxwell, 1966), cautions at page 337, "that before exercising the discretion to order any plaintiff to give security for costs, the Court will have regard to all the circumstances of the case and will grant the order if it thinks just to do so." R 8 Furth er, 0 Hare and Browne, Civil Litigation 12th Edition (London, Thomson Sweet and Maxwell, 2005), s t ates at p age 359, t h at "an order for security of costs seeks to protect the party in whose favour it is made against being unable to enforce any costs order he may later obtain. The order if complied with, will provide the party in whose favour it is made with funds normally held in Court available for the payment of any costs the Court later awards." Clearly Order 10 rule 8( 1) places discretion on th e Cou rt or th e Judge in deciding whether or not to grant security for costs. Order 23 rule 1 of the Rules of the Supreme Court 1999 edition, deals with the circumstances in which the Court may, on an application made by a defendant, order s ecurity for costs 'if having regard to all the circumstances of th e case, it thinks it just to do so. The circumstances are- (a) the plaintiff is ordinarily out of the jurisdiction, or (b ) the p laintiff (not being a plaintiff who is su ing 1n a representative capacity) is a nominal p laintiff who is s u ing for R9 the benefit of some other person and there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so, or (c) the plaintiff's address 1s not stated in the writ or other originating process or is incorrectly stated, or (d) the plaintiff has changed his address during the proceedings with a view to evading consequences of the litigation I note that the circumstances listed above have been widely used in our jurisdiction to apply for security for costs. The court must always carefully consider the effect of making an order for security of costs, and in the light thereof to determine to what extent or for what amount an appellant (or the respondent as the case may be), may be ordered to provide security for costs On the application for security of costs, Lord Denning M. R. observed in the case of Sir Lindsay Parkison and Company v Triplan Limited1, that the following matters or issues are vital. (a) whether the claimant's claim is bona fide, and not a sham. Factors to be taken into account in this regard are: RlO (i) whether the claimant has reasonably good prospects of success; (ii) whether the defendant has made any admissions 1n its statement of case, or elsewhere; and (iii) whether there has been substantial payment into Court (as opposed to a small amount in order to get rid of a nuisance claim). (b) whether the defendant is using the application for security oppressively so as to stifle a genuine claim; and (c) delay in making the application. I will discuss some of the factors necessary to this matter. It is trite that in an application for security for costs the court will look into the prospects of success. However, in so doing the court must guard against considering the merits or demerits of the appeal. Further, the possibility or probability that the appellant will be deterred from pursuing his appeal by an order for security for costs is a sufficient reason for not ordering security. I am aware that the burden to show that a security for costs order would probably have the effect of stifling litigation is on the claimant and that the Court Rll ought to weigh the injustice to a claimant if prevented from pursuing a proper claim by an order for security with the possible injustice to the defendant if they could not recover their costs. Prima facie, the appellants appears to have a genuine claim against the respondent. In weighing and deciding whether the appellants' claim is likely to be stifled by an order of costs, I am required to take into account the ability of a claimant to settle the sum applied for as security for costs. In this case, Mr. Mtonga has deposed that granting the defendant the order sought will be a denial of justice because he does not have the capacity to raise such a huge sum of money purported to be security for costs. Further, Mr. Mtonga deposed that the application is made in bad faith , and is designed to frustrate the appellants from pursuing a claim that has reasonable prospects of succeeding. Additionally, it is essential that applications for security of costs are made at an early stage in the proceedings. Lateness, may itself be a reason for refusing an order. Most importantly the amount to be imposed as security of costs should be such as the Court thinks just in all the circumstances of the case. In casu, the respondent has exhibited the amount of costs already incurred as well as the costs it R 12 will occur in d efending the appeal. However, the respondent has not clearly come out to mention how much it is claiming for in security for costs. Be that as it m ay, in view of the fact that the appellants are residents in Zambia and looking at the employee, employer relationship existing between the parties, as well the fact that the appellants have paid into court the minimum required amou nt for security for costs, I have come to the conclusion that this is not a proper case to order security for costs. Dated this the 11 th day of July, 2019. HONOURABLE MRS JUSTICE P. C. M NGULUBE COURT OF APPEAL JUDGE.