Falcon Press Limited and Anor v Fackson Katongo Kangwe and 46 Ors (APPEAL NO. 52 OF 2009) [2013] ZMSC 49 (19 August 2013)

IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) APPEAL NO. 52 OF 2009 BETWEEN: FALCON PRESS LIMITED GEORGE FRANCIS ROBERTS AND 1 ST APPELLANT 2ND APPELLANT FACKSON KATONGO KANGWA AND 46 OTHERS RESPONDENT CORAM: MWANAMWAMBWA, WANKI AND MUYOVWE, JJS On the 20th February, 2013 and 19th August, 2013 For the Appellants: Mr. T. M. Chabu of Messrs. Ellis and Company For the Respondents: Mr. D. Mazumba of Messrs. Douglas and Partners JUDGMENT WANKI, JS, delivered the Judgment of the Court. CASES REFERRED TO: - 1. Sonny Paul Mulenga, Vismer Mulenga, Chainama Hotels Limited and Elephants Head Hotel -Vs- Investrust Merchant Bank Limited (1999) ZR1O1. 2. Stanley Mwambazi -Vs-Morester Farms Limited (1977) ZR 98, 102. 3. Martin Sampa and Others and ZCCM Holdings PLC. 4. 5 . Kaulanda Nyirenda and Others. Zamseed -Vs- Lupunga (19994). 6. Water Wells Limited -Vs- Wilson Samuel Jackson (1984) ZR 98. Jl 7. 8. 9. Fanny Muliango and Samson Muliango -Vs- Namdou Magasa and Muruja Transport and Farming Company Limited ( 1988 - 1989) ZR 209. Kitwe City Council -Vs- William Ngu'ni (2005) ZR 57. Peter Nga'ndwe and Others -Vs- Zamox Limited and Zambia Privatisation Agency SCZ Judgment No. 13 of 1999. 10. Caltex Oil Zambia Limited -Vs- Teresa Transport Limited Appeal No. 96 of 2001. 11. Ndola City Council -Vs- C. Mwansa (1994) ZR OTHER WORKS REFERRED TO:- 12. The High Court Rules, Chapter 27 of the Laws of Zambia, Order 35 Rule 5. 13. Supreme Court Rules Order 59/ 13/2. By a Notice of Motion the Appellants Falcon Press Limited and George F. Roberts applied to renew their application for an Order for Stay of Execution of Judgment obtained in the Appellants' absence pending determination of appeal against refusal to set aside Judgment. The background leading to this Motion 1s that, the Appellants applied before a Single Judge of this Court for an Order for Stay of Execution. The Single Judge after considering the affidavit evidence in Support and in Opposition to the application in his Ruling J2 delivered on 18th day of January, 2013 found no merit 1n the application and accordingly refused to grant it. The Motion was supported by an affidavit that was sworn by the 2 nd Appellant. The said affidavit disclosed that on or about the 17th December, 2011 the High Court had delivered a Judgment in the absence of the Appellants which was brought to the attention of the Appellants when the bailiffs came to the 2 nd Appellant's house and threatened to levy execution of the Judgment; on or about the 31 st August, 2012 the Court rendered a Ruling refusing to set aside Judgment dated 17th December, 2012 obtained in the absence of the Appellants and discharged the Order Staying Execution of the said Judgment; and that the Appellants had made the application herein before the Single Judge of the Supreme Court which was refused. The Appellants exhibited the Judgment of 17th December, 2011, the Sheriffs Seizure Form, and the Ruling of the Single Judge as exhibits "GFRl", 2, 4 and 10 respectively. Further to the Affidavit in Support Mr. Chabu, Counsel for the Appellants filed Appellants' heads of argument on which Counsel solely relied at the hearing of the Motion. J3 In relation to prospects of success and defence on merit, Mr. Chabu submitted that the application for Stay of Execution of Judgment obtained in the Appellants' absence dated 17th November, 2011 pending determination of appeal against Ruling dated 31 st August, 2011 refusing to set aside the said Judgment should be granted on the grounds that the Appellants have sufficiently shown the prospects of success of the appeal; and the defence on merits under paragraphs 11-16 of the Affidavit in Support of exparte Summons for Stay of Execution of Judgment obtained in the Appellant's absence pending appeal. Counsel contended that the Ruling dated 18th January, 2013 delivered by the learned Single Judge should be reversed. The case of SONNY PAUL MULENGA, VISMER MULENGA, CHAINAMA HOTELS LIMITED AND ELEPHANT'S HEAD HOTEL LIMITED -VS- INVESTRUST MERCHANT BANK LIMITED (11 was cited where the Court had the following to say about the requirement for exercising discretionary power when granting a Stay of Execution as follows:- "-More is required to be advanced to persuade the is desirable, Court below or this Court that it necessary and just to stay a judgment pending appeal. The successful party should be denied immediate J4 enjoyment of a judgment only and good and sufficient grounds . .. . In exercising its discretion whether to grant a stay or not, the Court is entitled to preview the prospects of the proposed appeal." Mr. Chabu pointed out that a Judgment obtained 1n the absence of the other party is in essence a default Judgment and the principles relating to setting aside a default Judgment apply. According to Counsel, this is implicit from Order 35 rule 5 of the High Court Rules which provides:- "Any judgment obtained against any party in the absence of such party may, on sufficient cause shown, be set aside by the Court, upon such terms as may seem fit." Counsel argued that the principles relating to setting aside a default Judgment were aptly set out in WATER WELLS LIMITED -VS- WILSON SAMUEL JACKSON(6 l wherein the Court held that:- (vi) Although it is usual on an application to set aside a default judgment not only to show a defence on the merits, but also to give an explanation of that default, it is the defence on the merits which is the more important point to consider. (vii) If no prejudice will be caused to a Plaintiff by allowing the Defendant to defend the claim, then, the action should be allowed to go to that. The case of FANNY MULIANGO AND SAMSON MULIANGO - VS- NAMDOU MAGASA AND MURUJA TRANSPORT AND J5 FARMING COMPANY LIMITED (7) was cited where the foregoing principles were reiterated; it was held inter alia:- "Where there is a defence to an action, it is preferable that a case should go for trial rather than be prevented from so doing by procedural irregularities." The Court was referred to paragraph 11 of the Appellants' affidavit where a defence and counter-claim is exhibited as "GFRS" and will note that the learned trial Judge did not give the Appellants' an opportunity to prove the said defence and counter claim, after the Respondent's closure of their case. The Court was further referred to exhibits marked "GFRl" and "GFR2" which show the Judgment and seizure form showing an amount of K535,389,081 and self assessed amount of K2,438,581.00. Counsel submitted that the amounts involved were so huge thereby warranting an opportunity to be given to the Appellants to defend themselves. Reliance was placed on the case of STANLEY MWAMBAZI -VS- MORESTER FARMS LIMITED (2l where it was held inter alia that:- is the practice in dealing with bona fide "It interlocutory applications for Courts to allow triable issues to come to trial despite the default of the parties; where a party is in default he may be, ordered to pay costs, but it is not in the interests of justice to deny him the right to have his case heard." J6 Additionally, Mr. Chabu pointed out that in the case of CALTEX OIL ZAMBIA LIMITED -VS- TERESA TRANSPORT LIMITED 110i the Court reiterated the above long s tanding principle of law as follows:- "This litigation involved a colossal amount of money and the Defendant should have been given an opportunity to defend itself. Counsel for the Plaintiff took advantage of the absence of the Defendant and its advocate by electing to close its case and asking for judgment notwithstanding the fact that its witness had not turned up . . . . The learned trial Judge ought not to have entered judgment but should have adjourned the trial to afford the Defendant an opportunity to defend itself. For this reason, we allow the appeal, set aside the judgment and order a retrial before another Judge of the High Court at Ndola." Counsel submitted that the Court will note from paragraphs 12 to 15 of the Appellants' affidavit that the Respondents deserted the 1s t Appellant's Company from the time an injunction was granted by Judge Lewis on 17th April, 2002. Additionally, Mr. Chabu pointed out that a Consent Order (exhibited as "GFR7") was executed on 30th May, 2003 allowing the Respondents to resume work but they did not do so. It was submitted that the learned trial Judge unjustly enriched the Respondents when h e awarded them terminal benefits amounting to K535,589,081 and salary arrears up to the date of p ayment of J7 terminal benefits in terms of Section 26B of the Employment (Amendment) Act No. 15 of 1997 (see page Jl2 lines 7 to 12 of the Judgment dated 17th November, 2011) on the grounds that:- "(i) The 1st Appellant did not terminate the Respondents' employment by redundancy to enable Section 268 of the Employment Act to come into play. (ii) The Respondents did not render services for the said period as they disregarded the Consent Order allowing them to resume work by deserting employment." Counsel contended that they are fortified in the foregoing submission by the case of KITWE CITY COUNCIL -VS- WILLIAM NG'UNI(8l where the Court said as follows:- "We are, therefore, dismayed by the Order to award "terminal benefits equivalent to retirement benefits," the Plaintiff would have earned if he had reached retirement age had he not been constructively issue of constructive dismissed. Apart from the dismissal, which we have already dealt with, we have said in several of our decisions that you cannot award a salary or pension benefits, for that matter, for a period not worked for because such an award has not been earned and might be properly termed as unjust enrichment." Mr. Cha bu argued that as deposed under paragraph 16 of the affidavit, the Respondents' Conditions of Service were never varied and did not provide for early retirement. Counsel submitted that the Respondents ought not to have been put on early retirement by virtue of Judge Lewis injunction. According to JS Mr. Chabu this is affirmed by the case of PETER NG'ANDWE AND OTHERS -VS- ZAMOX LIMITED AND ZAMBIA PRIVATISATION AGENCY(9l where the Court held as follows:- "In the Mike Kabwe's case, the Appellant was given his terminal benefits. The dispute was only on the applicable salary. We held in that case that if an employeR varies the basic conditions of employment without the consent of the employee, then the contract of employment terminates and the employee is deemed to have been declared redundant on the dates of such variation and must get a redundancy payment. If the conditions of payment provide for early retirement and not redundancy, then the employee should be deemed to be placed on early retirement." Concerning the reasons for non attendance at trial, Counsel submitted that the non attendance at trial by the Appellants was not deliberate as can be noted from paragraphs 6 to 10 of the Affidavit in Support hereof. Mr. Chabu contended that it was therefore incumbent upon the trial Judge to adjourn the matter after the Respondents closed their case and allow the Appellants to cross-examine the Respondents and also prove their counter-claim. Mr. Chabu submitted further that the fact that the trial Judge merely considered the defence and counter-claim without J9 calling for evidence from the Appellants to prove the defence and counter-claim clearly showed the unfairness on the Judge's part. It is the Appellants' prayer that the application herein be granted and that the Respondents be ordered to pay back into Court the money realized by bailiffs from the auction of the Appellants' goods in accordance with the case of CALTEX OIL ZAMBIA LIMITED -VS- TERESA TRANSPORT LIMITED (10l pending determination of the main appeal. The Respondents filed an Affidavit in Opposition that was sworn by Emmanuel Chitala one of the Respondents. The said affidavit showed that: at the time the matter was being heard and adjourned the Appellants' Advocate Dr. Soko was still well and practicing; from the time the matter was closed for judgment and the time the judgment was delivered, it took 5 years; the Appellants had enough time to either arrest the judgment and apply that they be heard but that they just sat and waited, despite even them having filed in a counter-claim or having a cause of action; it is the Appellants who obtained the injunction restraining the Respondents not to go to work, however, the Judge in the Court below only awarded them salary arrears up to JlO the date the injunction was confirmed despite the fact that in the injunction it so stated despite granting the injunction, the Respondents did not cease to be employees; and that from the paragraph above it clearly shows that the prospects of success in this matter are not there and they humbly applied that this Motion be dismissed with costs. Other than the Affidavit in Opposition Mr. Mazumba on behalf of the Respondents filed the Respondents' heads of arguments on which he relied. Mr. Mazumba contended that paragraph 15 of the Appellants' Affidavit in Support is not correct; and that from the outset, it will be known that the Appellants herein obtained an injunction restraining the Respondents from reporting for work and the Judge only awarded the Respondent's salary arrears up to the date the injunction was confirmed. Counsel relied on Order 59/ 13/2 Rules of the Supreme Court (131 which provides:- "An appeal does not operate as a stay on the Order appealed against, except to the extent that the Court below, or the Court of Appeal otherwise directs. It follows that service of Notice of Appeal and setting down the appeal does not, by itself, have any effect on the right of the successful party to act on the decision in his favour and to enforce the Order of the Court below. If an Appellant wishes to have a Stay of Execution, he must make express application for one. Jll Neither the Court below nor the Court of Appeal will grant a stay 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 and locking up funds to which prima facie he is entitled', pending an appeal. The question whether or not to order a Stay is entirely in the discretion of the Court." Mr. Mazumba contended that if the Stay sought by the Appellants is granted, it will have the effect of depriving the Respondents from enjoying the fruits of the Judgment. Counsel argued that this is because the Appellant Company has sold most of the company property and n ow wishes to render this matter academic by asking for this Stay as it may well lead to the Appellants selling off what is left of the company property. Mr. Mazumba submitted that it should be noted that an appeal does not automatically operate as a Stay. Counsel relied on the provisions of Order 59/13/2 of Supreme Court Rules. (lO) It was argued that the Appellants cannot expect this Court to indulge them with a Stay merely by virtue of their appeal. The case of SONNY PAUL MULENGA, VISMER MULENGA AND CHAINAMA HOTELS LIMITED -VS- INVESTRUST J12 MERCHANT BANK LIMITED (1l was cited where the Court held that:- "It is pointless to ask for a Stay solely because an appeal has been entered." Further Order 59/ 13/2 Supreme Court Rules (13) which provides that:- "A Stay is one which is granted at the Court's discretion." Mr. Mazumba noted that this principle was reaffirmed in the case of NDOLA CITY COUNCIL -VS- CHARLES MWANSA. (11l Counsel submitted that the rationale for the principle above appears to be that the Court ought to look at the particular set of facts before them to help them decide whether the case is meritorious enough to warrant the Order of a Stay or not. It was contended that in the case at hand there is no merit in the Appellants' case to warrant a stay and that it is merely a delaying tactic by the Appellants. The case of ZAMSEED -VS- LUPUNGA (SJ was cited where Ngulube, CJ held that, dilatory conduct in applying for a stay may be a vitiating factor as it will be an indicating factor that Jl3 there is no irreparable damage and also that the Applicant slept on his rights. The Court went on to add that:- "The sequence of events in this case established the fact that the Appellants, by initially seeking Ex-parte Orders of Stay both in the Court below and this Court, conducted themselves with ease and without any urgency that would suggest that the Appellants were likely to suffer loss of which damages would not be an adequate remedy. I must emphasize that it is not enough to seek a Stay of Execution of Judgment on the basis that the appeal is likely to succeed." On the basis of the foregoing arguments, Mr. Mazumba humbly sought the indulgence of the Court to dismiss the Motion for a stay sought by the Appellants as it is not evident that damages will be an inadequate remedy should the appeal not succeed. Counsel finally submitted that most importantly the granting of this stay will have the effect of depriving the Respondents of the fruits of the Judgment in issue. We have considered the Affidavits in Support and in Opposition; the heads of arguments; and indeed the Ruling of the Single Judge and the Judgment sought to be stayed. Jl4 It is trite that a Stay of Execution can only be granted where there are sufficient grounds; where there are good prospects of success of the appeal; at the discretion of the Court; and where the Judgment sought to be stayed has not yet been executed. The Appellants have argued that they have a defence which is meritorious; as such the prospects of their appeal is high. A perusal of the material before the Court which, include the Judgment sought to be stayed and the Ruling of the Single Judge of this Court has however, revealed that, the Appellants filed a defence and a counter-claim which the trial Court considered in the Judgment sought to be stayed. Further, from the material before the Court, it is clear that the Judgment sought to be stayed was not obtained in default of a defence but after a trial which took place after numerous adjournments due to the Appellants' failure to attend. In the circumstances, we do not see the prospects of the appeal and sufficient grounds to justify any delay in the Respondents' enjoyment of the fruits of the Judgment. JlS From the facts as disclosed in the Affidavit in Support of the Motion, paragraphs 3 and 4 and exhibit "GFR3", it is evident that the Judgment sought to be stayed has since been executed. Finally, from the facts as disclosed the Appellants have not come to Court with clean hands; they failed to attend trial in the Court below despite the trial being adjourned on several occas10ns. In the light of the foregoing, we cannot fault the Single Judge of this Court for deciding as he did and we find no merit in the Motion. It is accordingly, refused. The Appellants to bear the costs of the Motion which will be subject to taxation in default of agreement. ~ ,~ _._ .. ,._.__.__.._ · am bwa, SUPREME COURT JUDGE .,,. ~~ { , , -·:!!· ~~~··· ··· ···· ·· ··· ····· M. E. Wanki, ~ SUPREME COURT JUDGE. E. N. C. Muyovwe, SUPREME COURT JUDGE. J16 We :E:.t:::.: