Finance Bank Zambia Plc v Daniele Ventriglia and Valerio Ventriglia (Appeal No. 153/2022) [2023] ZMCA 343 (24 November 2023)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) Appeal No. 153/2022 BETWEEN: FINANCE BANK ZAMBIA LIMITED-~l~•.<JJ::·,,,f i . Ycov"' uF ,..,..,.t."Z-- APPELLANT AND DANIELE VENTRIGLIA ;:,,_ -~-.'t,..t..-•·~ 2 i NOV tU.:,J # ► d _ _____ . . , , . C!'✓IL REGl~l iW 1 ESPONDENT VALERIO VENTRIGLIA 2ND RESPONDENT CORAM: Makungu, Chishimba and Muzenga, JJA 17th November 2023 and 24th November, 2023. For the Appellant: Simeza, Sangwa & Associates v For the Respondent: Malambo and Company JUDGMENT MUZENGA JA, delivered the Judgment of the Court. Cases ref erred to: 1. Development Bank of Zambia and Another v. Sunvst Limited and Sun Pharmaceuticals Limited {1995 - 97) ZR 187 2. Kelvin Hang'andu and Company {A Firm) v. Wehby Mulubisha {2008) ZR 82 3. African Banking Corporation v. Mubende Country Lodge Limited - SCZ Appeal No. 116 of 2016 J2 4. Mukumbuta Mukumbuta and Others v. Nkwilimba Choobana and Others- SCZ Judgment No. 8 of 2003 5. Amaphat Mauritius Limited and Others v. Zimbabwe Mining Development Corporation - SCZ Appeal No. 208 of 2014 6. B. P. Zambia PLC v. Interland Motors Limited (2001) ZR 37 7. Pulse Financial Services Limited (T / A Enterprises Financial Centre "EFC") v. Elaine Munga, Justine Mpundu and Ernest Phiri, Appeal No. 133/2019 8. BP Zambia Pie v. Expandito Chipasha and 235 Others, Selected Judgment No. 57 of 2015 9. Midlands Breweries PVT Limited v. national breweries Pie, SCZ Appeal No. 181 of 2015 1.0 INTRODUCTION 1.1 This is an appeal against a Ruling by Musona, J dismissing the cause for abuse of court process. 2.0 BACKGROUND 2.1 The background to this matter is that the appellant commenced a matter against the respondents in the court below by way of writ of summons in the year 2011 seeking the following reliefs under Cause No. 2011/HPC/0671: (a) The money lent to Ital Terrazzo Limited and guaranteed by the defendants which as at 30th J3 September, 2011, stood at USD7,274,076.06 with respect to account No. 0010301880014, ZMK92,225,046.87 with respect to account No. 0010301880006 and ZMK3,842,238,626.31 with respect to account No. 0024437900005. 2.2 Prior to this action, the appellant was sued by Ital Terrazo Limited in the year 2009 under Cause No. 2009/ HP/ 0381, alleging fraud among allegations and claiming mainly a refund for having over paid the appellant when it was repaying a loan it obtained. 2.3 On 22nd July 2021, the respondents took out summons to dismiss the appellant's cause under Cause No. 2011/HPC/0671 for abuse of court process and in the alternative, to consolidate the two causes. 3.0 DECISION OF THE COURT BELOW 3.1 The trial court considered the respondents' application and found that the cause which was commenced by the appellant under the commercial list (2011/HPC/0671) amounted to abuse of court process since there was a prior suit in which the appellant was sued in the general list under cause 2009/HP/0381, which the appellant was aware of. J4 3.2 The court below held the view that there was no need to commence another matter as the appellant could have simply put forward a counter claim in the cause under the general list. 3.3 The court below went further to dismiss the cause under 2011/HPC/0671 and held the view that having dismissed this cause, there exists no cause to consolidate. 4.0 GROUND OF APPEAL 4.1 Unhappy with the decision of the court below, the appellant appeals to this court on the following ground: 1. The court below erred in law and in fact when it dismissed the action in Cause No. 2011/HPC/0671 on the basis that it amounted to an abuse of the process of court. 5.0 APPELLANT'S ARGUMENTS 5.1 In support of the lone ground of appeal, learned counsel for the appellant, in reliance on the case of Development Bank of Zambia and Another v. Sunvst Limited and Sun Pharmaceuticals Limited 1 , submitted that courts disapprove the commencement of a multiplicity of proceedings and procedures over the same subject JS matter and that the law set down is that a party must not commence several actions over the same subject matter. 5.2 Learned counsel referred us to a number of authorities including the cases of Kelvin Hang'andu and Company (A Firm) v. Wehby Mulubisha2 and African Banking Corporation v. Mubende Country Lodge Limited3 , in submitting that there was no multiplicity of actions in casu as the parties to the two actions are different and the subject matters are not the same, learned counsel submitted further that the appellant had not commenced two actions in any court. 5.3 It was contended that the trial court fell into error when it dismissed the appellant's cause in the circumstances. 5.4 Learned counsel went at great length to demonstrate how the subject matters in the two causes were different by making reference to the respective claims in the statements of claim. Counsel prayed that the appeal be allowed. 5.5 It has been argued in the alternative that since the trial court took the view that the case before it arose from the same facts and transaction, he should have consolidated the matters and not dismissed the action. Reliance was placed on the case of Mukumbuta Mukumbuta and Others v. Nkwilimba Choobana and Others4 and the case of Amaphat Mauritius Limited and Others v. Zimbabwe Mining J6 Development Corporation. 5 5.6 Counsel prayed that the appeal be allowed. 6.0 RESPONDENT'S ARGUMENTS 6.1 Learned counsel for the Respondents submitted that the respondents were sued as a result of them being guarantors to the amount the appellant (Finance Bank Zambia Limited) advanced to Ital Terrazo Limited. It was counsel's contention that is was the same amount litigated under cause No. 2009/HP/0381, where Ital Terrazo Limited is saying they paid off and in fact overpaid, hence claiming for a refund. It was learned counsel's submission that the subject matter in cause No. 2009/HP/0381 and 2011/HPC/0672 is the same. 6.2 It was counsel's submission that the respondents were sued as guarantors, whose liability is dependent on default by the principal debtor. Reliance on this argument was placed on the case of Pulse Financial Services Limited (T / A Enterprises Financial Centre "EFC") v. Elaine Munga, Justine Mpundu and Ernest Phiri6 . It was contended that the appellant was aware of the cause under 2009/HP/00381 where the issue of the amount due or not due was being litigated, and that if the court finds that the appellant was paid in full, the cause against the respondents would fall off. Learned counsel contended that there is a possibility of conflicting decisions, which could cause embarrassment to the administration of justice. 6.3 We were referred to a number of authorities including the case of B. P. Zambia Pie v. Interland Motors Limited7 , where the Supreme Court stated that: "For our part, we are satisfied that, as a general rule, it will be regarded as an abuse of process if the same parties re-litigate the same subject matter from one action to another or from judge to judge .......... In terms of the section and in conformity with the court's inherent power to prevent abuses of its processes, a party in dispute with another over a particular subject should not be allowed to deploy his grievances piecemeal in scattered litigation and keep on hauling the same opponent over the same matter before various courts". 6.4 It was learned counsel's contention that commencing the within action in the light of a matter which was already subsisting was abuse of court process when all issues could have been raised in the earlier matter. 6.5 It was also argued, in respect of the alternative argument by the appellant that the two matters should have been consolidated if the J8 court felt that the subject matter was the same, that there is no ground of appeal in that regard. Counsel submitted that the refusal by the court below to consolidate the matter was not appealed against and as such the argument cannot be considered by the court. For this argument we were referred to a few cases among them the case of BP Zambia Pie v. Expandito Chipasha and 235 Others8 where the Supreme Court stated that: "With regard to the contention by counsel for the respondents that the respondents are entitled to compound interest, we have failed to comprehend why counsel is still insisting on the respondents' entitlement to compound interest. The learned trial judge held, in very clear terms, that the respondent had failed to prove that compound interest was due to them. The respondent did not appeal against that portion of the learned trial judge's decision and they cannot be heard to raise it now before this court. 6.6 We were urged to dismiss the appeal for want of merit. 7.0 APPELLANT'S ARGUMENTS IN REPLY 7.1 The gist of counsel's argument in reply is that the appellant's guarantee was not a conditional guarantee but a guarantee on demand, as disclosed in the statement of claim. We were referred to the learned J9 authors of Chitty on Contracts, London: Sweet and Maxwell, 1999 under Paragraph 37-115, where they explain the categories of bonds and guarantees as follows: "Performance bonds may be considered as falling into one of two categories. Conditional performance bonds exist where the guarantor only becomes liable to the party entitled to claim the bonded sum (the beneficiary), on proof of breach of the terms of the underlying building contract, or on proof of both breach and loss as a result of the breach. Unconditional or (more usually) "on demand" bonds exist where, on true construction of the words used in the bond, the guarantor is liable to pay the beneficiary the bonded sum when the demand is made in the manner provided for in the bond, without the need for the beneficiary to prove breach of the underlining building contract or damage ( or both). It is a question of construction in each case whether a bond, taken as a whole, is conditional or on demand and on the former case, the nature of the conditions attaching to the bond will also be a matter of the construction of the often complex archaic". 7.2 It was counsel's submission that in conditional guarantees, the liability of a guarantor only becomes an issue if a particular condition is failed to be met by the principal debtor. For unconditional guarantees, the JlO guarantor becomes liable on demand. It was submitted that the appellant only made the demand in 2013, on the 13th October. 7 .3 Counsel submitted that the cause of action arose when the demand was made in 2013 and as such, they could not amend their defence to include a counterclaim in the cause which was commenced in 2009 when the cause of action had not arisen. 7.4 Counsel argued further that an amendment to its already filed defence in the 2009 matter was not possible as Order 20 Rule 5 of the Rules of the Supreme Court of England, 1965 prevents a defendant from amending a defence to include a counterclaim regarding the cause of action that may arise against the plaintiff or third parties. Reliance for this argument was also placed on the case of Midlands Breweries PVT Limited v. national breweries Plc9 . Counsel consequently submitted that that was the reason why they could not amend the defence in the 2009 matter to include a counterclaim. 7.5 In respect of their alternative argument for consolidation, counsel submitted that this is covered in the ground of appeal. Learned counsel reiterated their prayer. 8.0 THE HEARING Jll 8.1 At the hearing of the appeal, learned counsel for the appellant, Mr. Nkunika informed the court that he would rely on his filed arguments. Learned counsel for the respondent, Mr. Sianondo equally informed the court that he was placing reliance on his filed arguments and briefly augmented. 9.0 DECISION OF THE COURT 9.1 We have carefully considered the evidence on the record, the Ruling under attack and the arguments by the parties. 9.2 The law relating to multiplicity of actions and abuse of court process is well settled in our jurisdiction and aptly argued by the parties. 9.3 The Supreme Court in the case of B. P. Zambia PLC v. Interland Motors Limited6 held inter alia that: (iv) A party in dispute with another over a particular subject should not be allowed to deploy his grievances piecemeal in scattered litigation and keep on hauling the same matter before various courts. (v) The administration of justice would be brought into disrepute if a party managed to get conflicting decisions which undermined each other from two or J12 more different judges over the same subject matter. 9.4 It is clear that parties must not litigate in piecemeal or have matters dotted around various courts. This is in order to preserve the integrity of the judicial system by avoiding a possibility of conflicting decisions on the same subject. Parties are therefore expected to raise all their issues in one cause, as doing so will save the scarce judicial time. 9.5 In the first cause, the appellant was sued by Ital Terrazo Limited (in receivership) together with its receiver under Cause No. 2009/HP/0381 alleging among other things fraud and claiming among other claims setting aside a mortgage debenture deed for fraud and a refund of the sum of USD$3,389,166.00 being the amount it overpaid the appellant in respect of the loan it obtained. 9.6 In the second case, the appellant sued the respondents in their capacities as guarantors of the money lent to Ital Terrazo Limited under Cause No. 2011/HPC/0671. 9.7 Learned counsel for the appellant has argued that the appellant is not the one who commenced the first cause and as such cannot be said to have abused court process by commencing the within cause. We must state that this is not the only consideration. In appropriate causes, it J13 may amount to abuse of court process, notwithstanding that the matter was commenced by another party. This may happen when the parties are the same, the subject matter is the same, yet instead of raising a counter claim, a party sued decides to sue the same party on the same subject. 9.8 In cas~ the parties are different in both causes and the cause of action or claims are different. In our considered view, therefore, this could not amount to abuse of court process. 9.9 In any event, we agree with learned counsel for the respondent that the cause of action in casu arose in 2011 and a defence in the 2009 matter was already entered and a counterclaim could not have been entered in the light of the decision in the Midlands Breweries case supra. We also agree that according to the statement of claim, the guarantee undertaken by the appellants was an unconditional one, where the guarantor is liable on demand. It is not therefore dependent on default by the principal borrower. 9.10 Whether or not the appellant was rightly entitled to assert the claim on demand from guarantors is an issue for determination in the cause. We therefore find that the causes of action are different, because in casu, the appellant is pursuing the guarantors on the basis of the J14 unconditional guarantee. 9.11 We consequently find merit in the appeal and allow it. We find it unnecessary to consider the arguments relating to consolidation of causes because of the position we have taken. 10.0 CONCLUSION 10.1 Having allowed the appeal, we set aside the Ruling of the court below dismissing the matter for abuse of court process. We order that the matter be sent back to the High Court for trial. 10.2 Costs will be in the cause. ··· ········ ~ ······· ··· · C. K. MAKUNGU COURT OF APPEAL JUDGE ....................................... ::I:. .... F. M. CHISHIMBA COURT OF APPEAL JUDGE ·········~ ················ K. MUZENGA COURT OF APPEAL JUDGE