Goldman Insurance Ltd v Indo Bank Ltd (Appeal 35 of 2006) [2008] ZMSC 146 (13 June 2008)

IN THE SUPREME COURT OF ZAMBIA Appeal No. 35/2006 HOLDEN AT LUSAKA/NDOLA (Civil Jurisdiction) BETWEEN: GOLDMAN INSURANCE LIMITED Appellant AND INDO BANK LIMITED Respondent Coram: Chirwa, Chitengi and Silomba, JSS on 24th July, 2007 and 13th June, 2008 For the Appellant : Mr. N. K. Mutuna of Messrs NKM 8s Associates For the Respondent: Hon. S. Sikota of Messrs Central Chambers JUDGMENT Chitengi, JS, delivered the Judgment of the Court Case referred to: - 1. Attorney-General V Marcus Kampamba Achiume (1883) ZR1 In this judgment we shall refer to the Appellant as the Plaintiff and the Respondent as second Defendant. The facts of this case can be briefly stated. The Plaintiff commenced an action in the High Court against the second Defendant and Zambia Revenue Authority and Finance Bank Limited who were the first and third Defendants respectively. From the papers on file it is not clear what this action was all about. Be that as it may, the Plaintiff, on 17th March, 2005, wholly discontinued the action against the 2nd and 3rd - J2 - Defendants. On 18th April, the second Defendant took out an ex parte summons for costs pursuant to Order 62/5/3 RSC 1997 Edition. The order is the same in the KSC 1999 Edition which the Court has. On 7th July, 2005 the learned trial Judge granted costs to the second Defendant incurred up to 17th March, 2005 to be agreed upon and in default to be taxed. On 14th July, the Plaintiff took out a summons under Order 35 Rule 5 of the High Court Rules Chapter 27 of the Laws of Zambia to set aside the order for costs. Counsel for the Plaintiff swore an Affidavit in support of the application in which he stated that he was not served with the process relating to application for costs, resulting in the Plaintiff not being heard. Further, counsel for Plaintiff stated that it was agreed with counsel for the 2nd and 3rd Defendants that the discontinuance of the action against the second and third Defendants was purely on an ex curia basis and the Plaintiff would not be liable to pay costs. The insistence on costs by the second Defendant was, therefore, a surprise to counsel for Plaintiff. Counsel for the second Defendant swore an affidavit in opposition to the application to set aside the order for costs. In his affidavit counsel for second Defendant denied attending a meeting with counsel for the Plaintiff and third Defendant before the notice of discontinuance at which it was agreed that the second Defendant would forgo costs. He in fact learned of the notice of discontinuance on 31st March, 2005 and on 12th April, 2005 he wrote counsel for Plaintiff claiming costs. After the claim for costs a meeting was held with counsel for Plaintiff at which counsel for Plaintiff proposed the non payment of costs, a proposal which the second Defendant’s lawyers rejected. - J3 - The learned trial Judge heard the application on 14th September 2005 and delivered his Ruling on 5th October, 2005. The learned trial Judge decided this matter on the basis of Order 17 Rules 1 and 2 of the High Court Rules Chapter 27 of the Laws of Zambia. Although Order 62/5/3 RSC was cited and argued upon by counsel, the learned trial Judge appears to have had nothing to do with Order 62/5/3 RSC. We think he was right. We can only go to Orders in the RSC when there is a lacuna in our own laws. In this case there is Order 17 of the High Court Rules which deals with costs after discontinuance. After considering the affidavit evidence and arguments by counsel the learned trial Judge refused to set aside the order as to costs and held that in terms of Order 17 Rules 1 and 2 the application for costs was properly before him; and that since the notice of discontinuance is silent on costs and there being no consent order as to costs on filing the notice of discontinuance, he would do nothing but to order that the Plaintiff pays costs up to the time the notice of discontinuance was received by second Defendant. The learned trial Judge was diplomatic. In a round about and polite way he was saying that he did not believe the version given by counsel for Plaintiff. Dissatisfied with the learned trial Judge’s ruling the Plaintiff now appeals to this court. The Plaintiff advanced one ground of appeal which is that the court below erred in failing to take into consideration the matters raised by the Plaintiff in its application for review of the ex parte order for costs which matters indicated that the parties had agreed on the Plaintiff withdrawing the case against the second Defendant and another and as such the said withdrawal should not have attracted costs. - J4 - Counsel filed detailed written heads of argument which they augmented with brief oral submissions. In his written heads of argument, Mr. Mutuna, learned counsel for the Plaintiff, reproduced the facts and history of the matter as revealed by the facts we have already recited and as stated in the affidavits on which the parties relied. Mr. Mutuna then referred to Order 62 of the RSC, to the extent it is relevant to this case, and argued that in terms of this order the learned trial Judge should have exercised his discretion not to grant costs to the second Defendant. We are constrained to say that we find it startling that counsel argued this appeal dwelling on Order 62 RSC and completely and deliberately ignoring our own Order 17 of the High Court Rules on which the learned trial Judge decided the application before him. In his written heads of argument, Hon. Sikota, learned counsel for the second Defendant, submitted that in terms of Order 17/1 of the High Court Rules the second Defendant was entitled to apply ex parte for an order of costs incurred before receipt of notice of discontinuance. It was Hon. Sikota’s submission that there was no requirement for the Plaintiff to be heard in this case as the costs accrue to the second Defendant as a matter of right. Hon. Sikota then made submissions on Order 62 RSC. But on account of the view we take of this appeal it is not necessary for us to restate the arguments on Order 62 RSC, just as we have done in the case of the submissions by Mr. Mutuna. On the alleged agreement not to pay costs, Hon. Sikota submitted that the learned trial Judge dealt with the issue and found that there was nothing warranting denial of costs to the second Defendant. It was - J5 - Hon. Sikota’s submission that the learned trial Judge properly exercised his discretion when he decided that there were no circumstances warranting denial of costs to the second Defendant. Further, Hon. Sikota submitted that this court cannot interfere with the learned trial Judge’s exercise of discretionary powers unless the Plaintiff satisfies the court that the learned trial Judge was wrong. As authority for this statement; Hon. Sikota cited an English case the citation of which (1914) 2 ALLER) does exist. However, the passage quoted from that case states the grounds on which an appellate court may interfere with findings of fact by a trial court. These are matters we have laid down in cases like Attorney-General V Marcus Kampamba AchiumeW. Hon. Sikota’s oral submissions are an emphasis of his written heads of argument and it is not necessary to restate them. In his reply, Mr. Mutuna, relying on Order 62 RSC, submitted that, given the evidence, this was a proper case for the learned trial Judge to depart from the practice of awarding costs. We have considered the affidavit evidence that was before the learned trial Judge, the submissions of counsel and the Ruling appealed against. Mr. Mutuna, learned counsel for the Plaintiff argued this appeal wholly on the basis of Order 62 RSC. Hon. Sikota argued the appeal partly on our Order 17 High Court Rules and partly on Order 62 RSC. As we have already stated the learned trial Judge determined this case on the basis of our Order 17 High Court Rules and had nothing to do with Order 62 RSC and for the reason we have already given the learned trial Judge was entitled to determine the case on the - J6 - basis of our Order 17 High Court Rules only. Mr. Mutuna has not advanced any reason why the learned Judge and us should ignore our Order 17 High Court Rules which deals with the subject matter at hand and decide the appeal on the basis of Order 62 RSC. The complaint in this appeal is that the learned trial Judge did not take into consideration the matters raised by the Plaintiff in the application for review. This is not true. As Hon. Sikota submitted the learned trial Judge considered the affidavit evidence given by both counsel. The learned trial Judge said in his ruling that it may well be that there was an understanding that the notice of discontinuance would not result in the Plaintiff paying costs but that the filed notice of discontinuance did not contain the understanding alleged by Mr. Mutuna, counsel for Plaintiff. To us these comments by the learned trial Judge indicate that the learned trial Judge was cautious that he was dealing with evidence given by counsel and had, for obvious reason, to choose what words and expressions to use. To his credit, the learned trial Judge was diplomatic as he should be when dealing with witnesses who are members of the Bar and officers of the Court because it is improper for a Judge to say things in Open Court which may tend to disparage an advocate. In a round about and polite way, the learned trial Judge was saying that counsel for Plaintiff did not tell the truth and that he did not believe his version of the story about the alleged agreement not to claim costs after the Plaintiff had filed a notice of discontinuance. We cannot fault the learned trial Judge on his findings based on credibility and none of the factors laid down in the Achiume easel1) upon which we can interfere with a trial Judge’s findings of fact exist in this case. - J7 - The issue in this appeal is, therefore, one of law and this is whether Order 17 Rules 1 and 2 of our High Court Rules was properly applied by the learned trial Judge. The relevant rule is Rule 1. We reproduce the rule in its entirety. “ORDER XVII DISCONTINUANCE OF SUITS 1. If, before the date fixed for the hearing, the Plaintiff desires to discontinue any suit against all or any of the Defendants, or to withdraw any part of his alleged claim, he shall give notice in writing of discontinuance or withdraw to the Registrar and to every defendant as to whom he desires to discontinue or withdraw. After the receipt of such notice, such defendant shall not be entitled to any further costs, with respect to the matter so discontinued or withdrawn, than those incurred up to the receipt of such notice, unless the Court or a Judge shall otherwise order; and such defendant may apply ex parte for an order against the Plaintiff for the costs incurred before the receipt of such notice and of attending a Court or a Judge to obtain the order. Such discontinuance or withdrawal shall not be a defence to any subsequent suit. If, in any other case, the Plaintiff desires to discontinue any suit or to withdraw any part of his alleged claim, or if a Defendant desires to discontinue or withdraw his counter- claim or any part thereof, such discontinuance or withdrawal may, in the discretion of the Court or a Judge, be allowed on such terms as to costs and as to any subsequent suit and otherwise as to the Court or a Judge may seem just. ” - J8 - A proper construction of Rule 1 leaves it beyond dispute that an application for an order for costs where the Plaintiff discontinuances an action is made ex parte and that the Plaintiff has no right to be heard when the Court is making an order for costs in favour of a Defendant. Indeed, in the absence of an agreement to the contrary, we do not see how a Plaintiff who has dragged a Defendant to court but later discontinues the action can escape the liability for paying the costs incurred by the Defendant up to the time the Defendant is notified by the Plaintiff that the action has been discontinued. In our view, the only right that the Plaintiff has is to challenge the quantum of the costs and to attend the taxation of the costs in the absence of agreement. In the event, we are satisfied that the learned trial Judge correctly applied Order 17 of our High Court Rules and we cannot fault his ruling granting the second Defendant costs. We find no merit in this appeal and we dismiss it with costs to the second Defendant to be agreed upon and in default to be taxed. ......... K.................... D. K. CHIRWA SUPREME COURT JUDGE . . . . . . M..................... ■ PETER CHITENGI SUPREME COURT JUDGE S. S. SILOMBA SUPREME COURT JUDGE