Gulam Hussain Gangat v African Banking Corporation (Z) Limited (2020/HPC/0240) [2020] ZMHC 448 (27 July 2020)

IN THE HIGH CO(JRT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jwisdiction) 2020/HPC/0240 BETWEEN: GULAM HUSSAIN GANGAT AND -: l JUL 2020 PLAINTIFF AFRICAN BANKII'liG CORPORATION (Z) LIMITED DEFENDANT Before the Honourable Mr. Justice K. Chenda on 27th July 2020 For the Plaintiff For the Def endant Mrs M. Mushipe, Mushipe & Associates Mr L. Phiri, C. Chonta Advocates RULING On Application for Stay Pending Payment of Costs Rules of Court: (i) The High Court Rules, contained in Chapter 27 of the Laws of Zambia {ii) The Rules of the Supreme Court of England 1965 contained in the White Book 1999 Edition Case Law: (iii) Martin u Earl Beuchamp {1884) 25 Ch. D. 12 (ivj James M'Cabe v The Governor and Company of the Bank. of England ( 1884) 25 Ch. D. 12 BACKGROUND 1. 1 This case was con1menced by writ of summons filed on 26th March 2020 to which the Defendant reacted with an application on 29 th April 2020 for stay of proceedings herein pending payment of costs. 1. 2 The costs were awarded in a case titled Ayub Farms Limited v African Banking Corporation Limited - 2018 /HP/ 1938 following the dismissal of that case in limine. That case will for convenience be referred to as cause 2018/HP/1938. The Plaintiff herein shall be referred as "Mr Gangat", Ayub Farms Limited as "Ayub FL" and the Defenda nt as the "Bank". 1.3 The hearing of the application was deferred to this month following the disruption of Court sittings by the outbreak of the Corona virus pandemic. 1.4 The application was supported by a primary affidavit dated 29th April 2020 accompanied by arguments of even date. 1.5 The Plaintiff's documented opposition was by affidavit dated 26th June 2020 and skeleton arguments of 2 1 s t July 2020. The Defendant exercised its right of reply wit h an affidavit on 22nd July 2020 . R2 1.6 Th is is th e reserved ruling after the hearing of 24th July 2020 at which Coun sel on both sides augmen ted their clients' positions with viva voce subm ission s. LAW ON STAY OF PROCEEDINGS PENDING PAYMENT OF COSTS OTHER THAN FOR DISCONTINUED ACTION 2. 1 English case law establishes t he principle t h at where th ere are costs ordered to be pa id in respect of an action, th en a Cou rt can order a stay of proceedings of a subsequ ent action found ed on t h e same cause of action u ntil the costs of th e earlier actio.:.-1 ;-n e settled. 2.2 A notable authority is Martin v Earl Beuchamp1 where Cotton, L. J. expressed: • "The rule is established that w here a plaintiff having fai led in one action commences a second action fo r the same matter, the second action must be stayed u ntil the costs of the first action have been p aid. "2 2.3 The said case was cited with approval by th e House of Lords in James M'Cabe v The Governor and Company of the Bank of England3 with Lord Herschell observin g inter alia as follows as he en dorsed the principle: 1 (188 4) 25 Ch . D. 12 2 Jbid ,. 15 1 (1889) 14 AC 413 R3 " ... even although the actions were not between pre cisely the same parties or persons suing in the same capacity, t he case was held to be w ithin the rule in as much a s the plaintiff there was suing substantially bv_virtue of the same alleged title."4 (Emphasis added) 2.4 Closer to home, th e High Court Rules in Order 40 Rule 8 confer the following broa d power on the subject: "Where the Court or a Judge orders cost,~ t o be paid, or secwity to be given for costs by any p arty, the Court or a Ju dge may, if it or he thinks fit, order all proce edings by or o n behalf o f that party in the same suit or proceeding, or conne cted therewith, to be stayed until the costs are paid or security given accordingly, but such order shall not supersede the use of any other lawful method of enforcing payment." (Emphasis added) 2.5 It can be distilled from the aforesaid that where a costs award in the High Court remains unsatisfied, further proceedin gs in the same suit or in a different but connected suit can be stayed pending satisfaction thereof. 4 Ibid, . 415 R 4 2.6 The above scenario should be distinguished from the costs of a discontinued action which for its part falls in the realm of Order 17 Rule 2 of the High Court Rules and Order 21 Rule 5 of the Rules of the Supreme Court of England. ANALYSIS OF THE TWO HIGH COURT CASES 3.1 I propose to analyse cause 2018/HP / 1938 and this case with the aid of a t a ble as follows - This Case: 2020/HPC/240 Cause 2018/HP/1938 Proponent Mr . Gangat Ayub FL at commencement, (see "MDD 1" in Defenda nt's primary affidavit) then Ay ub FL and Mr. Gangat as co-Plaintiffs by amended process filed on 101" June 2019 (See "MDD3" in Defendant's primary affidavit) Defendant The Bank The Bank Cause of Action Breach of contract of sale by Breach of the Contract - - the Ba nk as mortgagee in possession which contract was m ade between Ma y a nd ~July 2015 (the "Contract") Subject Ma tte r The remaining extent of No. 8 The Proper ty S/D "B" of Farm No. 196a Lusaka (the "Property") • • Reliefs c laimed Specific performance of the Specific performc:ince of the Contract , damages for breach Contract, damages for breach of of the Contract, a lternatively refund of the purchase price pa id to the Bank, inte rest and costs. t he Contract. ~!t.erna tively a refund of the purch ase price paid to the Ba nk, interest a nd costs R5 3.2 The above table illustrates that there is a coincidence of the cause of action, subject matter and reliefs sought herein with those in 2018/HP/1938. 3 .3 Further, Mr Gangat has not refuted the allegation in paragraph 6 of the Bank's primary affidavit that he and Ayub FL are closely associated by vir tue of him being a director and shareholder of the • latter. 3.4 Consequently, since: (i) the cause of action is the same (breach of the Contract); (ii) the subject matter is the same (the Property); and (iii) the proponents are closely associated; this case is for all intents and purposes a reboot of cause 2018/HP/1938, albeit with a change of focal person for redress (against the Bank over the conveyance of the Property) . CONCLUSION AND ORDERS 4.1 Where a case is terminated in limine without a hearing on the merits (but otherwise than through discontinuance) thf."n a new suit founded on the same cause of action can be stayed if there is an unsatisfied order for costs of the earlier case. • R6 4.2 It does not matter whether the parties are identical ,·,r not in the two cases as provided that: (i} the cause of action is the same; and (ii} the proponents are associated persons; then a stay of proceedings can be ordered . • • 4.3 In the case before Court the grievance against the Bank over the conveyance of the Property was defeated in limine in 2018/HP / 1938 on grounds of locus standi. 4 .4 That the affected associated persons have relaunched the case, founded on th e same cause of action but in a different division of this Court and with a change of focal person, renders the case a m enable rn the caveat of a stay of proceedings pending payment of the costs of 20 18/HP/ 1938 . 4.5 The Defendant did not pray for and the Plaintiff has not argued that this Court should consider an order for security to b e furnished by the Plaintiff instead of an outright stay. R7 4.6 The circumstances thus justify that unless and until the costs awarded in the failed case (2018/HP / 1938) have been paid to the Bank, this case as pleaded cannot be prosecuted. 4. 7 I accordingly find merit in the application and order a stay of further proceedings h erein. The stay shall subsist until: • (i) the costs awarded in cause 2018/HP/1938 are settled; and (ii) that fact is verified by affidavit evidence to the satisfaction of this Court. 4.8 I further order that the costs of this application shall be in the cause a nd that the Plaintiff has leave to appeal if so desin~::l. Dated at Lusaka this -- ----~ -- day of--------1a----------------2020 ---------- ~-------------- K. CHENDA Judge of the High Court R8