Investrust Bank Plv v AFE Limited (CAZ/08/93/ 2022) [2022] ZMCA 139 (6 September 2022)

IN THE COURT OF APPEAL FOR ZAMBIA AT THE LUSAKA DISTRICT REGISTRY HOLDEN AT LUSAKA ( Civil Jurisdiction) CAZ/08/93 / 2022 BETWEEN: INVESTRUST BANK PLC AND AFE LIMITED Coram: Hon. Lady Justice N . A Sharpe-Phiri in Chambers on 6 th September 2022 For the Applicant: Ms. M. Chibomba of Messrs Jonah Sitimela For the Respondent: Mr. E. Zimba of Messrs Kate Weston Legal & Partners Practitioners Extempore Ruling Cases referred to: 1. Kalusha Bwalya V Chardore Properties Limited Ian Chamunora Nyalungwe Harupe ri (2012) Vol. 1 ZR 340 Legislation re ferred to: 1. Court of Appeal Rules, Statutory Instrument No. 65 of 2016 2. Rules of the Supreme Court (White Book) 1999 Edition This is an application brought by the applicant on 4 th August 2022 for an order to stay of third-party proceedings in the High Court pending determination of appeal in the Court of Appeal against the ruling of a lower Court of 3 rd March 2022. Rl The application was brought pursuant to Order X Rule 5 of the Court of Appeal Rules. It is supported by an affidavit of one Mutinta Marvis Chibomba an Advocate of the Superior Courts seized with conduct of the matter on behalf of the applicant. She deposes that there are third-party proceedings in the lower Court which the applicant had tried to halt pending the payment of costs, but in a ruling of 3 rd March 2022, the Honourable Mbewe, J declined to strike out or set aside the third-party proceedings in the lower Court. Being dissatisfied with the said ruling of that Court, the applicant lodged a Notice of Appeal and Memorandum of Appeal to this Court on 15th March 2022, which is pending determination. That notwithstanding, the applicant now seeks from a single Judge of this Court an order to stay the third-party proceedings in the Court below. The gist of the application being that the applicant has an appeal pending before this Court in relation to the third-party proceedings and allowing the proceedings to continue in the Court below, when an appeal is pending determination, will render the appeal a mere academic exercise. The applicant contends that the appeal has reasonable prospects of success and therefore that there are sufficient grounds meriting the suspension of the third-party proceedings in the lower Court. R2 The respondent filed an affidavit and skeleton arguments on 2 September 2022 which was sworn by its Operations Manager, Emmanuel Mubanga. He contended that the matter herein arises out of events carried by the applicant against the respondent under Cause number 2016/HPC/0273. He contended that the applicant issued a Writ of Possession on Stand Number 7862 which belonged to the respondent without notifying the foreclosure to either the respondent or the lessee with a valid tenancy agreement. Consequently, the lessee sued the respondent under cause number 2020/HPC/0237 following the said eviction from the property by the applicant. Following institution of those proceedings, the respondent applied to enjoin the applicant as third party to the said proceedings and by a Ruling of 3rd March 2022 in the Court below, the applicant was enjoined as a third party to the said proceedings so as to be able to indemnify the respondent or make contributions should it be determined that the respondent is liable to the lessee for the eviction. The respondent contended that is the said third party proceedings in the Court below are stayed, it will affect the respondent in seeking relief from the applicant when it was the applicant that caused the eviction of the lessee from the subject property. It was further con tended that the third party proceedings in the court below have no bearing or effect on the appeal lodge by the applicant and that staying the same shall negatively impact on the respondent's rights to be indemnified by the applicant. He added that the applicant has equally not shown sufficient reasons as to how the third party proceedings shall make the appeal a mere R3 academic exercise if allowed to proceed adding that it was wrong for the applicant to seek the stay of third party proceedings when the main matter has not yet been adjudicated upon to establish liability on the part of the respondent. The matter was scheduled for hearing of the application on 6 th September 2022. On the said date, both respective parties were represented by Counsel. Counsel for the applicant relied on the affidavit in support and the Skeleton Arguments both filed on 4 th August 2022. The respondent's counsel relied on the affidavit in opposition and skeleton arguments filed on 2nd September 2022. I have carefully considered the affidavit evidence and the arguments by the respective parti~s. The issue for consideration by this Court is whether to grant a stay of third-party proceedings in the High Court pending determination of the appeal in this Court. The application has been brought pursuant to Order X Rule 5 of the Court of Appeal Rules. It provides that: 'An appeal shall not operate as a stay of execution or of proceedings under the judgment appealed against unless the High Court, quasi-judicial body or the Court so orders and no intermediate act or proceedings shall be invalidated, except so Jar as the Court may direct.' R4 As Counsel for the applicant highlighted, the above provision is instructive on a Court's power to make orders to stay proceedings where a party has appealed to the Court of Appeal as an appeal does not operate as an automatic a stay of execution or of proceedings but lies entirely in the discretion of the Court. Therefore, the question for our consideration is whether the applicant has demonstrated any good and compelling reasons to grant a stay of proceedings. The brief background of the matter as laid out by the lower Court in the ruling of 30th June 2022 is that on 20th January 2021 , one James Mataliro, a plaintiff commenced an action against Afe Limited (the respondent herein) as defendant in that action. By consent of the two parties, the applicant herein, lnvestrust Bank Plc was joined to the proceedings as 2 nd defendant. The applicant took out summons for misjoinder and in a ruling of 5th March 2021, the Court ordered that the applicant as 2 nd defendant therein be struck out of the proceedings. The plaintiff and the 1st defendant were condemned to bear the 2 n d defendant's costs. The defendant subsequently sought leave of the lower Court to file third-party notice against the applicant and by order of 30th November 2021, the order was granted. The applicant herein then sought to have the third-party proceedings set aside or struck out pending the payment of its costs, which application was declined by ruling of 3 rd March 2022. RS Being aggrieved by this decision, the applicant has lodged an appeal to this Court against the lower Court's ruling refusing to strike out the third-party proceedings. The applicant also brought an application before the lower Court for a stay of the third-party proceedings pending determination of the appeal before this Court, which application was declined by the learned Judge on 30th June 2022. It is against this background that the applicant now renews the application for an order for stay of the third-party proceedings in the High Court pending the appeal before the Court of Appeal. The gist of the applicant's contention is that its appeal lodged on 15th March 2022 against the ruling of the lower Court of 3 rd March 2022 has reasonable prospects of success and that it would be rendered nugatory if the third-party proceedings in the Court below are not stayed. However, without delving into the merits of the appeal, a review of the grounds of appeal in the memorandum of appeal dated 15 March 2022 shows that applicant is challenging the prospects of a cause of action against it by the respondent should the respondent be found liable in proceedings cause number 2020/HPC/0237 and that the Court below failed to judiciously exercise its discretion to order a stay of third party proceedings pending payment of costs by the respondent. RG From the foregoing, two issues arise, which are; firstly, whether the respondent has sufficient ground for establishing a cause of action against the applicant in third party proceedings under cause number 2020/ HPC/0237, and secondly, whether the court below was on firm ground in refusing to exercise its discretion to grant an order for stay of third party proceedings pending payment of costs by the respondent. I will address the issue simultaneously. The High Court had occasion to deliberate on the nature of third party proceedings in the case of Kalusha Bwalya V Chardore Properties Limited Ian Chamunora Nyalungwe Haruperi where it was held that "third party proceedings for indemnity by their very nature can only be taken out by a defendant against a plaintiffs claim or a plaintiff against a defendant's counter-claim". In explaining the history of third party proceedings under Order 16 Rule 1 of the White Book, 1999 Edition, the learned authors state in part thereunder that: ... "while not expressly mentioning third party proceedings, provides for the avoidance of "multiplicity of proceedings." The rules of this Order were based on and intended to give effect to the provisions of s.39(1)(b) of J. A. 1925 (which replaced s.24(3) of J. A. 1873) which empowered the Court to grant to any defendant, "all such relief relating to or connected with the original subject of the cause or matter, claimed {by his pleading] against any R7 other person, whether already a party to the cause or matter or not, who has been duly served with notice in writing of the claim pursuant to rules of Court or any order of the Court, as might properly have been granted against that person if he had been made a defendant to a cause duly instituted by the same defendant for the like purpose." ... " It is clear from the foregoing that third party proceedings not only serve the purpose of avoiding multiplicity of actions in appropriate cases and also act as an unfettered right available to a defendant or plaintiff answerable to a counter-claim to attach any such third party who is so directly connected with the original subject of the cause or matter claimed in the pleadings before Court. The facts of this case are that the Respondent is currently facing a Court action instituted by its former lessee following an eviction that was purportedly carried out at the instigation of the applicant. It is only right and equitable that the respondent should not be fettered from exploring its right to prosecute the proceedings under 2020/HPC/0237 to its conclusion. Therefore, I am not satisfied that the applicant has demonstrated good and sufficient reasons to stay the proceedings in the lower Court. I am also not satisfied that the applicant's appeal has good prospects of success. R8 I also find no nexus between the applicant's pursuit of costs and its quest to stay third party proceedings in the Court below. I therefore find no merit in the applicant's application before this Court. I accordingly dismiss the application to stay proceedings with costs to-the respondent, to be taxed in default of agreement. Dated at Lusaka this 6 th September 2022. ~> ~ N. A. Sharpe-Phiri COURT OF APPEAL JUDGE R9