Lactalis Zambia Limited and Anor v Mukulu Dairies Limited (Appeal No. 265 of 2022) [2023] ZMCA 334 (22 November 2023)

IN THE COURT OF APPEAL FOR ZAMBIA Appeal No. 265 of 2022 HOLDEN AT NDOLA (Civi l Jurisdiction) BETWEEN : AND T APPELLANT 2 ND APPELLANT MUKULU DAIRIES LIMITED RESPONDENT CORAM : CHASHI, NGULUBE AND PATEL, JJA On 15th & 22nd November 2023 Fo r th e Appellants: M r. M. Chiteba with M r. P. Chomba M essrs. M ulenga M undashi Legal Practitioners For th e Respond ent: Mr. Y. Yosa M essrs. M ay & Co JUDGMENT Patel, JA, delivered the Judgment of the Court. Cases Referred to: 1. New Plast Industries v Commissioner of Lands and another -SCZ No. 8 of 2. Chikuta v Chipata Rural Council (1974) ZMSC 26 3. Mwambazi v Morrester Farms Limited (1977) ZR 43. 4. Jubilee Insurance Company Limited v Grace Anyona Mbinda [2016] eKLR 5. Saudi Arabian Airlines Corporation v Premium Petroleum Company Ltd [2014] eKLR 6. Job Kiloch v Nation Media Group Ltd, Salaba Agencies Ltd & Michael Riorio [2015] eKLR 7. Beck v Value Capital Limited [1976] 2 All ER 113 8. Zambia National Holding Limited and United Nations Independence Party v Attorney General (1993-1994) S. J. Z No. 22 9. John Sangwa v Sunday Bwalya Nkonde- SCZ Appeal No. 2 of 2021 10. Antonio Ventriglia and Manuela Ventriglia v Finsbury Investments Limited SCZ Appeal No. 2 of 2019 11. Elias Tembo v Florence Chiwala Salati, The Attorney General and Lusaka City Council (SCZ/8/239/206) 12. Citibank Zambia Lim ited v Suhayl Dudhia CAZ Appeal No.16 of 2020 13. Khalid Mohammed v The Attorney General (1982) Z. R. 49 14. Charles Osenten and Company v Johnson -1941 2 All ER at 24 15. Gift Luyako Chilombo v Biton Manje Hamalele -CCZ Appeal No. 2 of 2016 16. Anderson Kambela Mazoka & others v Levy Patrick Mwanawasa (2005) Z. R. 138 J2 Legislation referred to: 1. The Companies Act, No. 10 of 2017 2. The English Law Extent of Application Act, Chapter 11 of the Laws of Zambia as amended by Act No.6 of 2011 3. The Corporate Insolvency Act, No. 9 of 2017 4. The Companies (Winding Up) Rules 2004, Statutory Instrument No. 86 of 5. Practice Direction No.4 of 1977 6. The High Court (Amendment) Rules 2020, Statutory Instrument No. 58 of 7. The Rules of the Supreme Court of England 1965, (1999) Edition (White Book) Other works referred to: 1. Halsbury' s Laws of England, 4th Edition, Volume 7(2) paragraph 1407 1.0 INTRODUCTION 1.1 This is an appeal against the Ruling of Mbewe B. J, delivered on 14th July 2022 relating to a Petition filed by the Respondent against 1st & 2 nd Appellants, on the ground that the affairs of 1st Appellant, Lactalis Zambia Limited, had been conducted in a manner that is prejudicial and oppressive to the Respondent, contrary to section 134 of the Companies Act1. The appeal arises following the refusal of an application filed by the Appellants for leave to file an Answer to the Petition out of time. J3 2.0 BACKGROUND 2.1 For the purposes of this section, we will address the Parties as they were in the Court below. 2.2 On 5th August 2021, the Petitioner in the Court below, (the Respondent herein) commenced an action by way of Petition and Affidavit Verifying Facts against the 1st and 2nd Respondents as they were below, (the 1st & 2nd Appellants herein), and prayed for the following reliefs : - 1. A declaration that the 27 August 2018 ordinary resolution of the Company through the 2nd Respondent increasing the share capital of the Company from ZMW 30 000 to ZMW 91 630 000 shares of ZMW 1 each was oppressive to the Petitioner and an order setting it aside; 2. A declaration that the Company's 5 October 2018 notice to the existing shareholders offering that they subscribe for the 91 600 000 unissued shares created through the resolution referred to in the preceding paragraph was illegal and oppressive to the Petitioner and an order setting it aside; 3. A declaration that the 29 November 2018 resolution to allot 91 600 000 shares to the 2nd Respondent was illegal and oppressive to the Petitioner and an order setting it aside; 4. A declaration that the 31 March 2021 ordinary resolution of the Company through the 2nd Respondent increasing the share capital of the Company from ZMW 91 630 000 to ZMW 216 630 000 shares of ZMW 1 each was oppressive to the Petitioner and an order setting it aside; J4 5. A declaration that the Company's 31 March 2021 notice to the existing shareholders offering that they subscribe for the 125 000 000 unissued shares created through the resolution referred to in the preceding paragraph was illegal and oppressive to the Petitioner and an order setting it aside; 6. A declaration that the 28 May 2021 resolution to allot 125 000 000 shares to the 2nd Respondent was illegal and oppressive to the Petitioner and an order setting it aside; 7. An order that the oppressor/2nd Respondent, or alternatively the Company, purchases the Petitioner's shares at a fair price to be fixed pro rata according to the value of the Company's issued share capital as a whole on the basis of the market value in 2016 when there had been no oppression, and without any discount to reflect the fact that the Petitioner's shares constitute a minority shareholding (accompanied by an order for the reduction of the Company's capital, in the case of a purchase by the Company itself) OR An order that the company be wound up 8. Such other order that may be made in the premises as shall be just: 9. Costs 2.2 The Petitioner {Mukulu Dairies Limited) and the 2nd Respondent (Dalmata SPA} were the only 2 shareholders in the 1st Respondent (Lactalis Zambia Limited} since the company was incorporated . The Petitioner was a minority shareholder in the 1st Respondent holding 28.5% of the issued JS share capital. The 2nd Respondent was the majority shareholder holding 71.5% of the issued share capital. 2.3 On 30th November 2021, the 1st & 2nd Respondents filed in the Court below an application to set aside the Petition and Affidavit verifying Facts for irregularity and want of jurisdiction on the part of the High Court. (The application to Set Aside). 2.4 The matter came up for hearing on 1st December 2021. Counsel for the 1st & 2nd Respondents brought to the attention of the Court the need for the Court to issue orders for directions and to consider the application to set aside the Petition which had been filed on 30 November 2021. The lower Court refused to hear the application and ordered that the Petition be heard. 2.5 The matter proceeded to trial and Counsel for the 1st & 2nd Respondents did not cross examine the Petitioner's only witness, and applied thereafter, for an adjournment to allow them to file an Answer to the Petition. The lower Court granted the adjournment and directed the Respondents to file a formal application for leave to file an Answer out of time. 2.6 On 3rd December 2021, the 1st & 2nd Respondents filed an application (the application for leave) to file an Answer out of time. To this was exhibited the draft Answer to the Petition and Affidavit verifying Facts and Skeleton Arguments. Pages 228 to 273 of the Record of Appeal have been noted. JG 2. 7 On 14th July 2022, the lower Court delivered a Ruling dismissing the Respondent' s application for leave to file Answer out of time and directed the Parties to file their final submissions. The final submissions were filed as directed, though after the Ruling, now assailed . 3.0 DECISION OF THE COURT BELOW 3.1 The trial Judge considered the application and heard the arguments for and against the Appellant's application for leave to file answer and affidavit verifying facts out of time, at its hearing on 9th February 2022. 3.2 The lower Court considered the Appellants' reasons for not filing their answer to the Petition, as being a misapprehension of the Rules of Court, whereby they believed that they would only be required to file their answer upon the Court giving directions for this at the hearing of 1st December 2021. The Appellants' argued spiritedly that they have a defence to the Petition on the merits, and ought to be given a chance to file their answer and affidavit verifying facts so that justice can be done in the matter. 3.3 The Respondent, on the other hand, argued that the Appellants, having had more than enough time, to file their documents and further, that the draft answer filed did not traverse the allegations in the Petition, and that it would be in the interest of justice if the parties proceeded to file their written submissions. 3.4 The lower Court noted that the Petition was filed on 5th August 2021, and the Court set down the Petition for hearing on 1st December 2021. The Court took note that, what was issued by this Court was a "Notice of J7 Hearing" which differs materially from a Notice of Scheduling Conference or a Notice of Status Conference. The lower Court did not accept the Appellants' argument that they expected the Court to give direction for conduct of the Petition at the hearing of 1st December 2021, as the notice was clear that the matter was scheduled for the hearing. It was the view of the lower Court that the Respondents had 3 months to file for directions or seek clarity from the Court regarding the way forward . 3.5 The lower Court referred to the law on minority rights in companies contained in the Companies Act1. The lower Court further referred to section 134 of the Companies Act1 and was of the view that the Companies' Act does not state the procedure to be followed where a person or party seeks to bring an application before the Court. 3.6 In arriving at its conclusion, the lower Court found that the provisions of the pre-1948 Act Compan ies Rules apply in this jurisdiction by virtue of the English Law Extent of Application Act2 which the Court held, must be read with local rules of practice. The lower Court was of the view that the Corporate Insolvency Act, 20173 and the Companies (Winding Up) Rules 2004, Statutory Instrument No. 86 of 20044 provide deta iled guidance for dealing with Petitions relating to winding up. 3. 7 In the next issue, the lower Court referred to the Practice Direction No.4 of 19775 and held that though the Practice Direction does not mention originating summons, petitions and other forms of originating process, the said times for entry of appearance are applied to all forms of commencement of process in this jurisdiction unless where statute specifically provides otherwise. The lower Court was of the view that J8 Counsel for the Appellants ought to have shown its intention to be heard by filing its Answer in a timely manner. 3.8 The lower Court was of the considered view that the Appellants had sat on their rights, and did not take the action against them seriously, nor take any step to defend or to demonstrate an intention to be heard in this matter. The Court was of the view that granting the order sought, would subject the Respondent to great prejudice, as it would entail re-litigating the whole action, which would cause undue delay and cost to the Respondent, who diligently prosecuted its claim in a timely fashion. 3.9 The lower Court found that the Appellants would not be prejudiced, and their side of the case will still be argued and determined if they are allowed to file written submissions as the documentary evidence on what transpired is common to both parties and consists largely of Minutes and Resolutions. 3.10 Upon considering all the circumstances, the lower Court was of the view that the Appellants did not show any special circumstances or compelling reasons why the Court should proceed with opening the hearing for the Appellants to file an answer late. 3.11 The lower Court ultimately dismissed the Appellants application for leave and ordered the Parties to file submissions in support of its case. J9 4.0 THE APPEAL 4.1 Being dissatisfied with the Ruling of the lower Court, the 1st and 2nd Appellants filed a Notice of Appeal and Memorandum of Appeal on 15th September 2022, advancing nine (9) grounds of appeal : 1. The Court below erred in law and fact when it refused to allow the Appellants to file their Answer notwithstanding the fact that the draft Answer raised contentious and triable issues; 2. The Court below erred in law and fact when it held that the Petition filed by the Respondent was one that could be determined on points of law and construction of documents; 3. The Court below erred in law when it held that the Appellants would not be prejudiced if they were permitted to file written submissions without presenting evidence; 4. The Court below erred in law and fact when it declined to allow the Appellants to file an Answer to the Petition despite there being no objection from the Respondent; 5. The Court below erred in law and fact when it held that Practice Direction No. 4 of 1977 applies to Originating Summons and Petitions; 6. The Court below erred in law and fact when it held that all Petitions in this jurisdiction are required to be heard and determined within a period of 3 months; 7. The Court below erred in law and fact when it held that the Companies (Winding Up} Rules, Statutory Instrument No. 86 of 2004 apply to an application under Section 134 of the Companies Act No. 10 of 2017. JlO 8. The Court below erred in law and fact when it held that the Appellants had sat on their rights despite the Appellants having filed an application to set aside the Petition for irregularity on account of want of jurisdiction prior to the hearing of the Petition; 9. The Court below erred in law and fact when it held at page R 24 that an application under section 134 of the Companies Act No. 10 of 2017 for unfair prejudice/oppression is required to be commenced by way of Petition pursuant to Order XL of the High Court Rules, Chapter 27 of the laws of Zambia and the Rules of the Supreme Court of England in force immediately prior to the coming into effect of the English Companies Act, 1948. 5.0 APPELLANT'S ARGUMENTS IN SUPPORT OF THE APPEAL 5.1 We have duly considered and appreciated the Appellant's Heads of Argument and Reply filed on 11th November 2022 and 2ih December 2022, respectively, and will not be recast here save for emphasis as necessary. 6.0 RESPONDENT'S HEAD OF ARGUMENTS 6.1 \/1/e have equally considered and appreciated the Respondent' s Heads of Argument filed on 6 th December 2022, which will also not be recast, save for emphasis as necessary. Needless to say, we are grateful for the written and viva voce submissions of Counsel. Jll 7.0 THE HEARING 7.1 At the hearing, it was the Appellants submission that at the core of the appeal, was the issue of jurisdiction of the lower Court to entertain the Respondent's action, by way of Petition . It was their argument that having used the wrong mode of commencement, which they described as a 'hybrid mode', meant that all proceedings that flowed were fatal as the lower Court did not have jurisdiction to entertain such an action . Reference was made to the decision of the Supreme Court in the cases of New Plast Industries v Commissioner of Lands and another1 and Chikuta v Chipata Rural Council2 • Counsel Chomba strongly argued that although the Petition had been brought under the provisions of section 134 of the Companies Act, a review of the reliefs sought, will lead the Court to introspect the issue of how proceedings under the said ought to be brought. 7.2 Counsel argued at length, and attempted to trace the history of the various Companies Act and made reference to inter alia, the Acts of 1929, 1948 and the applicable rules, in an attempt to persuade us to find for the Appellants on the issue of jurisdiction. 7.3 In countering these submissions, Counsel Yosa, maintained that what was in issue in this matter, was what he termed the dilatory conduct of the Appellant. He submitted that the Petition and notice of hearing was served on the Appellant 116 days and 112 days prior to the actual hearing. He urged the Court to find that the issue of jurisdiction, was what he termed a 'red herring' and to deflect the attention from the dilatory conduct of the appellant, having filed its application to set aside within the 14-day period, which is proscribed by Order XIX rule 3 & 4 of the High Court Rules . J12 7.4 He countered that Order 44 of the High Court Rules applies to procedure to be invoked in such matters and also referred to section 57 {l) of The Corporate Insolvency Act3 as being applicable in casu. He submitted that failure to issue directions, and or the lack of advertisement, does not render the proceedings a nullity, save that the Court may not issue a winding up Order. 7.5 Counsel Chiteba, in reply, urged us to note that the law on jurisdiction is settled and that the mode of commencement is not based on the reliefs sought, but on what statute has provided . Again, he referred us to the decisions in the case of New Plast and Chikuta v Chipata Rural Council. 8.0 DECISION OF THIS COURT 8.1 We have carefully considered the grounds of appeal reproduced in paragraph 4 above, the impugned Ruling, and the arguments and submissions of the Parties. We have noted that the thrust of the submissions in Court centered around the procedure and hence jurisdiction of the lower Court. 8.2 We have unpacked the 9 grounds of appeal, and are of the considered view that grounds 1,2,3,4 and 8 essentially challenge the decision of the lower Court to dismiss the Appellants' application for leave, whilst grounds 5, 6,7 and 9 canvass the rules and or procedure to be invoked in the mode of commencement of proceedings per se. For clarity and flow, we will deal firstly with the grounds that challenge the decision of the lower Court in refusing the Appellants leave to file its Answer and Affidavit verifying facts . J13 8.3 The assailed Ruling of the lower Court, at paragraph 1.1 reads as follows: "This Ruling is delivered in respect of an application by the Respondents for leave to file their Answer out of time. n 8.4 In considering the said 5 grounds of appeal, we will reflect on the main issue in contention, being the refusal of the lower Court to allow the Appellants to file its Answer and Affidavit verifying facts. It is the Appellants' contention that the Court below erred in law and fact when it refused to allow the Appellants to file its Answer, notwithstanding the fact that the draft answer raised contentious and triable issues. It is their submission that it is settled in this jurisdiction, that a party should be given an opportunity to be heard on the merits by presenting its full case before the Court. The Appellants contend that it is in the interest of justice that all cases must be heard on merit. 8.5 Our attention was drawn to the Record which the Appellants argue, shows that on 3rd December 2021, they filed an application before the lower Court for an order of leave to file an answer and affidavit verifying facts, out of t ime. It is the Appellants' submission that the lower Court delivered its Ruling on 14th July 2022 which is noted from pages 22 to 51 of the Record, dismissing the Appellants' application to file an Answer out of time, despite the exhibited intended draft Answer and Affidavit verifying facts in the Answer marked 'PL6', that raised triable issues and placed reliance on the case of Mwambazi v Morrester Farms Limited 3 • 8.6 The Appellants' referred to the cases of Jubilee Insurance Company Limited v Grace Anyona Mbinda4 in which the Court cited the case of Saudi Arabian Airlines Corporation v Premium Petroleum Company Ltd 5 in which J14 the Court defined a "triable issue" as an issue which raises a prima facie defence and which should go to trial for adjudication. The Appellants ' placed further reliance on Job Kiloch v Nation Media Group Ltd, Salaba Agencies Ltd & Michael Riorio6 and argued that a reading of the above cases demonstrates that when the Court is faced with a matter which has triable issues, it is always prudent for the Court to allow the matter to proceed to trial. 8.7 The Appellants have further submitted that the Court erred when it declined to allow them to file an Answer to the Petition despite there being no objection from the Respondent. It is their submission that the record does reflect that when the matter came up for hearing on 1st December 2021, the lower Court insisted that the Petition be heard and proceeded to hear the Petitioner' s witness, after which the Appellants applied for an adjournment which the lower Court granted with a directive that it files its formal application, which it did on 3rd December 2021. It is their submission that a Party must ordinarily be allowed to put up a defence and allow triable issues to go to trial, in the same manner as making amendments during proceedings, unless there is prejudice that may be suffered by the opposing party, which cannot be compensated by an order of costs. 8.8 The Respondent has, and for obvious reasons, countered the above, and submitted that this case did proceed to trial, where the triable issues ought to have been brought out through cross examination by the Appellants, which they chose not to do. 8.9 The Respondent has referred us to the case of Beck v Value Capital Limited7 which stated : J15 "Where a trial judge is not shown to have erred in principle, his exercise of a discretionary power should not be interfered with unless the appellate court is of the opinion that his conclusion is one that involves injustice, or the appellate court is clearly satisfied that the judge of first instance was wrong. 11 8.10 It is their submission that the learned trial Judge did not err in principle and that no injustice was occasioned on the Appellants because they knew about trial but for reasons best known to themselves, did not prepare. It was also their submission, that despite being served with the notice of hearing for trial timeously, the Appellants orally applied to file the Answer out of time at the hearing of the Petition . It was their contention that applying at the trial itself is the worst kind of delay, as that is the latest possible moment to apply, and that this kind of delay also constitutes an act of ma/a fides . In addition, they further argued that the Appellants only filed their application challenging the propriety of the originating process less than 24 hours before trial. 8.11 On the argument that the Court erred in law when it held that the Appellants would not be prejudiced, if they were permitted to file written submissions without presenting evidence, the Respondent countered that cross examining of a witness, is a mode of presenting evidence. It was further their submission that the Appellants chose not to present evidence and that the draft Answer did not reveal any new facts or documents, that were not already on record . 8.12 In our considered view, the argument of the Appellants application for leave, having been filed within the proscribed period of 14 days is totally J16 misplaced. It is trite and Order XIX rule 16 confirms that the Order applies to actions commenced by writ of summons. No matter how we look at these grounds of appeal, collectively or severally, they involve the exercise of discretion in pursuit of case management, ordinarily, a preserve of the lower Court. We are sufficiently minded to not interfere with the exercise of that discretion, unless we are satisfied that the discretion was not employed on judicious grounds and further that it led to injustice being occasioned on the Parties. 8.13 It is common ground that the Petition is based under section 134 of the Companies Act 1 for unfair, prejudicial and or oppressive conduct. Section 134 calls upon the Court, on the application of a member, to make orders (in accordance with the section), " .... if it is satisfied that- a. the affairs of the company are being conducted, or the powers of the directors are being exercised in a manner that is oppressive; or b. an act or omission or proposed act or omission, by or on behalf of the company has been done or is threatened, which was or is likely to be oppressive; or c. a resolution of the members, or any class of them, has been passed or is proposed which was or is likely to be oppressive. (the emphasis is ours). 8.14 Subsection 9 provides as follows : " In this section, "oppressive" means- a. Unfairly prejudicial to, or unfairly discriminatory against, a member or members of a company, or J17 b. Contrary to the interests of the members as a whole. 11 8.15 We ask ourselves whether the Court, can, in the absence of the Answer and Affidavit verifying facts of the Appellant, be satisfied of the alleged oppressive conduct? 8.16 In this jurisdiction, the principle is settled by the Supreme Court, in the celebrated case of Mwambazi v Morrester Farms Limited 3 • Although the decision in that case centered on the setting aside of a default judgment to allow for the filing of a defence, we are of the considered view, that the principle is equally applicable in casu, where the Court held as follows: "At this stage it is the practice in dealing with bona fide 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 would not be in the interest of justice to deny him the right to have his case heard. I would emphasize that for this favourable treatment to be afforded to the applicant there must be no unreasonable delay, no ma/a /ides and no improper conduct of the action on the part of the applicant ... 11 (the emphasis is ours) . 8.17 In applying the principles outlined above, we have had occasion to look at the reasons proffered by the Appellants in the 'delay' in filing the Answer and Affidavit. We note from the Record, and this is undisputed that the Appellants were duly served with a Notice of Hearing, we also note that they 'did nothing' nor took any step, until the application to set aside the Petition for want of jurisdiction, was filed on 30th November 2021, a day before the scheduled hearing of 1st December 2021. (The Application to Set J18 Aside) . The explanation tendered, at the hearing and which is noted from pages 312 to 326 of the Record of Appeal, being that as they had intended to, and did actually challenge the Petition by their Application to Set Aside, they did not file their Answer and Affidavit verifying facts, so as "not to take any further step in the proceedings," and thereby be seen to have taken a fresh step, in accordance with Order 2 rule 2 of the Rules of the Supreme Court7, on which their application to set aside was premised. The Appellants also proffered, that on their understanding of the procedure to be employed, the scheduled hearing by the Court, was for the purpose of issuing directions for the further conduct of the Petition. In the circumstances and noting that this was the first scheduled hearing of the matter, we ask ourselves, if there was any unreasonable delay, or ma/a /ides and or improper conduct of the action on the part of the applicant as guided above in the cited case of Mwambazi v Morrester Farms Limited3 • 8.18 We have noted the Respondent's argument, advanced to uphold the impugned Ruling, based on Order XIX rules 3 (3) and (4) of the High Court (Amendment) Rules 20206 • This argument, as we have stated above, is not applicable in casu. 8.19 We have also noted the arguments that the Action in casu, having commenced before the commercial division, ought to have escalated the attention of Counsel to proceed more diligently in defending the Petition. We are however of the considered view, that it is not only the reasons advanced for the late filing of the application, but the merits of the draft Answer, which raised triable issues, that should have formed the basis of the reasoning of the lower Court. J19 8.20 We also note that the Application to Set Aside referred to above, and which challenges jurisdiction of the lower Court, has still not been heard, though a return dated of 9th February 2022 was endorsed on the Summons as noted from page 205 of the Record of Appeal. 8.21 We are therefore of the settled view, that irrespective of the forceful arguments of Counsel, on jurisdiction and procedure, and the applicability of the different Act and Rules, we will not pronounce ourselves on a matter that has not received judicial determination of the lower Court. Without commenting on the merits or otherwise of the Application to Set Aside, the lower Court was sufficiently placed on notice of the Appellants' intention to challenge the jurisdiction of the Court in hearing the Petition. There is no doubt in our mind that the term "jurisdiction" has received sufficient judicial pronouncement by the Apex Court. In the case of Zambia National Holding Limited and UNIP v Attorney General8 , the Court stated as follows: '7he term ''iurisdiction" should first be understood. In the one sense, it is the authority which a court has to decide matters that are litigated before it, in another sense, it is the authority which a court has to take cognizance of matters presented in a formal way for its decision. 11 The Appellant has also referred us to the recent decision in the case of John Sangwa v Sunday Bwalya Nkonde SC9 , where the Apex Court guided that a jurisdictional issue can be brought by a party at any time in the proceedings. J20 8.22 Further, and still on the issue of jurisdiction, the Supreme Court in the case of Antonio Ventriglia and Manuela Ventriglia v Finsbury Investments Limited 10 stated as follows: "In making our decision to prioritize and give precedence to the hearing and determination of the Preliminary objection to this appeal, we reminded ourselves that where a jurisdiction objection is mounted against having a court proceed with a matter, it is imperative and incumbent upon the Court concerned to resolve or determine the issue before proceeding to deal with any other issue in the matter before it." 8.23 The Supreme Court, in the case of Elias Tembo v Florence Chiwala Salati, The Attorney General and Lusaka City Council 11 , held as follows : " ... jurisdiction is the precondition for the exercise of any judicial authority. It must be determined as the initial issue whenever it is raised. 8.24 We did, in our judgment, in the case of Citibank Zambia Limited v Suhayl Dudhia 12 state as follows: "A jurisdictional question can be brought up at any stage of the proceedings either by formal application or viva voce, even on appeal, whether or not it was raised in the court below and even where it is not pleaded in the grounds of appeal or filed heads of argument. The nature of jurisdictional questions is that, once they are brought to the attention of the Court, they must be dealt with immediately. This is because if a court decides to proceed without addressing the J21 jurisdictional issue and, it is later established that it had no jurisdiction, the court will have wasted both its own time and that of the litigants because the proceedings and everything that flows from them will be rendered a nullity and of no effect .. 11 8.25 We have already noted that we make these observations, without commenting on the merits of the Application to Set Aside, and simply to restate the principle with respect to applications that seek to challenge the jurisdiction of the Court. We note with concern that the application seen on page 205 bears the return date of 9th February 2022, while the assailed Ruling of the Court, at page R6, page 27 of the Record, (under paragraph 1 being introduction and background), states as follows : " The Respondents also informed the Court that they filed an application to raise a preliminary issue on 30th November 2021 which application was not on the Courts record yet. The Petitioner opposed the application. The Court dismissed the Respondent's attempt to obtain an adjournment pointing out that the Respondent's application to set aside Petition was not on the Courts record having been filed the day before the hearing. The Court said that this was an attempt to delay the hearing of the Petition and in breach of the Rules of Court which required documents to be filed at least two clear days before a hearing. Upon the Court dismissing the Respondent's application, it proceeded to hear the Petition. 11 8.26 From a reading of the above, it would appear, that the lower Court dismissed the Application to Set Asid e, without revealing its mind on the issue of j urisdiction, and other issues raised therein, and yet what remains J22 on the record, is the return date of 9th February 2022 for the hearing of the said Application. Also noted is the Appellants' application by Summons for an order for leave to file Answer and affidavit verifying Facts, filed as directed by the Court, was also returnable on 9th February 2022. The Record of proceedings before the Court seen from pages 327 to 333 clearly show that the application that was the subject of the hearing, was the Appellants' application, for an Order of leave to file its Answer and Affidavit verifying Facts. 8.27 We are of the considered view that if the Application to Set Aside was in fact dismissed, without it being considered, the lower Court misdirected itself as it is trite that the issue of jurisdiction, may be raised at any stage of the proceedings. It is abundantly clear that the lower Court did not consider the arguments on merit, nor did it state which provision of the law it sought to rely on, in dismissing the said application, while endorsing a return date on the same. 8.28 We are alive to the limited circumstances in which an appellate Court may interfere with the exercise of discretion of the lower Court. What is well settled in this jurisdiction is that discretion on the part of the Court must be exercised in a judicious and fair manner. A similar principle was espoused by the cited case of Beck v Value Capital Limited.7 The English Court in the case of Charles Osenten and Company v Johnson13 guided as follows: •• • the Jaw as to the reversal by a Court of Appeal of an order by the Judge below in the exercise of his discretion is well established, and any difficulty which arises is due only to the application of well settled J23 • principles in an individual case. The appellate tribunal is not at liberty merely to substitute its own exercise of discretion already exercised by the judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original jurisdiction, had it attached to them in a different way. If, however, the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion in that no weight or sufficient weight, has been given to relevant considerations such as those urged before us by the appellant, the reversal of the order may be justified." 8.29 Moving away from the issue of jurisdiction, we now turn our attention to the stand, espoused by the lower Court, in denying the Appellant's leave to file its Answer and Affidavit verifying facts. We have noted that the Petition refers to 'oppressive conduct' and calls for the Court to be satisfied with the conduct complained of. We have looked at the proposed draft Answer and note that specific paragraphs deny the contents of the Petition. We also note that matters of companies and more especially, applications seeking an order for Winding-Up, present a bigger picture, and have wider implications and ramifications than just the shareholders involved. By way of example, and only citing a few, we have noted that the following paragraphs are denied, paragraphs 5, 7, 9, 10 to 13, 17, 18 to 33 and offer an answer and opposing view. 8.30 On oppressive conduct, the learned Authors of the Halsbury's Laws of England1, gu ide as follows : J24 "The test of whether the company's affairs are being or have been conducted in a manner which is unfairly prejudicial to the petitioner is an objective test.. .. There are two elements to the requirement of unfair prejudice: the conduct complained of must be prejudicial in the sense of causing prejudice or harm to the relevant interest of the members or some part of the members, and also unfairly so. In deciding what is fair or unfair for these purposes, it must be borne in mind that fairness is being used in the context of a commercial relationship, the contractual terms of which are set out in the articles of association. The starting point is to ask whether the conduct of which the shareholder complains is in accordance with the articles and the powers which the shareholders have entrusted to the board. 11 8.31 In our considered view, the questions are : Can the lower Court expect to be satisfied of oppressive conduct to the threshold required, in the face of its refusal to allow the Appellants to lead evidence and file its Answer? Is it feasible that the Petitioner, (the Respondent) herein would be able to discharge the burden of proof, by the insistence of the Court to dismiss the Appellants' application for leave to file the Answer and Affidavit verifying facts? Did the Draft Answer exhibited to the application not reveal any triable issues that warranted a refusal of the application? J25 ,. • Would an Order for leave to file the Answer be so prejudicial to the Respondent Petitioner, that an order of costs could not compensate it, seeing that the alleged oppressive conduct complained of started in 2018? The answer to all of these questions is obviously in the negative. 8.32 It is patently clear that the draft Answer seeks to explain the circumstances and the business operations of the 1st Appellant company, in the exercise of the restructuring, and what is termed as the alleged "oppressive behaviour". We are also mindful that the test for oppression is an objective test, to be determined, based on the particular facts and circumstances of the matter in issue. The law on the burden and standard of proof, has been the subject of judicial interpretat ion and the case of Khalid Mohammed v The Attorney General 14 has long settled the principle of burden of proof resting on a Plaintiff, even in the face of a failed defence. It is trite and the authorities above espouse the principle that a defaulting party, while being ordered to pay costs, it is not in the interest of justice to deny him the right to have his case heard. We have also examined the conduct of the Appellants and its reasons for not filing its Answer and Affidavit verifying Facts, and are satisfied that there was no unreasonable delay, no ma/a fides and no improper conduct, to warrant the lower Court's refusal of its application . 8.33 The findings of the lower Court summarized in paragraph 3 above, inter alia, that al lowing the Appellants to file its Answer would cause undue delay, that the Appellants could be heard by filing its submissions, and the draft Answer did not raise any triable issues and that the oppression complained of could be determined by the documents alone, are al l J26 findings, which in our opinion, are perverse, and against the weight of the evidence placed before the lower Court. 8.34 It is also trite and has been argued that the purpose and object of cross examination is to enable other parties to challenge the evidence as presented. It does not, and cannot, espouse the purpose for which an Answer to a Petition is filed. It has been submitted by the Appellants that an Answer to a Petition, is a pleading and has the same function or effect of the defence, which is to traverse the issues raised in the Petition. The decisions by the Constitutional Court and the Apex Court, in the cases of Gift Luyako Chilombo v Biton Manje Hamalele15 and Anderson Kambela Mazoka & others v Levy Patrick Mwanawasa16 were cited in support of this argument. 8.35 We are further of the considered view, that the lower Court misdirected itself in dismissing the Appellants' application, for its reasoning that the Appellants' will not be prejudiced, and that their side of the case could still be properly advanced and argued by the filing of written submissions. It is manifestly clear that the lower Court placed more attention on the reasons advanced, by what it perceived to be the procedural delay of the Appellants, rather than considering the merits of the draft Answer. It is trite that a trial Court, ought not to lose the opportunity to determine matters on merit, based on the argument of case management, in appropriate circumstances. These findings are perverse and amenable to being set aside. 8.36 For the reasons above, we uphold the appeal based on grounds 1, 2, 3, 4 & 8 and set aside the assailed Ruling of 14th July 2022 dismissing the J27 "' Appellants application for an order for leave to file its Answer and Affidavit verifying Facts. 9. Conclusion 9.1 Having found merit in grounds 1,2,3,4 & 8, we uphold the appeal. For the reasons stated at the onset, we will not consider the remaining grounds, as the issues espoused will need to be considered and determined on the merits and are largely based on the Appellants application to set aside Petition, filed on 30t h November 2021, which we have discussed above. 9.2 We accordingly set aside the Ruling of the lower Court, and order that the matter be referred to a different Judge of the Commercial Division for the hearing of the Appellants application to set aside the Petition, and for it to follow to its logical conclusion thereafter. 9.2 Costs, here and in the lower Court to abide y the outcome of the decision of the lower Court. COURT OF APPEA JUDGE R1Ll1 P. C. M. NGULUBE COURT OF APPEAL JUDGE A. N. PATEL S. C. COURT OF APPEAL JUDGE J28