Lamise Trading Limited (Suing in its capacity as Shareholder of Intelligent Mobility Solutions Limited) v Kapsch Trafficcom AG and Anor (2024/HPC/0339) [2024] ZMHC 190 (12 August 2024)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: 2024/HPC/0339 LAMISE TRADING LIMITED (Suing in its capacity as Shareholder of Intelligent Mobility Solutions Limited) APPLICANT AND KAPSCH TRAFFICCOM AG 1 ST RESPONDENT INTELLIGENT MOBILITY SOLUTIONS LIMITED 2ND RESPONDENT Before: The Honourable Mr. Justice L. Mwanabo on 12th August, 2024 For th e Ap plicant: Mr. J. Chileshe of Messrs. Eric Silwamba, Jalsi & Linyarna Legal Practit ion e rs For th e 1st Re spondent: Mr. S . Chisanga a n d Mrs M. Mwa b a of Messrs. Corpus L--- For the 2 11d Respondent: Mr. J . S. Ka kondo appear ing as Director Lega l Practitioners RULING Cases referred to: l. Leopold Walford (Z) Limited v Unifreight Ltd (1985) ZR 203 2 . African Alliance Pioneer Master Fund v Vehicle Finance Limited (SCZ AppealNo. 21/2021 3 . Megha Engineering and Infrastruc ture Limited V the Attor11ey General and Marks Industries Limited, Appeal No. 270 of 2021 St atutes an~ Rules :referred to:_ 1. High Court Rules Cap 27 of the Laws of Zambia 2 . Rules of the Supreme Court 1965 (White Book) RSC, 1999 Edition, Volume 1 3 . Black's Law Dictionary 11th Edition 1.0 APPLICATION 1.1 This is an application by the Applicant for leave to issue and serve application for leave to commence derivative action a nd originating process out of jurisdiction. 1.2 The application was made pursuant to Order 10 Rules 15 and 16 of the High Court Rules 1 as read with Order 11 Rule l(c) and Rule 4 of the Rules of the Supreme Court 1965 (White Book)2 and is supported by an affidavit, skeleton arguments and list of authorities. 2.0 INTRODUCTION 2. 1 The Applicant h erein filed an application on 13th May, 2024 for leave to commence a derivative action against the 1st Respondent for alleged breach of fiduciary duties and for consequential losses suffered by the 2 nd Respondent. 2.2 The 1st Respondent is a foreign entity based outside jurisdiction hence the application herein for leave to issue and serve process out of jurisdiction. 3.0 EVIDENCE AND ARGUMENTS IN SUPPORT OF THE APPLICATION 3.1 According to the affidavit in support of the application, the reason for the application is that service of t h e application for leave to commence a derivate action was served on the 1s t Respondent's advocates who were the same advocates in a withdrawn matter against the 1 stRespondent but they remained silent. It was further stated that the intended claim is against a comp a n y (1 st 3.2 Respondent) which is registered out of the jurisdiction of this country in particular Vienna, Austria, situate a t AM Europlatz 2 1120, Vienna, Austria and that the 1st Respondent is a necessary party to the R2 inten ded action herein as such leave is required to issu e and serve Court process. It is contended t hat the Applicant has a good and arguable case for the reliefs sough t and th e p roposed writ of su mmons and statement of claim was exhibited. 3.3 In arguing the application, the Applicant reprod uced Order 10 Rules 15 and 16 of the High Court Rules 1 . I was further referr ed to the case of Leopold Walford (Z) Limited v Unifreight Ltd (1985) ZR 203 where the need to obtain leave was held to be cardinal but it was further stated that where leave is not initially obtained the default can be cured by an application made ex post facto. 4.0 EVIDENCE AND ARGUMENTS IN OPPOSITION TO THE APPLICATION 4 . 1 The 1s t Respondent opposed the application mainly on the basis that the 1s t Respondent's advocates herein had not made any undertaking to receive process on behalf of th e 1st Respondent. The main issue raised in opposition is that the Applicant should have sought leave before filing the application for leave to commence a derivative action. 4 .2 It was also contended that the Applicant's inte nded action lacks merit as the derivative action is intended to be commenced against the 1st Respondent as a shareholder when the acts complained of were allegedly done by t he intended 2 nd Respondent's directors. 4 .3 The 1st Respondent in the arguments contesting the Applicant's application cited several authorities to make the point that 5.0 REPLY BY THE PLAINTIFF 5.1 The Applicant in its reply contended that the 1st Respondent's a dvocates had a choice to return the Court process even as requ ested in a writing to them but they chose to effect service on the 1st Respondent and proceeded lo file notice of appointment as advocates for the 1st Respondent as such the need for leave has been overtaken. 5.2 The Applicant in its a rguments in reply contended that the power of attorney for the deponent of the affidavit in opposition to this R3 application was not authenticated a n d cited the case of African Alliance Pioneer Master Fund v Vehicle Finance Limited2 to for tify th e argument. The rest of the issues r a ised were s imply a rep roduction of affidavits earlier filed by the parties and repeat of th e a r guments earlier made. 6 .0 ANALYSIS AND DECISION 6.1 I have heard and consider ed t h e evidence and a rgu men ts by t h e Applicant a nd the 1st Respondent. The 2 nd Respondent d id not file any documents relating to the application herein even after being given extensions to do so. 6.2 An application to issue and serve process out of jurisdiction is governed by Order 10 Rule 16 of the High Court Rules 1 w hich provides as follows : "16. An application for leave to issue for service out of the jurisdiction a writ of summons, originating summons, or originating notice of motion or a concurrent writ of summons, originating summons or originating notice of motion may be made ex parte to the Court or a Judge on deposit of the writ, summons or notice with the Registrar together with an affidavit in support of such application. The affidavit shall state a. the grounds upon which the application is made and the facts which bring the plaintiffs case within t he class in respect of which service out of the jurisdiction may be allowed; b . that the d e ponent is advised and believ es that the plaintiff has a good cause of action or right to re lief; c . in what place or country the defendant resides o r probably may be found; d. whether the defendant is a citizen of Zambia or not. " 6 .3 Ordinarily such an application is made exparte and the requirements are outlined by the said rules. The affidavit in support of the application herein has alluded to the requirements outlined and R4 evidence of compliance with the requirements was adduced. Therefore, in terms of the content that the application must bring forth I am satisfied that the same has been complied with . 6.4 The main contention by the 1st Respondent is that the application was made late in the day. The Applicant, has raised issue with the affidavit in opposition and questioned the authenticity of the Power of Attorney. My concern is that th e issues raised in the arguments in reply are not mentioned in the affidavit in reply and the basis of the claim that the document was executed outside jurisdiction has no evidential support. I have taken the liberty to look al the Power of Attorney in issue: it is not clear where the same was executed from. However, looking at the attestation clause, the names of the signatories a re not stated and t h eir capacities or positions in the 1st Respondent are not stated. The document itself though indicated to be a deed it is not sealed a nd delivered as the common seal of the 1st Respondent was not affixed. A deed is defined by Black's Law Dictionary 11th Edition3 as fo llows: ccA deed is a writing sealed and delivered. '' 6.5 In light of the foregoing, the Power of Attorney in issue was not properly executed: therefore, less weight can be attached to it. However, ideally, an application for leave of this nature should precede the filing of the Court process. Nevertheless, case law has demonstrated that the failure to obtain leave first is curable. In the case of Megha Engineering and Infrastructure Limited V the Attorney General and Marks Industries Limited3 it was held that: "However, as we held in Phillip KR Pascall case, the defect or irregularity is curable. As we noted in that case, there was no prejudice suffered as there was no default Judgment obtained. Equally in casu, there was no default Judgment obtained by the Respondent. The 1 s t Appellant entered conditional appearance and then raised issues and therefore suffered no prejudice. In that respect, this is not a fit and proper case for setting aside or RS striking out of the writ of summons. We are of the view that the action be sustained". 6.6 Therefore, since the Applicanl made the application before there was any adverse action taken against the Respondents there is no p rejudice suffered by the Respondent in allowing the applicaion. However, I d o not agree with Counsel for the Applicant's contention th at since the advocates for the 1st Respondent already received and served the Court process for leave on the 1st Respondent the need for leave is no longer necessary as there are no exceptions under the law to the requirement to obtain leave to issue and serve process out of jurisdiction. I further wish to advise Counsel for the Applicant to use correct language in making his point. What is stated in paragraph 14 of the arguments in reply in the following sentence is unacceptable: " ... the said actions place this Honourable Court in a compromised position ... . ". Th e use of the word compromise is wrong as the Court is not supposed to be compromised by the parties' action s . 6. 7 Going by the evidence befor e me, I am satisfied that the Applicant's application herein has met the threshold for granting the application sought. I accordingly, hereby grant leave to the Applicant to issue and serve the respective Court processes out of jurisdiction. 6.8 Costs shall b e i Lastone Mwanabo HIGH COURT JUDGE R6