Lampostar Company Ltd v Njalili (Appeal 105 of 2015) [2018] ZMSC 421 (13 March 2018)

IN THE SUPREME COURT OF ZAMBIA APPEAL NO: 105/2015 HOLDEN AT NDOLA (Appellate Jurisdiction]^ BETWEEN: I I SUPREME COURT REGISTRY P. O. BOX 5G0b7 ' LUSAKA ____ _ LAMPOSTAR COMPANY LIMITED APPELLANT VS HENDRIX NJALILI RESPONDENT CORAM: Hamaundu, Kaoma and Kabuka, JJS, On 6th March, 2018 and 13th March 2018. FOR THE APPELLANT: Mr H. Kabwe, Messrs Hobday Kabwe and Company. FOR THE RESPONDENT: N/A JUDGMENT KABUKA, JS, delivered the Judgment of the Court. Cases referred to: 1. Water Wells Limited v Wilson Samuel Jackson (1984) ZR 98 (SC). J2 2. Sir Linday Parkinson and Company Limited v Triplan Limited [1973] 2 ALLE. R. 272. 3. Borniface K. Mwale v Zambia Airways Corporation Ltd (In Liquidation). 4. Isaac Lungu v Mbewe Kalikeka, Appeal No. 114/ 2013. Legislation referred to: 1. The Industrial Relations Court Rules, r. 44 (1). 2. The High Court Rules Cap. 27 O. 40. R.7. 3. Supreme Court Practice Rules 1999 Edition, Vol.l O. 23 rl; Order 23/3/3; 21 - 23. When we heard this appeal on 6th March, 2018, we allowed it and indicated that we would give our reasons later. This we now do. The appeal arises from a judgment delivered by the Industrial Relations Court on 28th January, 2015. The trial court upheld the respondent’s claim for unlawful dismissal, without hearing the appellant on its defence, on grounds that the appellant had failed to pay the K50,000.00 security for costs ordered by the court. J3 The facts of the case are substantially not in dispute. On the 5th of September, 2013 the respondent had issued a notice of complaint against the appellant in the court below. He was claiming for, amongst other relief, payment for unpaid leave days, unpaid salary, lunch allowance, transport allowance and redundancy pay. The appellant, as respondent to the matter, opposed those claims and accordingly filed its answer on 17th October, 2013. Trial was thereafter set for the 14th of April, 2014 but when the matter came up on that date, a representative of the appellant made an application for an adjournment, on the ground that one of its key witnesses was not in attendance. The respondent opposed this application giving the reason that the matter had taken long, but the court nonetheless granted the adjournment and the hearing was postponed to 5th May, 2014. On the latter date, the matter failed to take off again, as the court was of the view that the appellant’s chosen representative in attendance was an imposter, and adjourned the hearing to 5th June, 2014. The court also directed the appellant’s representative to retain counsel. J4 When the matter came up as scheduled on 5th June, 2014 counsel retained by the appellant sought an adjournment to allow her obtain proper instructions from her client. Displeased with the manner the appellant was conducting the matter by delaying the commencement of trial, the court ordered the respondent to proceed with his evidence in chief, after which the matter was adjourned to 7th August, 2015 for cross-examination. Counsel for the appellant was also advised to ensure that she obtained full instructions from her client before that date. On the next date of hearing as scheduled, counsel proceeded with cross-examination of the respondent but did not conclude and the matter was further adjourned to 20th October, 2014 for continued cross-examination. The matter next came up on 25th November, 2014 and the appellant was to commence its defence but counsel was not in attendance. After noting that at the previous sitting, the respondent had closed his case and the appellant ought to have proceeded with its defence, the court adjourned the matter to 24th December, 2014 for delivery of judgment, subject only to any application by the respondent to arrest the said judgment. J5 On 24th December, 2014, when the matter came up for delivery of judgment, the court was unable to proceed for reasons that counsel for the appellant had filed an application for arrest of the judgment. The application was supported by an affidavit to which the respondent made a viva voce submission in opposition. After hearing both parties, the court noted that, although the application to arrest judgment could be made at any time, in this instance, it was only filed a day before the date set for delivery of judgment. The court further observed that, it appeared there was lack of communication between counsel that had been handling the matter on behalf of the appellant and counsel who had since taken over conduct of the same. It is for those reasons that the court proceeded to render a ruling granting the respondent leave to arrest judgment, on conditions expressed in the following terms: “1. upon payment of security deposit of K5O, OOO to cover the cost of 25th November, 2014, today and any future adjournments at the instance of the respondent. 2. the said security deposit shall be paid on or before 6th January 2015, failing which judgment shall be delivered on 13th January 2015 and parties shall be at liberty to up-lift same from the registry. ” J6 Aggrieved by this turn of events, the appellant sought leave to appeal the portion of the ruling, ordering it to pay K50, 000 security deposit. Leave to appeal the ruling was granted, but was also made subject to the same condition that a deposit of K50, 000 be paid as security for costs by 27th January, 2015 failing which the court would proceed to deliver its judgment. The appellant failed to pay the K50,000.00 and on 28th January, 2015 the trial court below proceeded to deliver its judgment. It is against both the ruling and the judgment that the respondent filed an appeal to this Court, on grounds couched in the following terms: 1. That the learned judge of the Industrial Relations Court and the two members erred in law when they proceeded to request for payment of K50, 000. 00 as security for costs before the appellant could be heard on its defence. Further the appellant contends that the learned judge of the Industrial Relations Court misdirected himself in law and fact when he proceeded to give judgment minus hearing the testimony of the appellant’s defence in court. 2. That the Industrial Relations Court erred in fact and law when it made findings of facts which were not supported by evidence adduced in court and without an equal evaluation of the evidence adduced in court. J7 When the matter came up for hearing of the appeal however, counsel for the appellant abandoned the second part of ground one, and ground two. The appeal accordingly proceeded only on the grievance faulting the court below for having ordered payment of security for costs before the appellant could be heard on its defence. The appellant relied on its written heads of argument and submissions filed in support of the grounds of appeal. To the extent that the same are relevant to ground one of the appeal as amended, the appellant contends that failure to hear evidence does not only deprive a litigant of the opportunity to have his case determined on the merits, but also deprives such a litigant of the right to be heard. The case of Samuel Jackson v Waterwells Limited1 was cited in support of the submission. Counsel for the appellant also argued that the condition to pay K50, 000. 00 as security for costs imposed by the court was both unconscionable and high. That it effectively diminished the appellant’s right to be heard in defence, by making it very difficult for the appellant to give evidence. The submission was that any J8 conditions set by the court for the parties to litigation should be on terms that allow each party to present their case. The respondent who was unrepresented in the court below, did not file any heads of argument nor did he appear at the hearing of the appeal. Having considered the arguments and submissions by counsel for the appellant, together with the authorities relied on, we are satisfied, and it is not in dispute, that following upon one or two prior adjournments at the instance of the appellant, counsel for the appellant did not attend the hearing scheduled for 25th November, 2014, when he was supposed to commence the appellant’s defence. In reaction to counsel’s absence, the court adjourned the matter for judgment to be delivered on 24th December, 2014 unless an application to arrest the judgment was sooner made by the appellant. Counsel for the appellant did make such application and, in the affidavit in support, explained that counsel who was previously seized with the matter had since left the employ of the firm. And that, as counsel who had just taken over conduct of the matter, he could J9 not make it in time for the hearing on 25th November, 2014 due to a prior commitment involving a court hearing in another matter. Counsel also pointed out that the appellant’s witness was nonetheless in attendance at the said sitting. After considering the reasons advanced by counsel for his non- attendance, the court granted the leave sought to arrest judgment. At its own instance, the court below further ordered that the appellant would only be heard on condition that a security deposit be paid of K50, 000. 00 to cover the costs of the 25th November, 2014 and those of any future adjournments, at the instance of the appellant. The monies ordered as security for costs were to be paid on or before 6th January, 2015, failing which judgment was be delivered on 13th January, 2015. Granted those were the circumstances, the question that begs an answer, in our view, is whether the order for security for costs was properly made. That is the real issue in contention in this appeal. In determining the said issue, we bear in mind that the Industrial Relations Court is a court that was established to provide J10 substantial justice to litigants. We also note that, the concern of the court which led it to make the order for security for costs was the apparent delay in hearing the matter caused on the part of the appellant. Rule 44 (1) of the Industrial Relations Court Rules specifically addresses that situation and reads as follows: “Where it appears to the Court that any person has been guilty of unreasonable delay, or of taking improper, vexations or unnecessary steps in any proceedings, or of other unreasonable conduct, the Court may make an order for costs or expenses against him.” (underlining for emphasis supplied) It is clear from the above quoted rule that it also covers payment of costs caused by unnecessary adjournments. It is by no means, a provision for payment of security for costs. It is worth noting, in this regard, that the Industrial Relations Court Rules infact have no express provision that empowers the Industrial Relations Court to order security for costs. It is also worth noting that the appellant was defending the matter in the court below. Even Order 40 Rule 7 of the High Court Rules, which provides for security for costs in the High Court is targeted at the plaintiff as the person who has come to JU court and not the defendant, who is, generally, a person that has been dragged to court. This order states that: “The Court or a Judge may, on the application of any defendant, if it or he sees fit, require any plaintiff in any suit, either at the commencement or at any time during the progress thereof, to give security for costs to the satisfaction of the Court or a Judge, by deposit or otherwise, or to give further or better security, and may require any defendant to give security, or further or better security, for the costs of any particular proceeding undertaken in his interest.” (Underlining for emphasis supplied) Further, Order 23 Rule 1 of the Supreme Court Practice Rules 1999, Volume 1, provides the instances where security for costs of the action will be ordered and reads as follows: " Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court - (a) that the plaintiff is ordinarily resident out of the jurisdiction, or (b) that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so, or (c) subject to paragraph (2) that the plaintiffs address is not stated in the writ or other originating process or is incorrectly stated therein, or J12 (d) that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation, then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just. (Underlining for emphasis supplied) The above quoted provision makes it clear that the requirement for payment of security for costs is placed on the person in the position of the plaintiff or a claimant for bringing or dragging the defendant before court. Notwithstanding that under 0.40 Rule 8 of the High Court Rules, any party, which includes a defendant, who is pursuing his own interest in a matter, may be ordered to pay security for costs whilst proceedings are stayed, pending such payment, the rationale, generally, is that security for costs cannot be ordered against a defendant who is merely exercising his right to defend a claim brought against him and who is compelled to litigate or take proceedings which are merely defensive. It is further noted that, although a court has a discretion to grant security for costs, it must consider the circumstances of each case, and in light thereof, determine whether and to what extent, or for what amount a party J13 may be ordered to provide security for costs. One of the major considerations is the likelihood of the claimant succeeding. This of course can only be done where the merits of the case are considered. In the present set of circumstances, the appellant is in the position of a defendant and is a company incorporated within the Republic of Zambia. There is nothing to indicate or show that the said company would be unable to pay the respondent’s costs or will abscond the proceedings. In any event, the respondent was representing himself and did not retain counsel. There is a plethora of case law to the effect that a litigant representing himself is only entitled to out-of-pocket expenses incurred in prosecuting his claim and is not entitled to legal fees which are the preserve of counsel. In Sir Lindsay Parkinson & Co Ltd v Triplan Ltd2, Lord Denning MR, as he then was, listed the circumstances that the Court might take into account on an application for security for costs in question form, as follows: 1. Is the claim bona fide and not a sham? 2. Does the claimant have a reasonably good prospect of success? 3. Is there an admission by the defendant on the pleadings or elsewhere that money was due? J14 4. Is there a substantial payment into court, or an ‘open offer* of payment? 5. Is the application for security being used oppressively so as to try to stifle a genuine claim? 6. Is the claimant’s want of means brought about by any conduct by the defendant, such as delay in payment or doing their part of the work? 7. Is the application for security made at a late stage of the proceedings? It is clear from the above stated guidelines that an order for security for costs is, ordinarily, made against a plaintiff who does not have a bonafide claim nor good prospects of success. Security for costs are not meant to stifle a genuine claim, and to that end, we did in the case of Borniface K. Mwale v Zambia Airways Corporation Ltd3, guide trial courts as follows: “According to Rule 1 of Order 40 of the High Court Rules, costs are monies incurred in defending oneself or in proving one's case. Therefore, costs do not include the actual amount claimed. Security for costs is generally provided by the plaintiff. However, the proceedings in which the defendant can be ordered to provide security for costs are only those proceedings taken in his own interest. To hold otherwise would be a paradox since the defendant is forced to appear before court to defend his rights”, (underlining for emphasis supplied) We upheld the same principle in Isaac Lungu v Mbewe Kalikeka4 J15 Similarly, in the present case, we find that the circumstances did not warrant the grant of an order for security for costs. The appellant had already filed its answer and clearly intended to defend the complaint made against it. Failure by counsel to attend court at a hearing is not one of the considerations that would justify the grant of an order for security for costs. The remedy was in making an order condemning him in costs for the wasted day, pursuant to Order 44, Rule 1 of the Industrial Relations Court Rules. The order made by the trial court for security for costs of K50, 000 on appeal was equally misplaced. The figure was not informed by any disclosed considerations and failure by the appellant to comply amounted to a denial of justice, as correctly argued by counsel for the appellant. As the order for security for costs in the circumstances of this case was a misdirection which has no legal support whatsoever, we hereby set it aside. Ground one of the appeal faulting the order for security for costs made by the trial court below as a misdirection, accordingly, succeeds. J16 In the event, judgment of the trial court dated 28th January, 2015 is also set aside and in its place, we order a re-hearing of the matter before another court. Costs will abide the outcome of matter upon a re-trial. Re-trial ordered. E. M. HAMAUNDU SUPREME COURT JUDGE R. M. C. KAOMA SUPREME COURT JUDGE J. K. KABUKA SUPREME COURT JUDGE