Patel v Surma Stationers Ltd and Ors (SCZ Judgement 12 of 2009) [2009] ZMSC 167 (14 May 2009)

JI (201) IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) SCZ JUDGMENT No. 12of 2009 APPEAL NO .86/2007 BETWEEN: MANHARLAL HARJI PATEL APPELLANT AND SURMA STATIONERS LIMITED SHASHIKANT DEVRAJ VAGHELA EMMANUEL MWANSA 1st RESPONDENT 2nd RESPONDENT 3rd RESPONDENT Coram: Sakala, CJ., Chitengi and Silomba, JJS. on 2nd October, 2008 and 14th May, 2009 For the Appellant : Mr. N. K. Mubonda of D. K. Kemp For the 1st and 2nd Respondent: Mr. R. Mainza ofMainza & Co. For the 3rd Respondent : N/A JUDGMENT Sakala, CJ., delivered the judgment of the court. Cases Referred to 1. Zambia Consolidated Copper Mines Limited Vs. Joseph Daniel Chileshe [2002] ZR86 2. William David Carliste Wise Vs. E. F. Hervey Limited [1985] ZR179 3. Letang Vs Cooper[1965] 1Q. B. 232 J2 (202) 4. Burton Construction Limited Vs. Zaminco Limited [1983] ZR 20, 5. Chikuta V. Chipata Rural Council [1983] ZR 26 This is an appeal against the Order of the High Court refusing the Appellant leave to amend the Writ of Summons, the Statement of Claim and to file the Plaintiff’s 2nd Supplementary Bundle of Documents and Supplementary Witness Statement with costs to be taxed in default of agreement. For convenience, the Appellant will be referred to as the Plaintiff; while the 1st, 2nd and 3rd Respondents will be referred to as the 1st, 2nd and 3rd Defendants, respectively; the designations which the parties were at trial. The salient facts of the case are that sometime on 27th August, 2004, the Plaintiff commenced a cause of action by way of a Writ of Summons. The Summons was accompanied by the Statement of Claim. The Endorsements on the Writ of Summons were that the Plaintiff’s claim was for an Order that the purported sale of Stand No. 10801, Lusaka, to the 3rd Defendant was illegal, null and void and of no consequence. The Plaintiff also claimed for an injunction restraining the 3rd Defendant from carrying out any developments on the said property; and also a claim for an injunction restraining the 1st Defendant from assigning the said stand No. 10801, Lusaka, J3 (203) to the 3rd Defendant. The Plaintiff claimed for further and other relief the court would deem fit and costs. In the Statement of Claim, the Plaintiff explained his and the 2nd and 3rd Defendants’ positions in the 1st Defendant Company and repeated the claims as endorsed in the Writ of Summons. The three Defendants each entered a Memorandum of Appearance to which they attached their defences. On 27th May, 2005, the Plaintiff changed advocates. On 1st December, 2005 the Plaintiff applied for leave to amend the original Writ of Summons, the original Statement of Claim and to file the Plaintiff’s Supplementary Bundle of Documents and the Plaintiff’s Supplementary Witness Statement. The application was supported by an affidavit. The Defendants, too, filed affidavits in opposition. The Endorsements on the Amended Writ of Summons were now expanded. According to the Amended Statement of Claim, the Plaintiff pleaded that he was a Director in the 1st Defendant; that the 1st Defendant owns Stand No. 10801; that Plaintiff, on 20th April, 2004, petitioned to wind up the 1st Defendant and appoint a liquidator; and that on 22nd April, 2004, there was a reconvened Annual General Meeting of the 1st Defendant. The Plaintiff also pleaded in the Amended Statement of Claim that on 29th April, 2004, a contract of sale relating to Stand No. 10801 was signed between 1st Defendant as Vendor, improperly procured by the 2nd Defendant; and the 3rd Defendant as the Purchaser; and that the said contract J4 (204) of sale dated 29th April, 2004, relating to Stand No. 10801, was void and of no effect. The Amended Statement of Claim repeated the clauses as endorsed on the Amended Writ of Summons. The learned trial Judge considered the application, the affidavits, the pleadings and the skeleton arguments. The learned trial Judge agreed that the law allows amendments to be made at any stage of proceedings; but noted that there is one exception to the general law; that amendments which introduce a new cause of action to the proceedings are not allowed. He accepted the submissions that the proposed amendments by the Plaintiff would introduce a new cause of action in this matter which would prejudice the Defendants if the matter was to start all over again. Consequently, the trial Judge refused the application for leave to amend with costs to the Defendants. Hence, the Appeal to this court. The Plaintiff filed a memorandum of Appeal containing two grounds, namely: “1. That the learned trial Judge misdirected himself in law in holding that amendments which introduce a new cause of action to the proceedings are not allowed; and 2. That the learned trial Judge misdirected himself in law in refusing the application for leave to amend as well as all the other applications.” On behalf of the parties, Counsel relied on detailed heads of argument filed with the court based on the two grounds. There was J5 (205) no representation for the 3rd Defendant. The court was informed that a Notice of Non Appearance was filed on behalf of the 3rd Defendant. The summary of the written heads of argument and the submissions on ground one, on behalf of the Plaintiff, is that if a new cause of action arises out of the same facts or substantially the same facts, as in the instance case, the court is empowered under Order 20 Rule 5(5) Rules of the Supreme Court (White Book), to grant the amendment requested. The Plaintiff, citing the case of Zambia Consolidated Copper Mines Limited Vs. Joseph Daniel Chileshe1, submitted that even if one adopted the position taken by the learned trial Judge that the proposed amendments introduced a new cause of action, the application should have been granted as the set of facts proposed to be relied on only amounted to a modification, development or variation of the claim already filed in the proceedings; that the trial Judge should have granted the application under Order 20 Rule 5 of the Rules of the Supreme Court; and that his refusal was a misdirection in law. The gist of the written heads of argument on ground two is that, before the trial or hearing could start before the trial Judge, the Plaintiff, having changed lawyers, applied by way of summons, for leave to amend the Writ of Summons and Statement of Claim, to file a 2nd Supplementary Bundle of Documents, and to file a Supplementary Witness Statement; that the application for leave J6 (206) was filed together with an affidavit in support and Skeleton Arguments; and that the application was made pursuant to Order 18 Rule 1 of the High Court Rules Cap. 27 and Order 20 Rule 5(1) Rules of the Supreme Court. It was contended, in ground two, that in their present state, the Writ of Summons, and especially the Statement of Claim are defective as they did not state the facts which give rise to the claim with the requisite clarity and elucidation; that the Statement of Claim does not clearly bring out issues of fact to the surface; and that the Statement of Claim does not give details of who the owner of stand No. 10801 is. It was submitted that it was necessary to make the application to the court for the necessary amendments to be made to both the Writ of Summons and the Statement of Claim in order to correct the defects or errors so that the real questions in controversy between the parties could be determined after the claim is properly articulated and set out in the said documents. It was also submitted that the learned trial Judge was wrong in law in refusing the application for leave to amend on the grounds that the proposed amendments would introduce a new cause of action in the matter. It was contended that there was no new cause of action that was being introduced by the proposed amendments. It was pointed out that in the case of William David Carliste Wise Vs. E. F. Hervey Limited2, this court agreed with the meaning assigned to the phrase “cause of action” by Lord Deplock in the case of Letang Vs Cooper3, when he said the words meant “simply J7 (207) a factual situation the existence of which entitles one person to obtain from the court a remedy against another person”. It was submitted that in this respect, the proposed amendments do not bring up a new factual situation that is entirely different from that already disclosed in the statement of claim. It was further submitted that the learned trial Judge did not state in his decision which of the proposed amendments created or introduced a new cause of action; that the learned trial Judge exercised his discretion in refusing the application wrongly as both Order 18 rule 1 of the High Court Rules and Order 20 Rule 5, Rules of the Supreme Court empowered him to grant the leave requested by the Plaintiff. Suffice it to point out that several authorities were cited in ground two in support of the general principles for grant of leave to amend. The 1st and 2nd Defendants filed combined written response and argued grounds one and two together. The gist of the combined written response to the joined grounds one and two on behalf of the 1st and 2nd Defendants is that the learned trial Judge did not misdirect himself in law when he held that amendments which introduce a new cause of action to the proceedings are not allowed and that the court below did not misdirect itself in law when it refused to grant the Plaintiff leave to amend the Writ of Summons and the Statement of Claim. In response to the arguments in response to grounds one and two; the cases of Burton Construction Limited Vs. Zaminco J8 (208) Limited4, and Chikuta V. Chipata Rural Council5 were cited. In the Burton Construction Limited case, this court stated the law on the High Court power to amend pleadings as follows:- “The court’s power to amend as contained in 0.18 of the High Court Rules does not extend to the introduction of a new cause of action by the Plaintiff.” And in Chikuta Case this court re-affirmed the decision in the Burton Construction case and held, inter alia, that: “An amendment under Order 18 of the High Court Rules is justified only where it results in mere recasting of the case in order to agree with the evidence and without the introduction of any new cause of action or defence.” It was pointed out that the heads of claim in the proposed Amended Writ of Summons and the Statement of Claim, do not appear in the original Statement of Claim. It was submitted that the Plaintiff was attempting to introduce new causes of action in the proposed Amended Writ of Summons and Statement of Claim which were not pleaded in the Original Writ of Summons and Statement of Claim filed in court on 27th August, 2004. It was further submitted that the Plaintiff was not legally entitled to introduce new causes of action by way of amendments to the Writ of Summons and Statement of Claim; and that the court below was on firm ground when it refused to grant the Plaintiff J9 (209) leave; that the Defendants would have greatly been prejudiced had the court below allowed the Plaintiff to amend the Writ and Statement of Claim as proposed; and that the proposed amendments would have had the effect of nullifying the defences filed by the Defendants as well as the bundles of documents, skeleton arguments and the witness statements. We have considered the pleadings, Ruling appealed against and the written heads of argument on behalf of the respective parties. We propose to deal with the arguments on the two grounds together as the two grounds are related. To appreciate the issues for determination in this appeal, it is pertinent to set out the Plaintiff’s claim in the Original Writ of Summons and the Original Statement of Claim and compare them with the claims in the Amended Writ of Summons and the Amended Statement of Claim. In the Original Writ of Summons, the Plaintiff’s claims, repeated in the Original Statement of Claim, were as follows “(1 ) A declaration that the contract of sale pertaining to the sale of stand 10801 Lusaka is illegal, null and void as no such sale was sanctioned by the board of the first Defendant; (2) An injunction restraining the first Defendant from assigning the said stand 10801 to the third Defendant and or anyone else for that matter; J10 (210) (3) An injunction restraining the third Defendant from carrying out and or continuing any works at the said stand 10801 Lusaka pending determination of the main action; (4) Further any other relief as the Court may deem appropriate; and (5) Costs.” In the amended Writ of Summons, and Amended Statement of Claim, the Plaintiff was seeking the following reliefs: - “(1) A declaration that the contract of sale dated 29 April, 2004 relating to stand No. 10801 Lusaka is null and void; (2) A declaration that the Re-convened Annual General Meeting of the 1st Defendant held on 22nd April, 2004 at which a resolution is alleged to have been passed purporting to sanction the sale of the said Stand No. 10801 was and is invalid; (3) A declaration that the resolution allegedly to have been passed at the said Annual General Meeting is invalid, null and void; (4) A declaration that the said Stand No. 10801 Lusaka is still the property of the 1st Defendant; (5) Against the 3rd Defendant an order for vacant possession of the said stand No. 10801 Lusaka; (6) Any other relief that the Court may deem fit; and Jll (211) (7) Costs The Order refusing the application for leave to amend the Writ of Summons and the Statement of Claim reads as follows: “ Order Having heard counsel for the Plaintiff and the Defendant and having read the Affidavits filed herein, I agree that the law allows amendments to be made at any stage of proceedings. There is however, one exception to the general law. Amendments which introduce a new cause of action to the proceedings are not allowed. Having considered the submissions in this matter I agree that the proposed amendments will introduce a new cause of action in this matter which will prejudice the Defendants in that the matter will start all over again. For the reasons given the application for leave to amend is refused with costs to the Defendants. Leave granted to appeal. Costs to be taxed if not agreed. ” The question for determination of the court is whether the proposed amendment to the Writ of Summons and Statement of Claim as framed sought to introduce a new cause of action and whether the court should have granted leave to the Plaintiff to amend the Original Writ of Summons and the Statement of Claim. The learned trial Judge, in his ruling, found that the proposed amendments would introduce a new cause of action; which would J12 (212) prejudice the Defendants. For that reason, he refused the application to amend the Writ of Summons and the Statement of Claim. The trial Judge did not, however, state what the new cause of action would be that would have been introduced by the amendment. Order 20 rule 5(5) of the Rules of the Supreme Court that empowers a court to grant an amendment requested states as follows: “An amendment may be allowed under paragraph (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment. ” Again, Order 20/8/16 of the Rules of the Supreme Court, provides as follows “Adding or substituting new cause of action (r.5(2) and (5)) - The Court has power to grant or allow an amendment after the expiry of any relevant period of limitation notwithstanding that the effect of the amendment will be to add or substitute a new cause of action provided that J13 (213) the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment. ” Here at home, in the case of Zambia Consolidated Copper Mines Limited Vs. Joseph David Chileshe1, this court dealt with the issue of when amendment of a Writ of Summons and a Statement of Claim is available. In that case, among others, we held that:- “(i) An amendment may be allowed notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.” Our own Order 18 rule 1 of the High Court Rules provides that:- “The Court or a Judge may, at any stage of the proceedings, order any proceedings to be amended, whether the defect or error be that of the party applying to amend or not, and all such amendments as may be necessary or proper for the purpose of eliminating all J14 (214) statements which may tend to prejudice, embarrass or delay the fair trial of the suit, and for the purpose of determining, in the existing suit, the real question or questions in controversy between the parties, shall be so made. Every such order shall be made upon such terms as to costs or otherwise as shall seem just.” We have carefully examined the Original Writ of Summons and the Original Statement of Claim and compared it with the proposed Amended Writ of Summons and the Amended Statement of Claim. In all the documents, the issue is one of whether the sale of stand No. 10801, Lusaka was null and void. In our view, the proposed amendments do not bring up a new factual situation that is entirely different from that already disclosed in the original Writ and Statement of Claim. Indeed, the trial Judge did not state in his Ruling which of the proposed amendments created or introduced a new cause of action. Although the amendments to the Writ of Summons and the Statement of Claim were no doubt going to introduce more declarations as prayed, our view is that the said declarations were in no way going to introduce a new cause of action because the relief sought relates to the same facts. It is clear from the proceedings that the amendments sought were not in any way going to prejudice the Defendants. Indeed, allowing the amendments was J15 (215) going to be in the interests of justice as it sought to elucidate the facts in issue. We agree with the submission of Counsel for the Plaintiff that the nature of the proposed amendments was to cure the defects in the Writ of Summons and the Statement of Claim. In refusing leave to the Plaintiff to amend the Writ of Summons and the Statement of Claim, the learned trial Judge merely made a general observation without stating the new cause of action to be introduced by the proposed amendments. Equally, even if one adopted the position taken by the trial Judge that the proposed amendments introduced a new cause of action, on the established general principles for granting of leave to amend; the application should have been granted as the set of facts proposed to be relied on only amounted to a modification, development or variation of the claim already filed in the proceedings. The learned trial Judge wrongly refused the application as both our Order 18 rule 1, High Court Rule, Cap 27 and Order 20 rule 5 of the Rules of the Supreme Court, White Book empowered him to grant the leave requested by the Plaintiff. His refusal to grant leave was a misdirection in law. We grant the leave requested and order that the matter now proceeds to trial as amended. J16 (216) Both grounds one and two of Appeal must succeed. In the result, we allow the appeal with costs to be taxed in default of agreement. E. L. Sakala, CHIEF JUSTICE P. Chitengi S. S. Silomba SUPREME COURT JUDGE SUPREME COURT JUDGE