Astro Holding Limited and Ors v Arm Secure Limited (CAZ/08/358/2023) [2023] ZMCA 395 (25 October 2023)

IN THE COURT OF APPEAL FOR ZAMBIA HOLDEN AT LUSAKA (CIVIL JURISDICTION) CAZ/08/35 8/2023 BETWEEN: 1st Applicant 2nd Applicant 3rd Applicant Respondent For the Applicants: Mr. G. Mileji of Messrs Malambo & Company A or the Respondent: Mr. Y. Yosa ofMessrs May & Company RULING Legislation referred to: 1. Court of Appeal Act, No. 7 of 2016 Cases cited: 1. Sonny Paul Mulenga and Vismer Mulenga and Chainama Hotels Limited and Elephant Head Limited v Investrust Bank Limited (1999) ZR 1 OJ 2. Wilson v Church (N. 438) (1879) 12 Ch. D 454 3. Sir John Donaldson M R. in Rosengrens v Safe Deposit Centres Limited (1994) EWCA CivJ0517-3 4. National Industrial Credit Bank v Aquinas Francis Wasike. Civil Appeal No. 54 of 2007 5. A. Ml v Peggy Chibuye (1992) ZR 50 Rl 6. Ace Audit Express (Z) Limited v Africa Feeds Limited (2009) ZR 1 7. Nyampala Safari Zambia Limited v Zambia Wildlife Authority and Others (2004) ZR 49 8. Masauso Zulu v Avondale Housing Project Limited (1992) ZR 172 9. Zambia Revenue Authority v Post Newspaper Limited (Appeal No. 36 o/2016) [2016} ZMSC 182 (13 June 2016) JO. Attorney General v Marcus Kampumba Achiume (1983) Z. R. 1 This is a ruling on an application to stay further execution of judgment of the High Court of 11 July 2023 pending hearing and determination of the appeal. The application was brought by the applicants by way of ex-paite summons on 11 September 2023 accompanied by an affidavit in support of even date. The affidavit in suppo1i of application was sworn by Nikita Sanmukh Patel, a director in the applicants who deposed that following the delivery of the judgment by the High Court and the dissatisfaction of the applicants (the appellants in the appeal) with the said judgment, they brought an appeal to this Court on 11 July 2023. That even though an appeal does not operate as a stay of execution, the filing of an appeal entailed that litigation in relation to the dispute between the parties has not ended and that it is necessary to grant a stay of execution of said judgment to ensure that the appeal is not rendered nugatory or prejudice the applicants. That the applicants sought to stay the judgment in the High Court, but it was declined by the High Court on 7 September 2023. That the applicants are desirous of having the appeal determined and have since filed a record of appeal under Appeal No. 274/2023. The deponent stated that the appeal has real prospects of success as it raises legal issues. R2 The respondents filed an affidavit in opposition on 29 September 2023, sworn by Dirk Kotze the Managing Director in the respondent. He deposed that the High Couit had dismissed the application to stay execution of its judgment on the basis that the said appeal had no prospects of success hence the renewed application before this Court. He further stated that the appeal pending before Court has no prospects of success because in awarding the respondent the reliefs sought in the Court below, the High Court relied on unrefuted evidence that clearly demonstrated that the 1st applicant admitted to being indebted to the respondent in the sum of ZMWl 0,439,690. The deponent contended that the appeal seeks to challenge findings of fact made by the trial Couit which findings where neither perverse nor made in the absence of any relevant evidence. Further, that the law on limitations is clear and the trial Court con-ectly determined the applicant's counterclaim in accordance with the guiding law. The respondent further submitted that it had been kept out of its money as far back as 2016 and it would be unjust that it be denied the enjoyment of the fruits of its judgment based on an appeal that it doomed to fail. The respondent also alleged that the applicants have not shown any evidence that if the money adjudged as due to the respondent is paid, the applicants would not be able to recover it if their appeal succeeded. That if a stay of execution is granted, the respondent would be severely prejudiced as it will continue to be kept out of its money that it intended to channel to other investments. That it was the deponent's belief that this was not a proper case in which to grant a stay of execution of judgment pending appeal. R3 The applicants filed an affidavit in reply on 6 October 2023 sworn by the said Nikita Sanmukh Patel indicating that contrary to the respondent's asse1tion, the alleged amount of ZMWl0,439,690 was and still remains contested. That the applicants also counterclaimed the amount which was owed to it far more than the amount which was being claimed by the respondent. That the trial Court omitted to take into account the sum of money paid by the applicants to the respondent. The deponent further stated that apa1t from challenging the finding by the trial Com1, the Judge went against the explicit position of the law and decided to uphold the limitation clause despite finding that that the respondent's employees were involved in theft and accordingly the challenge in the appeal is also on this point of law. That the trial Court instead based its decision on negligence when what the employees of the respondent were doing amounted to theft and the said thefts could only be established after they were convicted in June 2017 which period was within the statute of limitation. The applicants contended that it is in fact them that have been kept out of their money due to thefts by the respondent's employees. That the onus was in fact on the respondent to demonstrate that if money was paid to it, the same can be repaid upon reversal by the Court of Appeal. That it is the applicant who would stand to suffer if the Court of Appeal was to allow the appeal and the respondent's amounts would continue to earn interest and no prejudice would result to the respondent if stay was granted. The applicants repeated that this is a proper case to grant the stay of execution being sought by them. R4 The applicants were initially granted an ex-parte order of stay of execution pending an inter-parte hearing. The matter came up for inter-parte hearing on 19 October 2023. The applicants were represented by Mr. G. Mileji of Messrs Malambo and Company while the respondent was represented by Mr. Y. Yosa of May and Company. Counsel for the applicants relied on the arguments filed before Court on 11 September 2023 and 6 October 2023 respectively. The gist of the applicants' submissions was that the Court is required to preview the prospects of an appeal succeeding in considering an application for a stay of execution. He relied on the case of Sonny Paul Mulenga and Vismer Mulenga and Chainama Hotels Limited and Elephant Head Limited v Investrust Bank Limited 1 for this argument among other authorities. Counsel also relied on the case of Wilson v Church2 to submit that the Court must be mindful that if the appeal is successful, it is not rendered nugatory by failure to stay the execution the High Court judgment. Counsel also relied on the case of Sir John Donaldson M. R. in Rosengrens v Safe Deposit Centres Limited3 where it was established that the Comt must ensure that the rights of litigants are preserved pending appeal without giving undue advantage to the one party or prejudicing the other. The applicants also argued that if the respondent executes the High Court Judgment or pays the Judgment sum, the respondent may not be able to repay the applicants if the said Judgment is reversed on appeal given the very high prospects of the appeal succeeding. He referred the court to the case of National Industrial Credit Bank v Aquinas Francis Wasike4 were the Kenyan Comt of Appeal held that: RS 'This court has said before and it would bear repeating that while the legal duty is on an applicant to prove the allegations that an appeal would be rendered nugatory because the respondent would be unable to pay back the decretal sum, it is unreasonable to expect such an applicant to know in detail the resources owned by a respondent or the lack of them. Once an applicant expresses a reasonable fear that the respondent would be unable to pay back the decretal sum, the evidential burden must then shift to the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge. ' The applicants also argued that they have demonstrated how the trial Comt made findings of fact which were not supported by evidence adding that the Appellate Court is likely to interfere with said findings hence the appeal's prospects of success. The applicants also argued that the trial Court inconectly upheld the limitation clause which was a point of law. The applicants argued that the trial Court found as matter of fact that the respondent's employees were stealing. Counsel refened Court to the case of A. M. I. v Peggy Chibuye5 where the Supreme Court held that: 'On the fact, we do not see how the Appellants could have exemption from their own wrongdoing by the conduct of their stuff. "At owners' risk" in the circumstances would have to exclude wrongdoing and conduct of the party seeking exemption and that of his stuffs.' R6 They also went on to rely on the Supreme Court holding in the case of Ace Audit Express (Z) Limited v Africa Feeds Limited6 were it was held that: 'A person cannot use an exemption or limitation clause in order to escape liability arising from his own wrongdoing, or misconduct or part of their employees. ' The respondent's counter arguments were that justice demands that a successful litigant should be entitled to the immediate enjoyment of the fruits of a judgment. That the applicants must demonstrate good and convincing reasons to justify the grant of an order for stay as was held by the Supreme Comt in the case of Nyampala Safari Zambia Limited v Zambia Wildlife Authority and Others. 7 That the applicants have not demonstrated good reasons for grant of stay as they have not furnished any realistic prospects of the appeal succeeding. The respondent further relied on the case of Masauso Zulu v Avondale Housing Project Limited8 to augment that the Court of Appeal is unlikely to reverse finding of fact made by the trial Court as the said findings by the trial Comt were neither perverse nor based on a misapprehension of facts before Court. That it was an established fact that the l51 applicant admitted its indebtedness to the respondent in the sum of ZMWl 0,439,690. Fmther, the respondent argued that the applicants' claim for loss as a result of the theft that occuned in 2014 was statute barred both in contract and in tort. That it was further established by evidence in the lower Comt that the parties had agreed to limit the respondent's liability to ZWM2,500 even though the applicants had failed to prove that any loss was suffered as a result of the theft R7 nor to provide a list of goods allegedly stolen. That considering that the appeal is premised on challenging findings of fact already established by evidence on record, the prospects of the appeal succeeding are very dim. I have considered the affidavit evidence and skeleton arguments filed by the parties as well as the submission of Counsel at the hearing. By this application the applicants seek a stay of execution of the judgment ofMbewe, J of the High Court of 11 July 2023. The chief contention of the applicants is that the application to stay of execution of the Judgment ought to be maintained as the appeal raises legal issues for consideration and that the same has high prospects of succeeding. In determining the same, I seek recourse to the provisions of Section 13( 4) of the Court of Appeal Act which imputes that leave to appeal shall not operate as a stay of execution of Judgment. The implication is that though an appeal pends before this Court, it is not automatic that stay of execution of Judgment appealed against must be sustained. In the case of Zambia Revenue Authority v Post Newspaper Limited,9 the Supreme Court guided on the principles to be considered when deciding whether to grant a stay when it stated that: "Where a judgement or ruling is stayable, the principles state that a stay of execution pending appeal, is a discretionary remedy. A party is not entitled to it as of right. And such discretion must be exercised judiciously and on well-established principles. Firstly, the successful party should not be denied the immediate enjoyment of a judgment R8 unless there are good and sufficient grounds. Stay of execution should not be granted purely on the sympathetic or moral consideration. Secondly, in exercising its discretion, whether to grant a stay or not, the Court is entitled to preview the prospects of the proposed appeal ... We wish to emphasize that the prospects of the pending appeal, is a key consideration, in deciding whether to stay execution of the Judgment appealed against. " Similarly, the Supreme Cou1t guided in the Sonny Paul Mulenga and Vismer Mulenga and Chainama Hotels Limited and Elephant Head Limited v Investrust Bank Limited case that for a stay of execution to be granted, a party needs to satisfy a Court that it is necessary to stay a Judgment pending appeal and that in deciding an application for a stay pending appeal, a Cou1t is entitled to preview the prospects of the proposed appeal. The Supreme Comt also stated in the case of Nyampala Safaris Zambia Limited and Others v Zambia Wildlife Authority, that a stay of execution must only be granted on good and convincing reasons and that the applicant must clearly demonstrate the basis on which the stay should be granted. The foregoing authorities illustrate that the general principles are that a stay of execution is a discretionary remedy, and a party is not entitled to it as a matter of right. A successful party ought not to be denied the frnits of its Judgment unless the applicant demonstrates satisfactory reasons for the Court to do so. Also, a key consideration when deciding this application is for the Court to be able to review the grounds of appeal to determine whether the appeal has good R9 prospects of success to warrant the granting of a stay. The consideration of whether the grounds of appeal disclose prospects of success must only be done on face value without delving into the merits and risking prejudicing the appeal. In this regard, I have previewed the grounds of appeal pending determination before this Court, with a view to assess its prospects of success, the basis upon which this application is sought to be granted. A review of the memorandum of appeal filed on 18 July 2023 shows the applicants' grounds of appeal as follows: 1. (i) The Coutt below e1Ted in law and in fact in finding that the loss as a result of theft was statute barred. (ii) The Court erred in refusing to find for the appellants by stating that the findings for the Appellants on account of theft would be tantamount to seek to enforce judgment; 2. The Comt erred in law in finding that imputation of negligence when what happened is theft and thereby conversion by the respondent through its employees; 3. The Court below erred both in law and fact when, having found the respondent's employees to have misconducted themselves through theft of appellant's property, it gave effect to the limitation/exception clause; 4. The Court below ened both in law and in fact in granting the sum of ZMW8,455,157.80 to the respondent without due regard to the amount which was paid to the respondent and the loss which the respondent caused to the appellants; R 10 5. The Com1 below erred in law and in fact in holding that the statement of account for the period January 2015 to September 2015 on page 14 to 16 of the plaintiffs Bundle of Documents shows payment paid to 3rd Defendant (3 rd appellant) which correspond with invoices on page 27, 28, 29, 30, 32, 33, 34 and 39 of the Defendant's Bundle of Documents when no such correlation exists; 6. The Court below erred bot in law and in fact by finding that the terms of unsigned and oral contract in the same as the executed contract of 2nd July 2025 contrary to the letter dated 27th July 2012 and the respondent's pleadings;. 7. The Court below erred in law and fact in: (a) Holding that the 1st Appellant failed to meet its contractual obligations when the appellants were owed money by the respondent; (b) In law in granting damages for breach of contract when the appellants were owed by the respondent; ( c) In granting interest when the appellants were owed 8. The Court below erred in law in refusing to grant the appellants damages despite the acceptance of theft by the respondent's employees and also accepting that there were amounts outstanding for the appellants; and Rll 9. The Court below erred both in law and in fact in failing to enter judgment on admission in favour of the appellants by failure to specifically traverse the appellants counterclaim by the respondent. A critical examination of the said grounds reveals that the applicants counterclaim fell for consideration before the trial Court based on want of jurisdiction ousted by the statutory bar limitation of actions. This is in itself an issue of fact. The rest of the grounds equally seek to challenge the findings of fact made by the trial Comt. It has been a well-entrenched principle in this jurisdiction that an appeal comt will not interfere with findings of fact made by a trial judge unless it is satisfied that the findings in question were either perverse or made in the absence of any relevant evidence or upon a misapprehension of the facts or that they were findings which, on a proper review of the evidence, no trial court acting correctly can reasonably make. This position was also echoed by the Supreme Comt in the case of Attorney General v Marcus Kampumba Achiume. 10 It is evident that the pending appeal raises mainly issues of fact which the Appellate Court is highly unlikely to interfere with. Further, from the evidence before me, I find that the applicants have not furnished good and sufficient grounds to justify the exercise of my discretion to grant a stay of execution. In view of the foregoing, it would be prejudicial to prevent the respondent from enjoying the fruits of its Judgment while the appeal pends. In the circumstances, the application is declined, and the earlier ex-paite order of stay is accordingly discharged fmthwith. R 12 The costs of this application to be borne by the applicants, in default of agreement to be taxed. Dated at Lusaka this 25 October 2023 ~ 4e-Phiri r-- COURT OF APPEAL JUDGE Rl3