Original Concepts Limited and Anor v Nicholas Lostrom and Anor (APPEAL NO. 185/2007) [2013] ZMSC 94 (23 October 2013)

THE SUPREME COURT OF ZAMBIA APPEAL NO. 185/2007 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: ORIGINAL CONCEPTS LIMITED GERHARD KOEN AND NICHOLAS LOSTROM SOTIRIA LOSTROM 1 ST APPELLANT 2ND APPELLANT 1 ST RESPONDENT 2ND RESPONDENT CORAM: Mambilima, D. C. J, Silomba, Mwanamwambwa, J. J. S. On the 13th October, 2009 and 23rd October 2013. For the Appellant: Mr. N. Nchito of Messrs MNB Legal Practitioners For the Respondent: Mr. Tambulukani of Mess.rs Sharpe and Howard Legal Practitioners JUDGMENT Mwanamwambwa, JS, delivered the Judgment of the Court. Cases referred to: 1. Ibrahim S. Jasat V. Mohamed Wali Adam Patel (1978) Z. R. 208 (H. C.) J2 2. John Chisata V. Attorney General (1990/1992) Z. R. 15 Legislation referred to: 1. The High Court Rules, Cap 27 of the laws of Zambia, Orders 19 and 41 Rule (3) 2. The Immigration and Deportation Act, Chapter 123 of the Laws of Zambia, Section 19(2) 3. The Supreme Court Practice Rules, 1999, Order 24 rules 7, 12, 13. Other works referred to: 1. Atkins Court Forms, 1998 Edition at paragraph 35. When we heard this Appeal, Hon. Mr. Justice S. S. Silomba was part of the Court. He retired and later passed away. Therefore, this Judgment is by the majority. This is an Appeal against the Ruling of the High Court, dated 24 th November, 2006. By that Ruling, the Learned trial Judge dismissed the Appellants' action for want of prosecution. The reasons given by the Learned trial Judge were that the 2 nd Appellant J3 had failed to comply with the Courts order to produce specified documents. The brief facts of the matter are these: on the 28 th of February, 2005, the Appellant commenced an action in the High Court against the Respondents , for; 1. Damages for fraudulent or negligent or misrepresentation or alternatively damages for breach of warranty; 2. An order directing the Defendants to pay the said sum of K183,143,201.44(old currency) together with all accruing interest and penalties; 3. Exemplary damages; Interest; and 4. 5. Costs. The Learned trial Judge made Orders for Directions. The Orders for Directions were complied with by the Appellants. The Respondents did not meet the deadline for filing their documents. On the 5 th of October, 2005, the Respondents made an application to the Court for an order of production of documents by the 2 nd Appellant. The application was made pursuant to Order 24 Rule 12 of the Supreme Court Practice Rules , 1997 Edition. The documents requested to be produced were; 1. Copy of Self Employment permit; and J4 2. Documentary proof of investment of US$ 35,000.00 into the 1st Appellant Company by the 2nd Appellant. 3. Proof of payment by the 2 nd Plaintiff of amounts in annexure A of the agreement between the 2 nd Plaintiff and the Defendants. On the 16 February, 2006, the Learned trial Judge ordered the Appellants to produce the following; 1. The 2nd Plaintiffs Self Employment Permit; 2. Documentary proof that the 2nd Plaintiff has invested US$35,000 into the 1st Plaintiff Company as required by Immigration Laws of Zambia; and 3. Proof of payment by the 2nd Plaintiff of amounts in annexure A of the agreement between the 2nd Plaintiff and the Defendants. In light of the above order, the Appellants filed a supplementary bundle of documents on the 18th of April, 2006. The supplementary bundle included the Employment Permit and other documents showing money credited to the 2 nd Appellant. On the 26 th of May, 2006, the Respondents took out summons and supporting affidavit, for an order that the Appellants' action be dismissed for want of prosecution. The application was made pursuant to Order 41 Rule (3) of the High Court Rules, Cap 27 of JS the laws of Zambia. Before a Ruling could be delivered, the Appellant filed a 2 nd supplementary bundle of documents on the 11 th July, 2006 , where they exhibited more documents to show that the 2 nd Appellant had invested US$35,000.00 into the 1st Appellant Company. On the 24 th of November, 2006, the Learned trial Judge delivered a Ruling on the application to dismiss the action for want of prosecution. The Learned trial Judge stated in his Ruling, that: "I have considered the Affidavits filed herein, the submissions of Counsel and the authorities I have been referred to. This is a Commercial matter and is therefore Judge driven. In a Commercial matter which is Judge driven, an application like this one before me, can only succeed if the other party has deliberately or wholly failed to comply or follow a Court's order or direction. In the application before me, the defendant seeks an order to dismiss the action for want of prosecution because the Plaintiff has failed to comply with the order of discovery granted by the Court. The order of the Court which incidentally has not been challenged was specific in its directions... The Defendants position is that the order has not been complied with. I have considered the submissions and the Affidavits on record and I do agree that the Plaintiff has failed to comply with the order. I find that the self employment permit produced is an expired permit and not a valid permit. There has been no proof produced of investment of US$35,000.00 into the 1st Plaintiff Company by the 2nd Plaintiff. In the case of China Henan Int. V. Mwange Contractors (2002) Z. R at p. 30 the Supreme Court said that and I quote 'the new dispensation in commercial matters is that parties must place their cards on the table early in the litigation to assist in narrowing issues of contention and for real issues in the dispute to surface.' In my view, the Plaintiff has failed to place his cards on the table as required in Commercial actions. Accordingly, in terms of Order 41 rule 3 of the High Court Act, Chapter J6 27 of the Laws of Zambia under which the application is made, the Plaintiffs action is dismissed for want of prosecution with costs to the Defendants." Dissatisfied with the above Ruling, the Appellants appealed to this Court. There are two grounds of appeal in this matter, and these are; 1. That the Court below erred when he found that the 2nd Appellant failed to place his cards on the table and dismissed the action. 2. In the alternative, the Court below erred when he held that the documents furnished by the Appellants were not adequate or sufficient to meet the order for discovery. We shall deal with both grounds of appeal at the same time as the issues are interrelated. On behalf of the Appellants, Mr. Nchito submitted that the Appellant did in fact furnish the documents required. That the e mandate of the Court as provided by Order 41 rule 3 is not to look at the contents of the documents but at whether the documents have been furnished in compliance with the order. He went on to state that the sufficiency or otherwise of the documents is a matter that goes to the merits of the main action and a basis on which the Court shall, following the full trial of the matter, base its final Judgment. That dismissal of the action would have been warranted had the documents requested for not been furnished. That J7 sufficiency or otherwise of the contents of the documents is a matter that ought to have been reserved for trial. That the 2 nd Appellant had placed his cards on the table and the Respondents would not have been in any way taken by surprise at trial, nor would an injustice have been brought upon them. He cited the case of Ibrahim S. Jasat V. Mohamed Wali Adam Patel (1978) Z. R. 208 (H. C.) in support of his argument. e He submitted that the Employment Permit was not relevant to the proceedings. He added that the documents furnished were sufficient to meet the Order for discovery. In response, Mr Tambulukani submitted that the claim in the court below was anchored on specific performance of a memorandum of understanding between the 2 nd Appellant and the Respondents. That the claim for specific performance is an equitable remedy. That the principles of equity demand that he who comes to equity must come with clean hands. That in order for the Appellants to sustain their claim, it was necessary that they prove that they had fulfilled their obligations under the memorandum of understanding. He argued that Section 19(2) of the Immigration and Deportation Act, Chapter 123 of the Laws of Zambia, prohibits a J8 person from engaging 1n any business or occupation without an employment permit. That the 2 nd Appellant had no valid Employment Permit from the Immigration Department. He went further to argue that the application for specific documents to be produced, made by the Respondent in the Court below, was meant to make the Appellant place his cards on the table in light of the Respondents application. He cited Order 24 rule 7( 1) and rule 12 of the Supreme Court Rules, 1999, in support of his argument. He submitted that Order 41 rule 3 of the High Court Rules, Cap 27 of the Laws of Zambia merely provides the consequence if a party fails to comply with an order of the Court. That in relation to the mandate of the Court in considering whether to order production of documents or not, Order 24 rule 13 of the Supreme Court Rules, 1999, was in point. He added that Order 24 rule 2 of the Rules of the Supreme Court, 1999, places a continuous obligation to give discovery. He stated that the 2 nd Appellant failed to comply with the order for production by producing an expired employment permit. That the 2 nd Appellant failed to produce documents to prove the investment of US$35,000.00 in the 1st Appellant Company, as well as to show that he had paid off the amount he undertook to pay in the memorandum of understanding. That this failure by the 2 nd J9 Appellant meant that he failed to place all his cards on the table. He argued that the Court has inherent power to dismiss an action, on the application of the Defendant, on grounds that the Plaintiff has not complied with an order of the Court. He cited the Learned authors of Atkins Court Forms, 1998 Edition at paragraph 35 in support of his argument. We have considered the evidence and submissions from both - parties. The Respondents' argued that the claim by the Appellant in the lower Court was anchored on specific performance. We have looked at the claim in the lower court and do not find anywhere where the Appellants claimed specific performance. The only other way the Court can know what a claim is anchored on, would be if the Court heard the whole matter on its merits. We believe that the decision, as to what a claim is anchored on, can only be determined when all the evidence in a matter has been laid down. We agree with the principle on equity that 'he who comes to equity must come with clean hands'. However, we do not think that it applies in this case. e We come to the issue of the employment permit. From the evidence, it is clear that the 2 nd Appellant was granted an employment permit when he came to Zambia. We believe that for that Employment Permit to have been issued, the 2 nd Appellant JlO complied with the requirements for the issuance of the permit. This permit had however expired at the time the Learned trial Judge ordered its production. The Learned trial Judge ordered that the 2 nd Appellant produces his employment permit and found that the permit had expired. The expired permit is what he had. We do not see why the production of an expired permit was going to ambush the Respondents. The Respondents would have known that the 2 nd Appellant had an expired permit and not a valid one. This is because there is no other information about the permit except the - fact that the permit is expired. We do not see how this becomes an ambush. In any case, the evidence on record shows that the 2 nd Appellant produced the documents he thought the order of the Court was asking him to produce. There is nothing wrong with what he did because he produced what he had. He could not have produced what he did not have. Upholding the lower Courts decision would mean that a person holding an expired employment permit, or who produces documents he believes are the ones required by the Court, when in fact not, would not be entitled to justice in any court of law. We believe that the transactions in dispute happened at a time when the permit in dispute was valid. Therefore, the 2 nd Appellant is entitled to be heard in the matter despite having an expired permit. e Further, an employment permit 1s renewable. The Immigration and Deportation Act, Cap 123 of the Laws of Jll Zambia, allows the 2 nd Appellant to apply for a renewal of his employment permit. The fact that it is a renewable document means that the permit is liable to expire one day. What matters is that he complied with the requirement for its issuance at the beginning and that he continues to adhere to the conditions given by the Immigration Authorities, one of which is to apply for its renewal when it expires. The Learned trial Judge ordered the production of the documents in question which the 2 nd Appellant produced in the supplementary bundle of documents and the 2 nd supplementary bundle of documents. We are of the view that the court should not have gone on to determine whether these documents actually show that there was investment of US$35,000.00 and compliance with the memorandum of understanding. The determination made by the court should have been left for the main matter as the documents produced where the ones which the 2 nd Appellant had. The Respondents referred this Court to Order 24 Rules 7, 12 and 13 of the Supreme Court Practice Rules, 1999 . We have examined them and have found that they do not apply in the case at hand. Rule 7 provides that: "(1) Subject to rule 8, the Court may at any time, on the application of any party to a cause or matter, make an order requiring any other party to make an affidavit stating whether any document specified or described in the J12 application or any class of document so specified or described is, or has at any time been, in his possession, custody or power, and if not then in his possession, custody or power when he parted with it and what has become of it. (2) An order may be made against a party under this rule notwithstanding that he may already have made or been required to make a list of documents or affidavit under rule 2 or rule 3. (3) An application for an order under this rule must be supported by an affidavit stating the belief of the deponent that the party from whom discovery is sought under this rule has, or at some time had, in his possession, custody or power the document, or class of document, specified or described in the application and that it relates to one or more of the matters in question in the cause or matter." From the above, it is clear that the rule is supposed to be applied when requesting for specified documents. In the case before us, the only specified document requested for was the Employment Permit, which was produced by the Appellant. The other documents requested for were not specified. The order simply required the 2 nd Appellant to produce documents to prove that he had invested US$35,000 in the 1st Appellant Company and that he had met his obligations under the memorandum of understanding between himself and the Respondents. In our view, the above is fishing for the proof. It does not specify what documents are to be produced. Order 24 rule 7 requires the deponent to show that the party from whom discovery is sought, has or at some time had, in his possession, the document specified in the application. This was not done in this case. J13 Rule 12 provides that: "At any stage of the proceedings in any cause or matter the Court may, subject to rule 13(1), order any party to produce to the Court any document in his possession, custody or power relating to any matter in question in the cause or matter and the Court may deal with the document when produced in such manner as it thinks fit." The above rule does not apply in the case before us. This order - does not relate to discovery of documents by parties. It refers to production of documents to the court only. Rule 13 provides that: "(1) No order for the production of any documents for inspection or to the Court, or for the supply of a copy of any document, shall be made under any of the foregoing rules unless the Court is of opinion that the order is necessary either for disposing fairly of the cause or matter or for saving costs. (2) Where on an application under this Order for production of any document for inspection or to the Court, or for the supply of a copy of any document, privilege from such production or supply is claimed or objection is made to such production or supply on any other ground, the Court may inspect the document for the purpose of deciding whether the claim or objection is valid." This order applies in cases where there is a claim of privilege or other objection to the production of documents. The rule allows the Court to order the production of the documents to itself so that J14 the Court inspects the documents to determine whether the objection to its production is valid. There was no such claim in this case. We find that order 24 rule 12, relied upon by the Respondents in the application for discovery, only applies to production to the court and not for discovery between parties . Further, the Respond en ts in their arguments kept referring to e Order 24 of the Rules of the Supreme Court, 1999 . They argued that order 41 of the Rules of the High Court merely provides the consequence if a party fails to comply with an order of the Court. We do not agree with this argument by the Respondents. Order 41 rule 3 of the High Court Rules , Cap 27 of the Laws of Zambia, provides as fallows: "If any party fails to comply with any order to answer interrogatories, or for discovery or inspection of documents, he shall be liable to attachment. He shall also, if a plaintiff, be liable to have his action dismissed for want of prosecution, and, if a defendant, to have his defence, if any, struck out, and to be placed in the same position as if he had not defended, and the party interrogating or requiring discovery or inspection of documents may apply to the Court or a Judge for an order to that effect, and an order may be made accordingly." From the above , it is clear that our own Rules are sufficient on enforcement of orders. The rule provides when to make the application to dismiss an action for want of prosecution. The above Rule, apart from providing instances when it can be applied, also JlS provides the penalty . There is no need to go to the Rules of the Supreme Court, 1999 , when our Rules are adequate on the issue . Therefore Order 19 and 41 of the High Court Rules , Cap 27 of the laws of Zambia are adequate . Further, this Court held 1n the case of John Chisata V. Attorney General (1990/1992) Z. R. 15 that "The best course in nearly every case is to allow the whole matter to come to trial and to leave it to the trial Judge to decide what claims are sustainable ... We cannot stress too strongly what we have said in the past, that such cases should wherever possible, and where there is no prejudice to either party by some irregularity, be allowed to come to trial so that the issues may properly be resolved. Interlocutory orders which prevent this should be avoided." This appeal arose from a commercial matter. Commercial matters are Judge driven so that they are disposed of quickly. Interrupting court proceedings using interlocutory orders lengthens the time taken to dispose of matters. In commercial matters , this defeats the whole purpose of quickening matters . From the above , we are of the view that the Learned trial Judge should have allowed the matter to go to trial and determine the matter on its merits . There was no prejudice which the Respondents would have suffered as a result of the documents that were produced by the Appellant. The Appellants complied with the order issued by the Judge.