Panicco Engineering Limited v Marks Industries Limited (Appeal No. 292/2022) [2024] ZMCA 241 (10 September 2024)

IN THE COURT OF APPEAL OF ZAMBIA Appeal No. 292/2022 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: PANICCO ENGINEE AND MARKS INDUSTRIES LIMITED RESPONDENT CORAM : Siavwapa JP, Chishimba, and Patel JJA On 26th March, 2024 and 10th September, 2024 For the Appellant: Mr. A. Chile she of Messrs. Kasama Chambers For the Respondent: Mr. R. Nkhata of Messrs. Nyirongo & Co. JUDGMENT CHISHIMBA JA, delivered the Judgment of the Court. CASES REFERRED TO: 1) Waterwells Limited v Wilson Samuel Jackson (1984) ZR 98 2) Harley v Samson ( 1914) 30 TLR 450 3) P~emooa-Bhai Megan Patel v Rephidim Institute Limited (2011) 1 ZR 4) Chiyengele & Others v Scaw Limited SCZ Appeal No. 177 of 2013 5) Isaac Tantameni C. Chali (Executor of the Will of the Late Mwalla Mwalla) v Liseli Mwala (Single woman) ( 1995 - 1997) ZR 199 6) Evans v Bartlam (1973) A. C 473 7) Standard Chartered Ba1?-k PLC v Nthanga and Others Appeal No 2 of LEGISLATION CITED: 1) The High Court Rules Chapter 27 of the Laws of Zambia. 2) The Rules of the Supreme Court of England, 1999 Edition. J. 2 OTHER WORKS CITED: 1. Matibini, P. (2017) . Zambian Civil Procedure: Commentary and Cases. Volume 1 1.0 INTRODUCTION 1. 1 This is an appeal against the ruling of Madam Justice Y. Chembe as she then was, dated 22nd July, 2022. The Court below found that the action by the appellant against the respondent could not have been dealt with separately. On that basis, she set aside the Judgment in Defa ult of appearance and defence, the ensuing Judgment on assessment and the writ of fieri facias issued by the Learned Registrar. 2.0 BACKGROUND 2.1 The Road Development Agency contracted the Inyatsi Roads Zambia Limited and the respondent as its agents. The said agents embarked on road construction works on Mufulira Mokambo Road and created a road diversion through Farm No. 40 16 belonging to the appellant. The appellant alleged that extensive damage was occasioned to the landscape. 2 .2 On 4 th September, 2019, the appellant commenced an action by writ of summons and statement of claim against the Road Development Agency (hereinafter referred to as 'RDA'), Inyatsi Roads Zambia Limited and Marks Industries Limited J. 3 (the respondent herein) who were 1st, 2 n d and 3 rd defendants respectively. The appellant sought damages for trespassing and illegally of diverting the road, and creating of a burrow pit in the appellant's Farm No. 4016, Mufulira. 2.3 The 1st and 2 nd defendants filed defences to the action on 16th October, 2019 and 6 th November, 2019 respectively. The respondent did not file a defence. Consequently, on 11 th November, 2019, the appellant entered Judgment in Default of appearance and defence against the respondent for damages to be assessed by the Deputy Registrar. 2.4 On 2 n d December, 2020, the Learned Deputy Registrar delivered his Judgment on assessment in the sum of K7,700,000.00 with costs . A writ of fieri.facias was issued on 26 th May, 2021 followed by a writ of elegit. 2.5 Meanwhile, the matter proceeded to trial in respect of the 1st and 2 n d defendant. Judgment was delivered on 21 st March, 2021, in which the Court below dismissed the action on the basis that the appellant had not adduced sufficient evidence to prove that the 1st defendant was liable to pay compensation pursuant to section 48 (4) of the Public Roads Act. Equally the Court below dismissed the claim against the 2 nd defendant for not having been proved. J. 4 3 .0 APPLICATION TO SET ASIDE DEFAULT JUDGMENT 3.1 The respondent upon becoming aware of the Judgment of the Court below dismissing the claim against RDA and Inyatsi Roads Zambia Limited, issued summons to set aside the Default Judgment against it. 3.2 The basis for setting aside the Default Judgment is that it had been overtaken by the Judgment of the Court dismissing the whole case. That the whole case h aving been dismissed by the main Judgment, it was not proper for the appellant to fall back on the Default Judgment of 2019, thereby circumventing the Judgment of the Court dated 2 n d March, 2021. 3.3 The appellant opposed the setting aside of the De fau lt Judgment entered against the r espondent. The basis being that it was valid. That the respondent is bound by the Default Judgment having not taken any steps to have it set aside within reasonable time. 3.4 That the fate of the respondent was already d et ermine d by the aforesaid Default Judgment and as such , the respondent was not party to the proceedings upon which Judgment was pronounced. By virtue of not being a party to the proceedings, the interests of the respondent were not affected by the fin al J. 5 Judgment and that it was untenable for the respondent to now claim to be party to the said final Judgment. 3.5 Therefore, it could not be implied that in dismissing the appellant's action, the final Judgment automatically rendered the Default Judgment ineffectual. 3.6 In his r uling, the Learned Registrar considered the case of Waterwells Limited v Wilson Samuel Jackson (ll and reasoned that the respondent remained bound by the Default Judgment as long as it was not set aside. That the respondent neither filed a defence nor gave reasons for its failure to enter appearance. Therefore, the Default Judgment could not be set aside, there being no defence on the merits. On that basis, the Learned Registrar dismissed the application to set aside t h e Default Judgment. 4.0 APPEAL TO THE JUDGE IN CHAMBERS 4.1 Undeterred, the respondent filed a notice of appeal to a Judge in chambers advancing the following ground of appeal: "That the Learned Registrar erred in law and fact when he failed to set aside the Default Judgment entered against the respondent on 11 th November, 2019 despite there being a final Judgment delivered by the Court on 21 st March, 2021 dismissing the appellant's case." 5.0 DECISION OF THE COURT BELOW 5.1 In her ruling, the Learned Judge identified the issue for J. 6 determination as whether the Default Judgment entered against the respondent should be set aside in view of the Court's Judgment which dismissed the appellant 's action. In other words, could the appellant still proceed to execute the Default Judgment against the respondent despite having failed to succeed against the other defendants in the main action. 5.2 The Court considered the learned author Dr. Patrick Matibini, P. Zambia Civil Procedure: Commentary and cases supra at page 405 who states that: "If the claim against a Defaulting defendant can be dealt with separately from the claim against the others, the Court may enter Default Judgment against that defendant and a plaintiffls) may continue proceedings as against the rest. Where the claim against a Defaulting defendant cannot be dealt with separately from the claim against others, the Court will not enter Default Judgment, and it must deal with the application at the same time as it disposes." 5.3 The lower Court reasoned that the appellant's claim in the main action was founded on trespass allegedly occasioned by the 2 n d defendant and the respondent whose authority to rehabilitate the road arose from a contract with the 1st defendant, being RDA. Thus the liability of the 2 n d defendant and the respondent was dependent on finding the 1s t defendant liable for the alleged trespass. Therefore, the case J . 7 again st th e r esp onden t was intertwin ed with t h at of th e 1st d efendant wh ose case could not h ave been dealt with separately with out the respondent. 5 .4 Th e Court the n took the view that the Learned Deputy Registr ar should not have entered the Default Judgment until lia bility again st th e 1st defendant was established as the action against the resp ondent was not sever able. Therefore, it was n ot in the inter est of justice for th e Default Judgment to s ubs ist again st the respondent when the appellant's claim in the m a in action was d ismissed. 5.5 In this r egard, t h e Court below set aside the Judgment in Defau lt of app earance and d efen ce, the J u dgment on assessment, and the writ of fierifacias. 6.0 GROUNDS OF APPEAL 6. 1 Dissatis fied with t h e ru ling of t h e Court below, the appellant appealed advancing t h ree grounds as follows: 1) That the Honourable Judge e rred in law and in fact when she set aside the Judgment in Default of appea ranc e and defence as well as the Judgment on assessment and the writ of Ji.fa issued against the respondent oblivious of the fact that the respondent did not make the application to set aside the Default Judgment on time, neither did the respondent make appearance nor submit any defe nce on merit to warrant setting aside the Judgment in Default; 2) That the Honourable Judge in the Court below erred in law and in fact when in her ruling she seemed to have dispensed J. 8 3) with the respondent's need to defend the matter on the merits by stating that the case against the respondent was intertwined and could not have been heard separately from the 1st and 2 nd defendant; and 4) That the Honourable Judge in the Court below erred in law and in fact when in her ruling she failed to address the fact that the respondent had its own Judgment and was a non party to the trial that took place in the Court below and could not therefore, be allowed to benefit from a Judgment where it was a non-party to the Court proceedings. 7.0 APPELLANT'S HEADS OF ARGUMENT 7.1 Heads of argument dated 9 th December, 2022 were filed on behalf of the appellant. In ground one, the appellant contends t h at t he Default Judgment against the respondent should not h ave been set aside because the respondent did not make an application to h ave it set aside on time, neither did it enter appearance nor submit any defence on the merits. 7.2 It was submitted that the r espondent, without reasonable cause, failed to enter appearance and defence in the Court below. The application to set aside the Default Judgment was only made two and half years later in reaction to the writ of elegit for the residue after a writ of fifa was effected. 7.3 We were referred to Order 13/9/ 18 of the Rules of the Supreme Court of England (hereinafter referred to as 'RSC') which guides that the primary consideration in exercising the J. 9 discretion to set aside a Judgment on Default is whether the defendant has a defence on the merits to which the Court should pay heed, and the explanation of the defendant as to how the default occurred. That the application to set aside a Default Judgment must be made promptly and within a reasonable time as was held in Harley v Samson l2 l. That where the delay is coupled with prejudice being occasioned to the plaintiff or to a bona fide assignee of the Judgment debt, the Court may refuse to set aside the Judgment. 7.4 The appellant further referred to the cases of Waterwells Limited v Wilson Samuel Jackson (ll and Premesh Bhai Megan Patel v Rephidim Institute Limited l3 l on setting aside a Default Judgment. 7 .5 The appellant submitted that the respondent did not advance any reason at all for not entering appearance and filing a defence despite the Court process having been duly served on them. That in the absence of a defence, there was no means of determining whether or not there were prospects of success for the respondent's case. The setting aside of the Default Judgment has the potential to prejudice the appellant who has already seized the respondent's property for failing to settle the assessed amount. We were further asked to consider the inordinate delay of two and half years which is J. 10 unjustifiable . 7.6 In ground two, the appellant argues that the respondent, though contracted by the RDA, committed a trespass and illegally mined soil from the appellant's farm. Having committed its own transgression 1n relation to the construction of the road, it was imperative that the respondent put up a defence to the claims. That even assuming that the case was intertwined, there was still need for the respondent to enter appearance and defence. 7.7 That Order 12 rule 1(2) of the High Court Rules makes it mandatory for a defendant to enter appearance and defence once service of process has been duly effected. Failure to enter appearance and defence may result in the plaintiff entering final Judgment and execution without prejudice to his right to proceed with the action against those that have appeared. Having filed no defence, it can be concluded that the respondent actually had no defence at all. 7 .8 In ground three, the appellant argues that the Court below failed to appreciate that the respondent had its own Judgment, was a non-party to the trial, and therefore, cannot be allowed to benefit from a Judgment to which it was a non party to the Court proceedings. That the respondent is bound J. 11 • by the Default Judgment, whose effect, in terms of Order 13/0/ 10 of the RSC , is that "the defendant admits all the allegations in the statement of claim indorsed on the writ." The appellant further called in aid the case of Chiyengele & Others v Scaw Limited l4 l which held that Judgment in Default of appearance and defence entered in favour of the plaintiff, is final as to the right of the plaintiffs to recover damages to be assessed as it meant that the defendant had admitted having committed a legal wrong or injury against the plaintiffs. 7.9 The appellant submitted that the trial Court in its Judgment acknowledged that the respondent had not entered appearance and defence resulting in the Judgment in Default. Therefore, it was untenable that the respondent would now suddenly appear and claim to benefit from the said Judgment of the Court below. By not having participated in the Court proceedings, the respondent is precluded from enjoying the fruits of the final Judgment as per the Isaac Chali (Executor of the Will of the Late Mwalla Mwalla) v Liseli Mwala (Single woman) !5 1 case. 8.0 ARGUMENTS BY THE RESPONDENT 8.1 The respondent filed heads of argument dated 5 th January, J. 12 2023 . It was submitted that the Court has power under Order 20 Rule 3(8) of the High Court Rules and Order 13 Rule 9 of the Rules of the Supreme Court of England to set aside any Judgment by Default upon such terms considered appropriate. The purpose of the discretionary power to set aside a Default Judgment being to avoid injustice which may be caused. The case of Evans v Bartlam 161 was cited to support the contention that the Default Judgment was not a Judgment on merit and that the parties' right were not fully determined. 8 .2 The respondent contends that the basis upon which it sought to set aside th e Default Judgm ent in the Court below was the Judgment dated 2 nd March 2021 delivered by the Court dismissing the appellant's claim. The Judgment is on merit and established the rights of parties. The claim in the Court below depended on first establishing liability against the 1st defendant (RDA) and holding the others jointly liable. 8.3 The fact that the appellant's case was dismissed entails that there is a defence on the merits available to the respondent. Therefore, it will b e unjust not to set aside the Default Judgment merely on procedure technicalities. The case of Standard Chartered Bank PLC v Nthanga and Others (7 l which gave effect to Article 118 (2)(e) of the Constitution J. 13 of Zambia (Amendment) Act No 2 of 2016 was cited on undue regard to procedural technicalities. 8.4 In response to ground two, the holding that the case against the appellant was intertwined and could not be heard separately from the 1st and 2 n d Defendants, Counsel submitted that the liability of the 2 n d and 3 rd Defendant was dependent on first establishing liability of RDA the 1st Defendant. 8.5 The respondent's position being that the Default Judgment should not have been entered in the first place without establishing liability of RDA. Order 19 / 7 / 6 of the Rules of the Supreme Court was cited in addition to Zambian Civil Procedure: Commentary and cases by Dr. P. Matibini. 8.6 In response to ground three, reliance was placed on the above cited authorities. That the Default Judgment should not have been entered against the respondent before the matter was concluded against the other parties that proceeded to trial. It was prayed that the appeal be dismissed with costs . 9.0 ANALYSIS AND DECISION OF THE COURT 9.1 We have considered the appeal, the authorities cited and the arguments advanced by Learned Counsel. It is not in dispute that the respondent, (3 rd defendant) failed to enter appearance and defence after it was duly served with the writ J. 14 of summons and statement of claim. The appellant subsequently applied for and the Deputy Registrar entered Judgment in Default of Appearance and Defence against the respondent. Damages for trespass was awarded subject to assessment. 9.2 The Deputy Registrar assessed damages in the sum of K7, 700,000.00 and awarded costs. A writ of fieri facias was subsequently issued, followed by a writ of elegit for the residue after writ of fierifacias. Meanwhile, trial of the matter proceeded in respect of the 1st and 2 nd defendants. Final Judgment was delivered on 21 st March, 2021. The lower Court dismissed the appellant's action on the basis that there was insufficient evidence to prove that RDA (1 st defendant) was liable to pay compensation, pursuant to Section 48(4) of the Public Roads Act, which provides for compensation. 9.3 Following the dismissal of the action, the respondent sought to set aside the Judgment in Default of Appearance and Defence as well as the writ of fierifacias issued thereunder. 9. 4 The appeal assails the decision by the Court below to set aside the Judgment in Default, Judgment on Assessment and the writ of fieri facias and elegit issued. The contention is essentially that the requirements for setting aside the Default Judgment were not met. 9.5 The issues for det ermina tion a r e as follows: J. 15 (i) Wheth er th e learned Judge erred 1n law and fact by setting aside the Judgm ent 1n Default of Appearance and Defence, the Judgm en t on Assessm en t and th e writ offieri facias. (ii) Wh eth er th e case against the respondent was intertwined with th e 1st and 2 nd defendants th at it could not b e dealt with separately; and (iii) Wh eth er th e a ppellant a non-party to a Judgment can b enefit from it. 9 .6 We s hall deal with gr oun ds on e and two as one because they are connected and deal with the issue, of setting aside of the Default Judgm ent. Th e law on en try of J udgment in Default is provided for u nder Order 12 of the High Court Rules. In p articular, Order 12 rule 1(2) provides th at: "Where the writ of summons is endorsed for a liquidated demand and there are several defendants, of whom one or more appear to the writ, and another or others of them fail to appear, the plaintiff may enter final Judgment, as in sub-rule (1), against such as have not appeared and may issue execution upon the Judgment without prejudice to his right to proceed with the action against those that have appeared." 9.7 As regards settin g aside a Default J udgment, Order 12 rule 2 of the High Court Rules provides that: "Where Judgment is entered pursuant to the provisions of this Order, it shall be lawful for the Court or a Judge to set aside or vary such Judgment upon such terms as may be just." 9.8 As to the con siderations a Cou rt must tak e into account in J. 16 setting aside a Default Judgm ent, the case of Waterwells Limited v Wilson Samuel Jackson 111, is instructive. The Supr eme Court guided as follows: "Although it is usual on an application to s et aside a Default Judgment not only to show a defence on the merits, but also to give an explanation of that Default, it is the defence on the merits which is the more important point to consider." 9. 9 This was restated in Premesh Bhai Megan Patel v Rephidim Institute Limited 131 wh en th e Court held that: "In dealing with an application to set aside a Default Judgment, the question is whether a defence on the merits has been raised or not, whether the applicant has given a reasonable explanation of his failure to file a defence within the stipulated time and that it is the disclosure of the defence on the merit which is the more important point to consider." 9.10 We are alive to the principles that a party seeking to set aside a J udgm en t in Default of Appearance and Defence must satisfy the Court, that it h as (i) a defence on the merits, and (ii) m ust advance a reasonable explanation for it's failure to file a defence within the stipulated time. 9.11 In short, a Default Judgm ent will be set aside where the application sh ows a defen ce on th e merit and is promptly made. The delay sh ould not be inordinate or inexcusable. What is reasonable depends on th e circumstances of the case. Equity demands that an applicant acts with promptness and J. 17 diligence. 9.12 In this matter, the respondent did not file a defence necessitating entry of Default Judgment. The respondent did not apply to set aside the Default Judgment and the matter proceeded for assessment of damages and execution. Two and a half years later, after delivery of Judgment dismissing the case against RDA and Inyatsi Zambia Limited Roads Limited, the respondent sought to set aside the Default Judgment. 9.13 The appellant in the Court below sued RDA, Inyatsi Roads Zambia Limited and the respondent for damages for trespassing and illegally diverting the road in the appellant's Farm No.416 Mufulira. As well as damages for illegally creating a borrow pit in the said farm from which soil was extracted as laterite to rehabilitate the Mufulira Mokambo Road. The respondent and Inyatsi Roads Zambia Limited were contractors engaged as agents by RDA. When the matter proceeded to trial against RDA and Inyatsi Roads Zambia Limited, the Court below found that the appellant's land was trespassed upon by RDA's agents. As to whether RDA could be held vicariously liable for the actions of contractors, the Court found that it could be held liable for ~ • J. 18 damages caused by its contractors . 9.14 The Court proceeded to consider whether the appellant was entitled to damages arising out of trespass. The Court considered the provisions of Section 48 (4) of Public Roads Act No. 12 of 2002. The provision requires RDA to only compensate for land disturbance if there is proof that the land disturbed affected one quarter of an hectare or 1 % of the total land held. The Court found that whilst the appellant had demonstrated that RDA'S agents unlawfully trespassed on the Farm, it did not adduce sufficient evidence to prove that the 1st respondent was liable to pay compensation pursuant to section 48 (4) of the Public Roads Act. The Court below dismissed the action by the appellant against RDA and Inyasti Roads Zambia Limited. 9.15 Was the Court below on firm ground to set aside the Default Judgment on the basis of Judgment dismissing the appellant's claims? The substantive issue in this appeal as we see it is, whether the Deputy Registrar could enter a Judgment in Default, where the claims against the respondent and others were intertwined. Could the claim against the respondent be dealt with separately from the claims against RDA and Inyasti Roads Zambia Limited? 9. 16 The lower Court relied upon Order 19 / 7 / 6 of the Rules of J. 19 the Supreme Court and the learned Author, Dr. P. Matibini's text earlier cited in paragraph 5.2. The learned author opines that if a claim against a defaulting defendant can be dealt with separately from the claim against others, the Court may enter Default Judgment against a defendant and continue proceedings against the rest. Where such a claim against a defaulting defendant cannot b e dealt with separately from the claims against others, the Court will not enter Default Judgment. 9. 17 We have perused the claims in the lower Court, in which the appellant sought damages for trespass arising out of the illegal diverting of the road and creation of a borrow pit in the appellant's Farm No. 4016. 9.18 RDA and Inyatsi Roads Zambia Limited denied liability and damages for the trespass. RDA's defence is that it acted pursuant to Section 42 of the Public Roads Act No. 12 of 2002 , which allows it to enter upon any land in order to take materials required. Inyatsi Roads Zambia Limited also denied liability on ground that the affected area is not in excess of one percent of the entire land. 9 .1 9 In our view, the claims against the defaulting defendant (respondent) are so connected/interrelated, that they could not be dealt with separately from the claims against the J.20 others. RDA as Principal contracted the respondent and Inyatsi Roads Zambia Limited. Liability was contested by RDA. For this reason, it may properly be said that Order 19/7 /6 of Rules of the Supreme Court applied to this scenario. The claim against the respondent could not "be dealt with separately" from the claims against RDA and Inyasti Roads Zambia Limited, given the defence by RDA denying liability on the basis of section 42 of the Public Roads Act. 9.20 Order 19/7 /6 of the Rules of the Supreme Court stipulates as follows: "Where there are several defendants, some of whom give notice of intention to defend and serve defences, and some of whom are in Default of notice of intention to defend and defence, and the plaintiff proceeds to trial against some and on motion for Judgment against others, he should enter the action, and the motion for Judgment to come on for hearing at the same time." 9.21 We hold that the claims against the respondent and others being intertwined/interrelated, the Default Judgment entered advance of a trial, was inappropriate. The learned Deputy Registrar erred in law and fact by having entered a Default Judgment against the respondent. He ought to have waited the outcome of the decision on liability. J. 21 Further, the Court below ought to have dealt with the application at the same time as it dealt with the claim against the other defendants. 9.22 We must state that in a case involving several defendants or multi-defendant case where defendants are alleged to be jointly liable, entering a Default Judgment in our view, runs the risk of having inconsistent Judgments . The risk is that the defaulting party is held liable by entry of Default Judgment, while the non-defaulting parties that litigate are not found liable, as in casu. The end result is inconsistency, the respondent herein could only be found liable if RDA was held liable for t h e trespass and resultant damage claim. 9.23 To allow a Default Judgment, where the Principal was found not liable creates an absurdity of, on one hand a decree of a Judgment in Default and on the other hand another Judgment declaring the claim unfounded and dismissing the suit. 9.24 The proper course 1n our view, 1n such a scenario/ circumstances is for the Deputy Registrar to have postponed the entry of Judgment in Default until the case against the other defendants on the issue of liability concluded. In casu, the claims by the a ppellant against RDA and Another were dismissed on merit, on the issue of liability. Equally, h ad the J. 22 Deputy Registrar postponed entry of the default judgment, the Court below would have then dealt with the claims at the same time and dismissed the case as to all the defendants i.e. the Defaulter as well as the RDA and Inyatsi Roads Zambia Limited. Equally had the claim been decided in favour of the appellant, the appellant would have been entitled to a final Judgment against all. What transpired in this case, i.e. the entry of a Default Judgment, pending the continuance of the case against the other defendants in a claim which could not be dealt with separately was incongruous with Order 19 / 7 / 6 of the Rules of the Supreme Court. Having found that the Court below was on firm ground to set aside the Default Judgment, ground 3 is otiose. 10.0 CONCLUSION 10.1 For the foregoing reasons, we do not find merit in grounds 1, 2 and 3 of the appeal. The Court below was on firm ground in setting aside the Default Judgment because the claims against the defaulting party could not be dealt with separately from the claims against RDA and Inyasti Roads Zambia Limited. The appeal is accordingly dismissed. As regards costs, we depart from the general principle that costs follow the event, due to the procedural lapses of the respondent and its con duct. We order th at the parties shall bear their own J.23 costs. ···················j ····················· M. J . Siavwapa JUDGE PRESIDENT F. M. Chishimba A. N . Patel S. C COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE