Republic of Romania and Anor v Dr David Nama and Anor (Appeal No. 232/2019(A)) [2020] ZMCA 174 (20 November 2020)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT NDOLA Appeal No. 232/20 l 9(A) (Civil Jurisdiction) BETWEEN: REPUBLIC OF ROMANIA MINISTRY OF FOREIGN AFFAIRS OF ROMANIA 2 ND APPELLANT AND DR DAVID NAMA DANA SERVICES LIMITED 1 ST RESPONDENT 2 ND RESPONDENT Chashi, Lengalenga, and Majula JJA On 11th November, 2020 and 20th November, 2020 For the Appellants Ms. A. D. A. Theotis with Ms. J. R. Mutemi, both of Messrs Theotis Mataka & Sampa Legal Practitioners For the Respondents Ms. M. C. Kaoma of Messrs K. M. G. Chisanga Advocates. JUDGMENT MAJULA JA, delivered the Judgment of the Cou rt. Cases referred to: 1. New Plast Industries vs Commissioner of Lands and The Attorney-General SCZ Judgment (2001) ZR 51. J2 2. Lily Drake vs MEL Mahtani and Professional Services Limited (1985) ZR 236 (SC). 3. Jamas Milling Company Ltd vs Imex International (Pty) Ltd (SCZ Judgment No.20 of 2002). 1.0 Background 1. 1 The background to this appeal is that the respondents (who were plaintiffs in the court below) issued a writ of summons and statement of claim out of the commercial registry of the High Court on 21 st July, 2016. The reliefs sought were for, inter alia, an order that the appellants should offer for sale to the respondents' property number F/48a/2/F also known as Plot 2, Leopards Hill Road, Lu saka as per lease agreement. 1.3 In reaction to the writ of summons the appellants filed a notice of motion to raise preliminary issues on 9 th August 2017. The questions sought for determination in the notice of motion were as follows: "1. Whether the court could proceed to determine the matter in view of the fact that the matter was commenced by writ of summons as opposed to an originating notice of motion owing to the fact that the matter arose out of a tenancy agreement between the parties; and 2. Whether the court has jurisdiction and may proceed to determine the matter as it arises from a residential lease when there was no underlining commercial transaction between the parties" J3 1.4 With these questions of law, it was the appellants' ardent prayer that the respondents' action in the court below should be dismissed with costs on the premise that the action was not properly before court. 1.5 On 17th August, 2017, the appellants filed another notice of motion seeking a determination by the court below of additional issues in limine couched as follows: "1. Whether the respondents' claim against the 1st appellant should be dismissed by reason of the fact that the appellant and the party served were not the same; and 2. whether the 1st appellant should be struck out from these proceedings by reason of the fact that civil proceedings by and against the State of Romania ought to be instituted against the Ministry of Public Finance." 1.6 On 25th August 2017, the respondents' in turn filed a notice of motion to raise preliminary issues calling upon the court to determine the following issue: "1. Whether the affidavit filed by the appellants on 9th August 2017 is defective; 2. Whether the application to raise preliminary issues filed by the appellants on 1 7th August 201 7 was defective." 1. 7 The court below rendered its ruling on 19th August 2019 1n which it dismissed all the preliminary issues that were raised by both parties. He thereafter directed that the matter proceeds to trial. 2.0. Grounds Of Appeal J4 2.1 Disconsolate with the ruling, the appellants have come to t h is court detailing the following grounds of appeal: "l. The learned High Court Judge erred in law and fact when at page R 12 of the ruling, in deciding that the action was properly commenced by writ of summons and statement of claim, he relied on the reliefs sought by the respondents under paragraph 3 and 4 of the writ of summons and statement of claim, contrary to the position of the law set out in the case of New Plast Industries vs Commissioner of Lands and Another1 to the effect that mode of commencement is determined by the law and not the relief sought. 2. The learned High Court Judge erred in law and in fact when at page R12 of the ruling, in dispelling the appellant's assertion that the wrong mode of commencement was adopted by the respondent, he considered the respondents' assertion that they remained on the premises as caretakers after the expiry of the lease agreement, without considering that the respondents became tenants at sufferance and as such, were not excluded from the definition of a tenant under section 2 of the Rent Act, Chapter 206 of the Laws of Zambia. JS 3. The Honourable Court misdirected itself at page Rl 4 of the ruling when the court held that there was a commercial transaction between the parties as defined under Rule 1 of Order LIII of the High Court Rules, Chapter 27 of the Laws of Zambia on the strength of the claims by the respondent for a refund of the cost of the Grass Thatched Conference Center when as a matter of fact there was no underlying action of a commercial nature between the parties to the action. 4. The learned High court judge erred in law and in fact when at page Rl 6 of the Ruling, he held that the appellant was estopped from raising the issue of service of process on a wrong party and treated the appellants' preliminary issue s eeking the dismissal of the action for wrong service as an application to set as ide proceedings for irregularity in disregard of the trite position of the law, to the effect that a preliminary issue can be raised at any stage of the proceedings and that, no estoppe l can be raised against statute." 3.0 Appellant's Arguments 3 . 1 Written heads of argument were filed in support of the appeal. Concerning ground one, the appellant contended that the dispute between the parties is based on the relationship of landlord and tenant as may be gleaned from J6 the pleadings that are before court. Learned Counsel went on to cite article 2 of the lease agreement signed by the parties which stipulates that the property shall be used for residential purposes and n o other purpose. This provision, according to Counsel, unambiguously provides that the premises in question are residential premises and the p arties have a landlord and tenant relationship. 3.2 It was submitted that on the authority of Rule 3 of the Rent Rules under the Rent Act, complaints arising from a Landlord and Tenant relationship should be commenced by way of Originating Notice of Motion. Counsel also referred to the case of Lily Drake vs MBL Mahtani and Professional Services Limited2 where the Supreme Court observed, inter alia, that applications to the court for possession of premises which are subject of the Rent Act must be brought by originating notice of motion. 3.3 Further reliance was placed on the holding of the Supreme Court in New Plast Industries vs Commissioner of Lands and The Attorney General1 where it was held, at page 51 as follows ; "It is not entirely correct that the mode of commencement of any action largely depends on the reliefs sought. The correct position is that the mode of commencement of any action is generally provided by the relevant statute." J7 3.4 That this being the position, the applicable mode of commencement for the present action ought to have been by originating notice of motion. 3.5 Moving on to ground three, the learned counsel submitted that the commercial list was established to specifically deal with matters that are classified as being of a commercial natur e. Using the case of Jamas Milling Company Ltd vs Imex International (Pty) Ltd 3 as authority, counsel argued that by commercial nature it is meant that the cause of action must arise eith er out of transactions of commerce or relate to the construction of a commercial document, et c. 3.6 Turning to ground two, it was argued that from the pleadings it is clear that a tenancy at sufferance arose in light of the fact that the lease expired in 2002 . That this could be surmised from the fact that while the respondents remained on the premises, they continued to p ay rentals. 3.7 The a ppellants' counsel went on to assert that a commercial matter should have issues of merchandise , insurance, banking, mercantile agen cy, and mercantile usage . Sh e contended that the present action does not fall into the aforesaid classification as it was purely a landlord and tenant relationship governed by the Rent Act. The J8 appropriate forum, therefore, would have been the general list. 3.8 In relation to ground fou r, it was submitted that any proceedin gs by or against the state of Romania ought to be instituted by or against t h e Ministry of Public Finance of Rom ania. For this proposition, we were referred to the Romanian Government Decision No. 34/2009 on the organization and fu nctioning of the Ministry of Public Finance. In cou nsel's view, the lower court was therefore in error when it d is regarded this position of t h e law. 3.9 We were urged to allow the appeal and set aside the ru ling of the court below with costs. 4.0. Respondent's arguments 4.1 The respondent opposed the appeal and to this end, cou nsel for th e respondent, Ms. Kaoma, filed written heads of arguments on 27th Au gust 2020. She forcefully submitted that t h e mod e of commencement is p r ovided for in the relevant Statute as it was h eld in th e case of New Plast Industries Limited vs Commissioner of Land and Another1 • She vehem ently argued th at where a particular application being sou gh t is not specified in th e relevant Statute, there 1s no requirement to commence the matter using the procedure set out th erein. In this regard , counsel drew our atten tion to th e J9 judgment of the Supreme Court in the case of Lily Drake vs M. B. L. Mahtani and Professional Services Limited2 • 4.2 The essence of the argument in respect of ground two was that this being a commercial action it was imperative for the appellant in their defence to specifically transverse every allegation made in the Statement of Claim, which they failed. Counsel noted that the lower court was therefore on firm ground to hold that the appellants admitted the allegation in the Statement of Claim and that the respondent remained caretakers. 4.3 Ms. Kaoma added that the question as to whether the respondents continued to stay on the property as caretakers or as tenants at sufferance is one that can only be resolved after trial as observed by the learned trial Judge. 4.4 Moving on to ground three, Ms. Kaoma posited that the lower court was on firm ground when it held that there was a commercial transaction between the parties within the definition of Order 53 Rule 1 of the High Court Rules, Cap 27. She asserted that the claim for refund of money for renovating the Grass Thatched Conference and seeking payment for taking care of the property, all point to the fact that there was a commercial transaction. 4 .5 Turning to ground four, the gist of Ms. Kaoma's submission is that the lower court was on firm ground when it found that Jl0 the appellants were es topped from denying that court process was served on the correct party. That this is in view of the fact that the appellants accepted the process and proceeded to apply for an injunction. 4.6 With these submissions, we were accordingly urged to dismiss the appeal with costs. 5.0 Hearing of the appeal and oral arguments 5.1 When this matter came up for hearing on 11 th November, 2020, Ms. J. Mutemi sought to rely on the record of appeal and the heads of argument filed on 24th July, 2020. She emphasized that the relationship between the parties arose from a residential lease and the claims were premised on the same. That it is from this premise that the action in the High Court ought to have been commenced by originating notice of motion. 5.2 Ms. Mutemi criticized the court below in the manner it dealt with the issue. She spiritedly argued that the lower court placed emphasis on what it considered bare denials by the appellant which was misplaced because the court was not dealing with a judgment on admission. 5.3 According to Ms. Mutemi, the position of the appellant was that the lease agreement that the parties had signed had Jl 1 continued even after the 10 year period had elapsed. In conclusion, she urged us to allow the appeal with costs. 5.4 Ms. Kaoma on behalf of the respondent equally sought to place reliance on her heads of argument which were filed on 27th August, 2020. She submitted that the respondent had contended in the lower court that they had remained as caretakers at the end of the lease which is a dispute that is yet to be determined. 5.5 Regarding the mode of commencement, her brief response was that arising from the fact that the lease had expired, the correct mode of commencement that was to be invoked was by way of writ of summons. Her prayer was for the dismissal of the appeal. 5.6 In reply, Ms. Mutemi contended that there was a tenancy at sufferance after the lease had expired, therefore the relationship of landlord and tenant continued. She added that the statement of claim does not disclose that the respondents h ad remained on the property as caretakers. 6.0 Consideration and decision of the Court 6.1 We have intensely examined the record and digested the arguments by both parties. Briefly put the 1st and 2 nd grounds of appeal are dealing with the mode of commencement. In the J12 third ground of appeal, the appellant is disgruntled with the Judges' determination that this was a commercial transaction. 6.2 The unhappiness in the fourth ground stems from the service of process being effected on the wrong party according to the appellant. 6.3 We shall deal with grounds one and two together regarding the mode of commencement. On the one hand, the appellant is contending that it should have been commenced by originating notice of motion. On the other hand, the respondent 1s contending that the stipulated mode of commencement 1s restricted to the actions that are specified in the relevant statute. However, where the applications sought are not specified within the Act, there is no requirement to commence the matter using the procedure in the statute. 6.4 As we see it, the issue at the heart of this appeal is whether or not the mode of commencement that was employed by the respondents was correct at law. The question is whether the matter ought to have been commenced by originating summons. To answer this question, we will first turn to the law on mode of commencement. 7.0 Mode of commencement 7. 1 The law is well settled that where the mode of commencement of an action is prescribed by the relevant statute, then that is J13 the mode that should be adopted. In the celebrated case of New Plast Industries vs The Commissioner of Lands and The Attorney-General 1 it was h eld as follows: "It is not entirely correct that the mode of commencement of any action large ly depends on the reliefs sought. The correct position is that the mode of commencement of any action is generally provided by the relevant statute." 7 .2 The foregoing authority makes it crystal clear that where a mode of commencement is stipulated in a relevant statute that is what you use. If on the other hand, the application is not provided for in the Act, one need not commence an action using the procedure in the statute. 7 .3 Turning to the case at hand, there 1s no evidence that it fell under the Rent Act. If anything it is pointing to the Landlord and Tenant Business Premises Act. As a lready stated in the preceding paragraph, what determines the mode of commencement is whether the statute provides for it and that is what you follow. In this situation, it would a ppear that on the face of it that there was no statute which was a pplicable and the ref ore we are of the considered view tha t there was nothing wrong with the Judge looking at the reliefs being sought to d etermine the mode of commencement. Careful scrutiny of the reliefs sought points to a specific performance action and r ecovery of monies. J14 7.4 In light of the foregoing we cannot agree more with the decision of the trial Judge when he stated on page R13 as follows: "In my view, this question, including whether the disputed attachment was part of the Lease Agreement, can only be determined at trial and after vwa voce evidence. Conversely, I cannot at this stage confidently pronounce that the Rent Act applied to the premises." 7. 5 The Judge was on firm ground in arriving at the conclusion that the mode of commencement of this particular action cannot be by originating notice of motion. 7 .6 For reasons advanced we find ground one to be destitute of merit and dismiss it. 7. 7 Pertaining to the second ground which is tied to the first ground on mode of commencement, the question as to whether the respondents remained as tenants at sufferance as contended by the appellants is one that can only be determined at trial. There needs to be evidence led to this effect. The question for determination would be, were they caretakers or tenants at sufferance? 7.8 The bottom line is that the applicability of the Rent Act could only be determined at trial and therefore this action is not subject to the mode of commencement provided for in the Rent Act. 7.9 Ground 2 1s equally devoid of merit and we accordingly J15 dismiss it. 8.0 Commercial Transaction 8 . 1 The grievance in the third ground emanates from the Judges' determination that there was a commercial transaction between the parties as defined in Rule 1 of Order LIII of the High Court Rules. 8.2 For ease of reference, Order LIII rule 1 of the High Court Rules defines a commercial action as; "Commercial action means any cause arising out of any transaction relating to commerce, trade, industry or any action of a business nature." 8.3 Further Rule II(2) of Order LIII gives discretion to a Judge to consider whether a matter is suitable to be tried in the Commercial Court. It provides as follows: A Judge shall determine whether the cause of action and issues of fact and law likely to arise or the procedures to be followed in an action make the action suitable for inclusion or exclusion in the Commercial List." 8.4 We see no b asis for criticizing the Judge for holding that: "claims such as refund to the plaintiffs of costs of grass thatched conj erence center and payments for caretaking J17 9.4 We are in agreement with the Judge that service was indeed effected on the proper party. He did resolve the issue very well and cannot be faulted. 9.5 In light of the foregoing, we find no merit in ground four and dismiss it. 9.6 All in all we find no merit in all four grounds of appeal and dismiss them. 9. 7 Costs follow the agreement. 1n default of J. Chashi COURT OF APPEAL JUDGE F. M. Lengalenga ···········~ ;············ ., COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE