Setrec Steel & Wood and Ors v Zambia National Commercial Bank Plc (AppealNo.39/2007) [2007] ZMSC 191 (23 November 2007)

I ! . t '' I I ! . IN THE SUPRE !!mJ?ENATLu~!~URTOFZAMBIA (CIVIL JURISDICTION) /J • , - IN THE MATTER BETWEEN: SETREc STEEL & WOOD . PROCESSING LIMTED SEBASTIAN KOPULANDE COLLINS KOPUL.f\NDE vs.· AppealNo.39/2007 SCZ/8/43/200 1 ST APPELLANT 2ND APPELLANT 3RD APPELLANT ZAMBIA NATIONAL COMMERCIAL BANK PLC RESPONDENT j Coram: Sakata, CJ, Mumba, Chitengi, JJS 19th September and 23rd November 2007 ··-. ·•- - - . - ( ✓ For the Appellants: Mr L. C. Zulu of Malambo & Company For the Respondent: No Appearance JUDGMENT bUT~ORITIES REFERRED TO: MWAMBAZI VS MORESTER FARMS LTD. (1977) Z. R. 108 ATIKINS COURT FORMS, 2ND EDITION, VOLUME 15 . THE HIGH COURT (AMENDMENT) RULES, 1999. 1. 2. 3. For convenience, we shall refer to the 1st, 2nd and 3rd · appellan s ' t as 1 st 2nd and 3rd defendants; the respondent as the . pla1ntl , 'ff designations they held in the court below. -J2- This is an a . _ ppeal against the decision of the High Court on 14th February 2007 dismiss the act. whereby the defendants' application to . . ion against them by the plaintiff was refused. The plaintiff brought an action against the three defendants for fore~losure and possession upon failure to repay monies obtained under mortgages on stand no. 1732, Kapata Road, L k fl usa a; oating charges over stand no. 1632, Kapata Road, ( Lusaka and monies under floating debentures over the defendants' company assets. The plaintiff had commenced an action previously on the same claims which action was dismissed for want of prosecution under the rules of the Commercial Actions Registry, namely, Order 53, Practice Direction No. 12 for Commercial Actions. After dismissal of the action, the plaintiff . 1nst1 u ·t ted the same action afresh prompting the defendants to ~ r dismissal of the action on the ground that it was an app y 10 abuse of the court process. In th e court below, Counsel for the defendants, submitted . U that the s it having been dismissed in terms of Order 53 and ' . Direction no. 12, could not be entertained again as the Practice I ' ! ' ! t i I rule did not t ll . . -Js- a < of striking out; that dismissal was different from striking out, that . . no action based on the same issues between the same partie s could be commenced after the earlier action had been dismis d se · The case of Mwambazi Vs Morerester Farms ( l), was distinguished by submitting that the Mwambazi case vvas not a commercial action and was not commenced under the new rules of the Commercial List and that in that case, a defence was available such th_at the default judgment entered was set aside, whereas the plaintiffs' action which was on the same issues ( and facts, claiming the same relief, was an abuse of court, he urged the court below to dismiss it. Mr Munasangu, Counsel for the plaintiff (in the court below), submitted that the dismissed action had not been heard on the •t mer1 s, 1·t was dismissed for want of prosecution upon default by the p a1n . • tiff Learned Counsel submitted that courts should allow . ues to come to trial notwithstanding the default of the triable 185 · Further, Counsel submitted that the doctrine of estoppel only where a matter has been determined to final parties. applied conclusio . n by judgment. He submitted that the defendants had not dernons trated that that was the case herein, he pleaded that the act1· on should b h - J4. e eard on the merits and that the application be dis111issed. , I ' - I \ I \ I I In the court b 1 e ow, Counsel for the defendants replied that . the High Co urt Rules used the word, "d1sm1ss", for a purpose. That to allow th e case to be heard, would amount to a breach of . . Order 53 of the High Court Commercial Actions rules. The learned trial Judge, in refusing to dismiss the action, ( ' • I I stated that a decision on the merits meant a decision that was reached after hearing both sides of the case~ that after that an action could not be brought to court again. The learned trial Judge stated that the application for dismissal was not of a decision · on the merits as the action was not fully heard and tried and, a judgment on the merits delivered. The learned trial Judge ·, refused the applicatio~ to dismiss the action and awarded costs to the plaintiff. There ·s one ground of appeal, that the learned trial Judge l _ . b th law and fact when he held that a matter listed on cial Causes List, when dismissed by the High Court erred 111 ° the comrner Pursuant to Order 53 -J5- Practice Direction no. 12 for Commercial Actions, can be re commenced before another Judge. / In the writt h en eads of argument, the defendants submitted th at Practice Direction 12 of the Commercial Actions Practice Directions under High Court (Amendment) Rules of Statutory Instrument No. 29 of 1999, proscribed a mandatory penalty for any commercial action that remained without progress for sixty (60) days or more; it was to be taken before a Judge for dismissal; ( that the provisions under the Practice Direction were stated in mandatory terms and left no discretion to the court on the penalty to be imposed for such default. The word 'shall' in the Practice Direction was distinguished from the word 'may', it was submitted that the intention of the framers of these Practice Directions supporting Commercial Actions was that the penalty be mandatory dismissal. After discussing the provisions of paragrap h l8 of Vol 15, 2 nd Edition of Atkin's Court Forms, where a fresh ac 10 t . n is permitted after dismissal for default and that it is · ination or adjudication upon the case on its merits, before determ the defen an d ts sought to distinguish those provisions from Order 53 of the . h court (Amendment) Rules 1999. It was submitted ig H that order Rule 5 (4) of the White Book related to ordinary actions on th - J6. e general list while Order 53 of the High Court (Amendment) Rule s related to actions on the commercial list. I t It was sub 'tt d mi e that the law discussed by Atkin's Court Forms cited b d a ove, oes not apply to matters on the Commercial List in this country b · ecause our own rules of practice prescn e the procedure and the law. This court was urged to consider the ·b · policy behind the establishment of the Commercial List in the High Court; it was submitted that to rule that dismissal of a C commercial action for default is no bar to re-commencement, would amount to defeating the policy behind the establishment of the Commercial List rules. At the hearing, Mr Zulu, who appeared for the defendants 't re1 era , ted by way of oral submission, most of what was in the .. written heads of argument. In the main, learned Counsel asked C t to clarify the decision regarding ·Practice Direction Rules tutory Instrument No 29 of 1999 for actions on the St a . 1 List vis-a-vis the provisions of the law for actions on I list. Counsel asked the court to give direction on the the cour under Comrnerc1a the genera effect of 18 d . missal upon default of an action on the Commercial List. ' -J7- There was n 0 appearance for the plaintiff but written heads of argument settled by Legal Counsel filed on 12th September 2 007 were on d recor by way of response to the appeal. ' l. I In the written heads of argument, the plaintiff submitted that the learned trial Judge in the court below was on firm ground both in fact and law when he held that a decision on the 1 · merits meant a decision arrived at after hearing both sides of the \_ case. It was submitted that Practice Direction No 12 of the Commercial Actions · Practice Directions persuant to the High Court (Amendment) Rules of 1999 under Statutory Instrument No 29 of 1999, were very clear on the issue of dismissal; that such provisions were mandatory and left no discretion to the court on dismissal of an action upon default but submitted that there was no direction on recommencement of the same action. It was ( •tt d that there was no dispute on the use of the word 'shall' subrnt e h t what was in dispute was whether a decision on the eant a decision made after hearing both sides; that butt a . merits Ill . , C urt Forms, as cited by the defendants, was clear as it Atk1ns h t dismissai'for default was not a bar to a fresh action. . . • clar1f 1ed t a . submitted that the rule under the Commercial Actions It was Pract· ice Direction -JB- cannot be completely divorced from the rules of the Whit B e ook Order_ 32 Rule 5 (4) . It was pointed out that reading the R I U es under the Commercial Actions Practice Direction in · 1 . lso at1on to the other rules of general application was a misdirection. Finally, the plaintiff submitted that to rule that actions ct· · 1sm1ssed upon default are barred from recommencement would contradict the fundamental principles that matters must be heard on the merits for a fair judgment. The plaintiff urged the court to uphold the decision of the court below and dismiss ( . the appeal with costs. ' We are grateful to the parties for their submissions. We have duly considered those submissions, the authorities cited and the evidence on record as well as the Ruling appealed against. Ordinarily, an appeal from an interlocutory decision would not require . much discussion, as the issue would be narrowly restricted discretion, to legal interpretation on either jurisdiction or In this ·interlocutory appeal, however, the legal issue . raised hinges on the jurisprudential question as to what is fair d hoW it .can be achieved under court process justice an '! ·-(_- : l i ; I . I I i l l I \ l ; notwithstandin - J9 - g the default of either party, especially the party Wh' ich commenced t' ac ion. We have a division in our civil practice in that we h . ave actions on the general list conducted in the ordinary way · . h wit the ordinary rules of procedure and then we have comme · 1 . rcia actions rules which are restrictive and meant to meet the objectives of expediency in an effort to minimize loss and to allow commercial transactions to operate continually without · undue disruptions notwithstanding litigation by the parties. All the same, in both types of cases, the quest is for fair justice for ( the parties concerned. On Commercial Court Rules and Practice Directions formulated after Statutory Instrument No 29 of 1999, the introduction states that the rules are an amendment to the Rules of the High Court directing procedure in civil actions. It is a well I known principle of law in drafting that an amendment cannot f oro the Principal provisions being amended or cannot Indeed, as submitted by Counsel for the derogate r h thereof. Practice Direction no. 12 made under Statutory . lie 1n breac . . pla1nt1ff, Instrument 29 of 1999 does not prohibit recommencement of an . issed for default. action d1stil It is our under the c · . considered view that the framers of these Rules ommerc1al List were very much aware of what the -J10- Commercial List was all about and what it was not about. The Commercial A t · c ions Rules are about expediency with fair justice and no less. The learned trial Judge in the court below had actually hinted on the key factor in summarizing· his decision when he stated that a decision on the merits was a decision arrived at after hearing both parties and that it was that kind of decision which would bar a recommencement of the dismissed action. As for the cited paragraph 28 of the Atkin's Court Forms, we find the wording quite clear. The relevant part provides that, " ... dismissal of an action or counterclaim for default is not a bar to a fresh action on the same or substantially the same facts, and ( doe not operate as an estoppel or a res judicata, even where the plaintiff consented to the (dismissal) Order, since the court has ' \ \ I \ i I \ : l \ I I I ' \ l ' I . ; ' not e e d t rmined or adjudicated upon the case on its merits." · The essence of this provision is to allow for a cause to be teste on d the evidence adduced by all parties to the action, ev·ct 1 ence wh· h . e: 1act wh· ' lch facts · le is left aw applicable. -J11. to the court to analyse, make findings of ' 111 turn, would be interpreted in the face of tb.e That, in our view, is what would amount to adjudication or d . . eterm1nation on the merits. 1ndeed, the dismissal discussed in the cited paragraph in Atk' ' ·· ins Court Forms is for default, meaning, failure to pursue the case and complete it in compliance with procedure. Therefore, \ the meaning of default in Atkin's Court Forms is the same as that under the Commercial Actions Rules and Practice Direction already cited, that is, it is a failure to pursue the case according to the procedure of the court process up to completion stage and where a judgment or decision is delivered. The penalty prescribed under the Commercial Actions Rules is for default in completing the case according to procedure and failing to do so for sixty days or more. complete The period of sixty days given would be sufficient to the case, that is why the penalty of dismissal is d t man a 0 A>J ~ upon default. The phrase, " ... without any progress" means exac tly that, fai_lure to take steps to complete the process . to the procedure provided for. Thus, the rules for Actions must not be read in isolation from, or, in according . Comrnerc1a . derogation frorn the Rules of the High Court general list. -f ' I I i l l ·, ' -J12- Section 1 (1) states as follows:- of the High Court (Amendments) Rules, 1999 "Th ese Rules may be cited as the High Court (Amendment) Rules, 1999, and shall be read as one with the High Court Rules, in these Rules referred to as the principal Rules." Section 2 indicates that the amendment is actually an insertion of a new Order, Order LIII to the existing Orders of the High Court Rules. The sections cited above are complete, they seal answers to the questions paused by the defendants on the construction and application of the Direction no. 12. Commercial Actions Rules and the Practice · The appeal is dismissed with costs, to be taxed in default agreernent. \ \ \ \ -J13~ ~ ••••••••••••••• ••••• •••••••••••• E. L. SAKALA CHIEF JUSTICE ' I , · •••••••••••••••••••••••••••• F . N. M. MUMBA GI SUPREME COURT JUDGE SUPREME COURT JUDGE