Labadee Trust v VS Cargo Management Service Limited (Appeal 11 of 2015) [2015] ZMSC 60 (30 September 2015)

/~ J1 SCZ JUDGMENT NO. 33 OF 2015 (833) IN THE SUPREME COURT OF ZAMBII\ APPEAL NO. 11/2015 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN SCZ/8/280/2014 THE LABADEE TRUST APPELLANT AND VS CARGO MANAGEMENT SERVICE LIMITED RESPONDENT Coram: Chibomba, Hamaundu and Kaoma, JJS. On 22nd r.llay, 2015 and 30:~September, 2015. =or the Appellant: Mr. E. K. Mwitwa, of Messrs Mwenye & Mwitwa Advocates. For the Respondent: Mr. E. B. Mwansa, SC., of Messrs EBM Chambers, appearing together with Ms D. Findlay, of Messrs D. Findlay & Associates. JUDGMENT Chibomba, J. S, delivered the Judgment of the Court. Other materials referred to: 1. Supreme Court Act, Chapter 25 of the Laws of Zambia 2. High Court Rules, Chapter 27 of the Laws of Zambia 3. Rules of the Supreme Court, 1999 Edition •• J2 (834) The Appellant, who was the Plaintiff in the Court below, appeals against the Ruling of the High Coort at Lusaka in which the learned Judge ordered that the judgment entered in default of defence be set aside. The application was filed pursuant to Order 30/3 of the High Court Rules (HCR), Chapter 27 of the Laws o~Zambia and Order 13/9 of the Rules of the Supreme Court (RSC), 1999 Edition. For convenience, we shall refer to the Appellant as the Plaintiff and the Respondent as the efendant, which they were in the Court below. The history of this matter is that on 16th April, 2008 Boss Logistics (Pty) Limited (in liquidation), a company registered in the Republic of South Africa, entered in:o an agreement with Continental Logistics Limited, a company also registered in the Republic of South Africa, for the supply of a Hunslet Hudson 55 ton locomotive. The Plaintiff supplied the locomotive through the agents of Conti1ental Logistics Limited, \IS Cargo Management Serv;ces Limited, t1e Defendant in this matter. Whilst on delivery, the locomotive caught fire and was damaged and sent back for repairs. The Plaintff alleges that an alternative locomotive, an Ajax, was sent to Continental Logistics Limited through its agent, the Defendant, after an oral agreement with the Defendant. J3 (835) FolI:)wing the liquidation of Boss Logistics (Pty) limited and by a Cession ContrGct dated 4th May, 2011 (See page 104 of the Record of Appeal), Boss Logistics (Pty) limited ceded its rights, title and interest in the said contract t,] the Plaintiff in this matter, Labadee Trust. A dispute arose an:l to pJt it simply, over the whereabouts of the Ajax locomotive allegedly delivered to the Defendant as an agent of Continental Logistics limited. So the Plaintiff commenced an action by Writ of Summons claiming the following reliefs from :he Defendant:- "1. Delivery of the AJAX locomotive to the Plaintiff in Ndola, Zambia for the reasons set out in the Statement of Claim; 2. Payment for the loss of income and business on the AJAX Locomotive at the rate of US$1,000per day from the 15th of July, 2008 to date of return of AJAX locomotive; 3. Damages for breach of contract; 4. Interest at current bank lending rate on all sums found due; 5. Any other relief the Court may deem just and fit; and 6. Costs of and incidental to tllis action." On 24th February, 2014, the Defendant, by Summons, applied for Security for Costs which the learned Judge, in her Ruling dated 16th April, 2014, granted. In that same Ruling she also ordered the Defendant to file its defence within 14 days from the date of the Ruling. J4 (836) On 6th May, 2014, the Defendant filed a Notice to raise Preliminary Issues which th8 learned Judge d smissed after hearing both parties. In the same Ruling, she ordered the Def8ndant to file its defence within 21 days from the date ther8of. She also set 18th September, 2014 as Scheduling Conference date. However, on 191t1 September, 2014, the Plaintiff entered Judgement in default of defence pursuant to Order 30/3 of the HeR. On 26th September, 2014 the Defendant, by Summons, applied to set aside the default jucgement entered. After hearing both parties and upon considering Affidavit evidence before her together with the arguments in the respective Skeleton Arguments and the oral submissio1S by the learned Counsel for the parties, the learned Judge, in her Ruling dated 18th November, 2014, set aside the default Judgment as she was of the view that the Defendant had disclosed a defence on m8rit in the proposed Defence as the Defendant had denied being in p::>ssessionof the Ajax locomotive which was allegedly delivered to it by the Plaintiff. This was despite her not accepting the Defendant's explanation of its failure to file the Defence within the r8quisite 21 days thereby leading to this Appeal. J5 (837) As a starting point, we wish to recapture hereunder. an issue that we raised du'ing the rearing of the Appeal and we brought to the attention of the learned Counsel for the Plaintiff vis-a-vis this Appeal and the provision of Section 24/1 (b) of the Supreme Court Act. Chapter 25 of the Laws of Zambia. This Section provides as follows:- "24. (1) No appeal shall Iie- (b) from an order of a Judge giving unconditional leave to defend an action;" The response by the learned Counsel for the Plaintiff was an admission of nct being aware of this provision. However, Mr. Mwitwa went on to submit that the leave to defend the action which the leamed Judge granted was condi:ional in that she made two orders, namely. the order that the Defendan: files its defence within 21 days and secondly. the order that the costs be for the Plaintiff. Mr. Mwansa, S. C.'s response on the Defendant's behalf, was an admission that he too was not aware of the above provision. He. nevertheless, went on to argue that 'unconditional leave'. within the meaning of that Section, did not in:lude orders as to time limit and costs. The learned Judge, in setting aside the default judgment, granted leave to defend the action and ord~red the Defendant to file its defence J6 (838) within 7 days from the date of the Ruling in question. In terms of costs, the learned Judge put it thus:- "I award costs of this application to the Plaintiff. A Party in Default may be ordered to pay costs where there has been a delay by Applicant. Therefore the costs will be borne by the Applicant who is guilty of the Default and who should not be seen to benefit from their own default. I refer to the case of Sangwa & Simeza, Sangwa & Associates vs Hotellier Limited and Ody's Works SCZ/8/402/2012. I further order that the cost be taxed in default of agreement and further be paid by the D~fendant whilst these proceedings are going on. I further direct that the defence be filed within seven (7) days from the date hereof." From the above submissions by the learned Counsel for the parties, the queslion is whether the leave granted by the learned Judge to defend the action was conditional or not. Should we find that the leave was not conditionel, then the Appeal before us is incompetent as it has been brought in breach of Section 24/1 (b) of the Supreme Court Act, and hence stands to ::Jedismi5sed as the same is wrongly before us. As 10 what may constitute conditional leave, Order 14/4/16 of the RSC, put5 it as follows: "A condition of paying some or all of the money or damages claimed is imposed where there is a good into Court, or giving security, ground in the evidence for believing that the defence set up is a the Master "is prepared very nearly to give sham defence or (Wing v. Thurlow (1893) 10 T. L. R. 53). judgment (This statement was cited with approval by Lord Diplock in M. V. Yorke Motors (a firm) v. Edwards [1982]1 W. L. R. 444 at 450; [1982]1 All E. R. 1024 at 1028 and had been quoted with approval by Devlin L. J., in Fieldrank Ltd v. E. Stein [1961]1 W. L. R. 1287; [1961]3 All E. R. for the plaintiff" J7 (839) 681, CA, who restored the dictum of Bramwell B., in Lloyd's Banking leave may be Company v. Ogle (18761 1 EX. D. 262 that conditional granted where there is something suspicious in the defendant's mode of presenting his case, or the Court is left with a real doubt about the defendant's good faith.) Leave to defend conditional on the full amount claimed being paid into Court may be ordered where the defence is "shadowy" in Van Lynn Developments Ltd v. Felias Construction Co. [1969] 1 a. B. 607; [1968] 3 All E. R. 824) or there is little or no substance in it or the case is almost one in which summary judgment should be ordered (Ionian Bank Ltd v. Couvreur [1969]1 W. L. R. 781; [1969]2 All E. R. 651, CAl. On the other hand, wheri! the defence can be described as more than shadowy but less than probable leave to defend should be given (Rafidain Bank v. Agom Universal Sugar Trading Co. (1986) The Times, December 23, CA)." (per Lord Denning M. R. Order 14/4/3 of the RSC is also instructive as it prov"des as follows:- "The court may give a defendant against whom such an application is made leave to defend the action with respect to the claim, or the part of a claim, to which the application relates either unconditionally or on such terms as to giving security or time or mode of trial or otherwise as it thinks fit". From the above provisions, it is clear that the orders by the learned Judge for the Defendant to file its Defence within 7 days and for costs do ot and cannot be interpreted to amount to conditional leave to defend as nas been argued by Mr. Mwitw3. The Appeal before us is therefore incompetent as it fl"es directly in the tee:h of the provision of 24/1 (b) of the SCR which does not allow a party to appeal against an order of a Judge giving unconditional leave to defer,d an action. J8 (840) In view of our holding above, it is not necessary for us to consider the central cuesticn raised in this Appeal as to whether or not the learned Judge W3S on firm ground when she set aside the judgment entered in default of defence and granted leave to the Defendant to defend the action on ground that the question has become otiose. This Appeal is therefore dismissed with costs to the Defendant to be agreed and in oefault thereof, to be taxed . ••••••••••••••••• 0 •••••••••••••••••••••••• 0 •••• H. Chibomba SUPREME COURT JUDGE ................ ~~ . E. H. Hamaundu SUPREME COURT JUDGE ----- "- c=z-- --C~_ ~ RM. C. Kaoma SUPREME COURT JUDGE .......•.......