Tombwe Processing Limited v Bank Storage Limited and Anor (CAZ/08/319/2018) [2019] ZMCA 389 (7 March 2019)

IN THE COURT OF APPEAL OF ZAMBIA CAZ/O8/ 319/2018 Rl HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: TOMBWE PROCESSING LI APPELLANT AND BAK STORAGE LIMITED 1 stRESPONDENTS SALTLAKE HOLDINGS LIMITED 2 nd RESPONDENTS BEFORE: The Honourable Mrs. Justice P. C. M. Ngulube in Chambers. For the Appellant: W. Banda, Messrs Wilson & Comhill, Y. Yosa, and Ibrahim, Messrs Musa Dudhia & Company For the Respondents: M. L Sikaulu, L. Sinkasanka Messrs SLM Legal Practitioners RULING Legislation referred to: 1. The Court of Appeal Rules, Statutory Instrument No 65 of 2016 2. High Court Act Chapter 27 of the Laws of Zambia 3. The Supreme Court Practice, White Book 1999 Edition Cases referred to: 1. Zambia Revenue Authority v Post Newspaper (z) Limited SCZ Judgment No 18 of 2018. R2 2. Silwamba v Lamba Simputo (2010) ZR SC (45) volume 1 3. Ketchum International Plc v Group Public Relations Holdings Limited and Others (1996) 4 All E. R. 3fourteen. 4 . Sonny Paul Mulenga, Vismer Mulenga, Chainama Hotels Limited vs Investment Merchant Bank Limited (2000) Z. R 101 (SC). 5. Walusiku Lisulo v Patricia Anne Lisulo SCZ Judgment No 2 1 of 1998. 6. Sata v Chanda Chimba III and Others (2011) ZR 45 vol. 2 . 7. Feamought Systems Ltd v Feamought Systems (Z) Ltd and Another SCZ Judgment 13 of 2017. This is the appellant's application for an order of stay execution of a Ruling fron1 the Court below. At the hearing of the matter, Mr. Banda, Counsel for the appellant submitted that he would rely on the affidavit in support and skeleton arguments filed before the Court below as well as the appellant's affidavit in support and skeleton arguments filed on 4 th January, 2018 which argue the appellant's case for the grant of an order of stay of execution. Mr. Banda made oral submissions and stated that the application was unopposed as there was no affidavit in opposition on record and that instead, the respondents only filed skeleton arguments. He stated that a study of the record shows that in the lower Court, the application that was considered was that of review as opposed to an application for R3 special leave to review. He further stated that a careful look at page 12 of the record of appeal confirms this fact. Counsel submitted that the application sought by the appellant was for special leave to review the Court's Judgment based on the reasons deposed to in the affidavit in support. Mr. Banda pointed out that Order 39 of the High Court Act2 envisages two types of applications: 1. Review under Order 39 Rule 1 which must be done fourteen days after Judgment is delivered; 2. An application for special leave under Order 39 Rule 2. It was submitted that the conditions precedent for an application for review are not the same as those for an application for special leave and that conditions for special leave akin to an application for extension of time must show why the application was not made within fourteen days. It was submitted that on page R3 line 3 of the Ruling subject of this application, the learned Judge in the Court below indicated that the Judgment was rendered on 2 1st October, 2015 pending execution for three years . R4 It was submitted that no notice was filed to proceed with the execution and that it ought to be stayed as the plaintiffs case in the Court below is yet to be determined. In support of the application, Counsel cited the case of Zambia Revenue Authority v Post Newspaper (Z) Limited1 where the Supreme Court re-affirmed the two-fold test to consider when granting a stay of execution. These include: 1. prospects of success; 2. that the appellant will suffer irreparable damages if a stay is not granted. He prayed that the order for stay of execution be granted. On behalf of the appellant, Mr. Yosa submitted that a perusal of the Ruling delivered on 18th December 2018 dismissing the application for special leave reveals that the Judge dealt with it as if it was the actual review of the Judgment and that this is the grievance the appellant has brought before this Court. He went on to submit that the Court below did not deal with the application for extension of time within which to review the Judgment nor did it deal with principles applicable on review. It was further submitted that the Court below merely gave the background of the matter and went on to dismiss the application. It was also submitted that the Court below did not consider the circumstances RS and the reasons for the delay as well as factors that ought to influence the Court in extending time. In opposing the application, Mr. Sikaulu, on behalf of the respondents placed reliance on the skeleton arguments and list of authorities filed on 24th January, 2019. He stated that the respondents did not file an affidavit in opposition because affidavits are based on facts while skeleton arguments are concerned with the law. Counsel contended that non-filing of an affidavit in opposition does not prejudice the appellant nor does it amount to admission of the facts contained there under. It was further submitted that the principles for stay of execution are clear and that the appellant must demonstrate the likelihood of success. Further, that there is no evidence to support the appellant's assertions that they only received the Judgment three months after its delivery. In reply Mr. Banda submitted that page 51 of the record of appeal indicates what transpired in the Court below. Regarding the affidavit, he submitted that a requirement to file an affidavit is akin to an application under Order 21 of the High Court Rules and non-response constitutes an admission. In support of this position, Counsel cited the R6 case of Silwamba v Lamba Simputo2 and submitted that while he agrees with Counsel for the respondents that affidavits contain matters of facts, objections must be specifically made so that the other party becomes aware of the contents. I have considered the affidavit 1n support of summons for stay of execution sworn by Sander Danker, the Deputy Managing Director of the appellant Company. He averred that on 21 st October 2015, the Court below delivered a Judgment in favour of the respondents on their counterclaim to the effect that the appellant must pay the sum of US$ 2 190 000, being the value of 6250 bags of green tobacco to the respondents. He further averred that the appellant only learned about this on 11 th February, 2016 when the respondents demanded payment pursuant to the Judgment. He averred that the Judgment is unjust to the appellant because firstly , the appellant did not receive notice of the trial dates and as such did not participate at trial. Secondly, that it appears the Judgment was based on committal proceedings in December, 2009, where the appellant's representatives gave evidence but the said proceedings were discontinued on 10th January 2010. It was averred, that the Judgment is not clear how the appellant was R7 found liable to pay the respondents on the basis of receiving stolen property. It was further averred that on 12th February 2016, the appellant made an application for special leave to review Judgment out of time and was granted a stay of execution pending the hearing of the application. By a Ruling dated 17th December, 2018, the High Court dismissed the appellant's application and granted leave to appeal. Being dissatisfied with the said Ruling, the appellant filed notice of appeal and memorandum of appeal before this Court on 18th December, 2018. On the same day, the appellant applied to the High Court for an order to stay execution of judgment pending appeal which was not granted. The deponent avers that the Judgment sum of US $ 2 190 000 is a colossal amount which the appellant is unlikely to recover should execution be levied in the event that the amount is found to not have been due to the respondents. That this is exacerbated by the fact that the respondents are foreign entities that do not have any assets in Zambia. He prayed that the order of stay of execution of the Judgment of the Court below be granted to avoid the pending appeal from being rendered nugatory and academic. R8 I have had sight of the skeleton arguments in support of the application for Stay. Order 59 Rule 13(1) of the Rules of the Supreme Court3 reads in part that - Except so far as the Court below or the Court of Appeal or a single judge may be otherwise direct- (a)An appeal shall not operate as a stay of execution or of proceedings under the decision of t he Court be low; It was submitted that the Court has the jurisdiction and discretion to grant an order of stay of execution where sufficient reasons are provided by the appellant and that in order for this Court to exer cise its discretionary powers, it must be satisfied that the appeal would be rendered nugatory. In support of this, the case of Ket chum International Pie v Group Public Relations Holdings Limit ed and Others3 was cited in which Stuart-Smith W stated at page t hat 30 that- "Where an unsuccessful defendant has to obtain leave to appeal and seeks a stay of execution, for example in a possession action, this court will normally grant a stay if it grants leave to appeal, since otherwise a successful appeal will be of no effect." R9 It was submitted that in casu, the appellant sought special leave of the Court to review the Judgment dated 21 st October 2015 but the Court below dismissed the application with leave to appeal. Further, that in the event that the appellant is successful on the appeal, the Court below will be directed by this Court to review the Judgment and render a decision on whether that Judgment ought to be reopened. It was also submitted that if execution of the Judgment is allowed to proceed, the appeal will be rendered nugatory and academic. Secondly, the Court need to be satisfied that there are prospects of success. In this respect, it was submitted that in the case before this Court, the appeal has good prospects of success in that the Court below treated the application for special leave to review as if that was the application for review thereby nonsuiting the appellant. Further, that the Court below, on the application before it, ought to have been concerned with the reasons for the delay, which were in fact unchallenged, and the principles of extending the time within which to review the Judgment. It was submitted that the appeal before this Court has good prospects of success. R10 Thirdly, that the Court should be satisfied that there would be an issue of potential waste of costs and time in the event that the Sheriff of Zambia swings into action to execute on a Judgment that is likely to be reopened as a result of being reversed on appeal. In summation it was submitted that the appellant has demonstrated that the appeal has good prospects of success and that unless a stay of execution is granted, the appeal will be rendered nugatory and academic and prayed that this Court exercises its discretion in favour of the appellant. The respondents did not file any affidavit in opposition but filed skeleton arguments on 24 th January 2019 and submitted that the application before this Court was made in the Court below where in the Ruling dated 4 th January, 2019, the learned Judge found that the appellant had failed to demonstrate sufficient reasons for staying execution of the Judgment dated 21 s t October 2015. It was further submitted that this Court is invited to make a determination on whether the Ruling of the High Court dated 17th December, 2018 may be stayed pending appeal. The case of Sonny Paul Mulenga, Vismer Mulenga, Chainama Hotels Rll Limited vs Investment Merchant Bank Limited4 was cited. In this case it was held "That an appeal does not automatically operate as a stay of execution and it is utterly pointless to ask for a stay solely because an appeal has been entered. More is required to be advanced t o persuade the court below or this Court that it is desirable, necessary and just to stay a judgment pending appeal. " It was contended that the a pplication for stay of execution should be dismissed b ecause the appellant h as failed to demonstrate that th e p ending appeal has merit and has chances of success. It was submitted that this h as been revealed in the m emorandum of appeal in which the grounds of a ppeal attack the d ecision of the High Court's refusal to grant special leave to review. It was further contended tha t the settled law surrounding special leave to r eview or leave to review itself, the applicant ought to d emonstrate that it intends to bring fresh eviden ce that was not brought to the attention of the Court at the time of Judgment. It was submitted tha t in casu , the appellant failed to highlight any fresh eviden ce it seeks to present in t he event that its a pplication for special leave to review is grant ed and th at in t h e a bsen ce R12 of such evidence, the High Court cannot be faulted for refusing to grant the application for s p ecial leave to review. In support this argument, the case of Walusiku Lisulo v Patricia Anne Lisulo5 was cited. In this case, the Su preme Court held t h at: It is noted that the power to review is discretionary for the judge and there must be sufficient grounds to exercise that discretion... ... it can not be said that it was fresh evidence for the purpose of review under Order 39 Rule 2 of the High Court Rules to be available, the party seeking it must show that he has discovered fresh material evidence which would have had material effect upon the decision of the court and has been discovered since the decision but could not with reasonable diligence have been discovered before .... the fresh evidence must have existed at the time of the decision but had not been discovered before". In relation to the Walusiku case, it was submitted that the grounds upon which the appellant was seeking special leave to review judgment cannot legally be the basis for review because they do not border on any disclosure of fresh evidence. R13 It was contended that the appellant has failed to satisfy the critical ingredient required for a review of judgment thus the High Court was on firm ground to have dismissed the application for lack of merit. Consequently, the pending appeal has no prospects of success because the Court of Appeal will consider whether or not the appellant has disclosed fresh evidence that is material for special leave to review have been granted by the High Court. Further, it was submitted that the power to review is not a mechanism to afford a dissatisfied litigant the chance to argue for an alteration to bring about a result considered more acceptable. It was contended that the appellant's application and appeal are an attempt to delay the 2 nd respondents' right to enjoy the fruits of its Judgment which was rendered on 21 st October, 2015 and has been pending execution for three years . Additionally, the case of Sata v Chanda Chimba III and Others6 was cited. In this case it was held inter alia that- "The rationale for the stringent conditions or criteria in exercising the discretion to grant a stay is that a successful party should not be deprived immediate enjoyment of the R14 fruits of judgment or ruling, unless good and sufficient grounds are advanced or shown." The respondents' advocates prayed for the dismissal of the application with costs. In considering whether or not to grant the order sought, I have considered the Judgment of the Court below dated 21 s t October, 20 15, the Ruling of the Court below dated 17th December, 20 18, the grounds of appeal, affidavit evidence, skeleton arguments and oral submissions by Counsel. The question for determination is whether the appellant has furnished sufficient reasons to enable this Court to exercise its discretion to grant an order for stay of execution. The pending appeal is set to assail the Ruling of the Court below which denied the appellant special leave to review its Judgment dated 21 s t October, 2015, the reasons being that they did not receive notice of the trial dates and therefore could not attend. Secondly, that it appears the Judgment was based on committal proceedings in December, 2009, at which the appellant's representatives gave evidence but the same were discontinued on 10th January 2010, and lastly that the Judgment is not clear how the appellant was found liable to pay the respondents on the RlS basis of receiving stolen property. Th irdly, that the Ruling does not meet the standard surrounding the writing of legal Rulings or Judgments. In the case of Fearnought Systems Ltd v Fearnought Systems (Z) Ltd and Another7 the Supreme Court guided as follows : Clearly, the application for review is a very crucial stage because it is at that time that the following should be established or shown: (i) that fresh evidence has been discovered which would have had material effect on the judgment or decision; (ii) that the evidence has been discovered since the judgment or decision; (iii) that such evidence could not, with due diligence, have been discovered before; and (iv) that such evidence does not comprise events that have occurred for the first time after de livery of judgment. The appellant has argued that at the leave stage all that the Court below needed to have considered was whether the appellant had raised sufficient reasons for h aving not applied for a review within fourteen days of the Judgment. I have carefully read the Ruling in question and I agree with Counsel for the appellant that it only summaries the facts R16 and renders the verdict without any reasoning on how the said verdict was arrived at. Indeed, the Learned Judge in the Court below treated the application for special leave to review as if it was an actual application for review. Having considered the submissions and authorities cited, I note that a stay of execution pending appeal is a discretionary remedy. While a party is not entitled to it as of right, the Court's discretion must be exercised judiciously on well-established principles. The prospect of success as well as irreparable damages that one would suffer if a stay is not granted are key considerations in granting an order for stay of execution. Coming back to the application before me , I agree with Counsel for the appellant that at leave stage, all that was required to be done was to consider the r easons why the application was not made within fourteen days of the said Judgment. Having carefully analysed the facts surrounding this matter, one cannot tell what informed the Judge's decision to deny the appellant special leave for r eview. Further, I have also considered the fact that the amount of money involved in this matter may not be easy to recover and the appellant may not be compensated in damage s should this Court find in its favour . R17 Order 59 Rule 13(2) of the Rules of the Supreme Court3 reads in part that- " .... But the court is likely to grant a stay where the appeal would otherwise be rendered nugatory, or the appellant would suffer loss which could not be compensated in damages. The question whether or not to grant a stay is entirely in the discretion of the Court." Given the forgoing, I see prospects of success m the appeal and I exercise my discretion by granting the order of stay of execution of the Judgment of the Court below with costs to the respondents. Dated this the 7 th day of March, 2019. HONOURABLE MRS JUSTICE P. C. M NGULUBE COURT OF APPEAL JUDGE.