Chidzankufa v Ned Bank Malawi Ltd (70 of 2009) [2010] MWSC 5 (19 January 2010)

IN THE MALAWI SUPREME COURT OF APPEAL AT BLANTYRE MSCA CIVIL APPEAL NO. 70 OF 2OO9 (Being High Court Comm. Case No. 156 of 2OO9) BETWEEN: V. D. CHIDZANKUFA LlaV & C DISTRIBUTORS..... ....... APPtrLLANT NEDBANK MALAWI LIMITED ..... RESPONDENT - alto - CORAM: THE HON. JUSTICE TEMBO, SC, JA Chokhotho, Counsei for the Appellant Kasambara (absent), Counsel for the Respondent Balakasi, Official interpreter Singano (Mrs), Senior Personal Secretary RULING TEMBO, SC, JA This is an inter-partes application for stay of execution pending appeal. It has been made b), the appeilant pursuant to Order 59 Ruie 13 of the Rules of the Supreme Court, upon lodging of his notice of appeal, before this court. The appellant has raised the follorn'ing grounds of appeal, nameiy, that the learned Judge erred in law; (a) by failing to consider delay as a factor u'eighing against the granting of an order of a specific performance; (b) by faiiing to consider that there were no terms of the charge for r,r'hich specific performance could be granted; (c) by ordering that the terms of tire charge to be entered between the parties must be determined by the respondent when in the normal course of events a charge is entered subject to the agreement of the parties; (d) by failing to consider the facts that the respondent has dirt5' hands in that they are failing to fuli5' account for the trucks u,hich they seized from the appellant and that the seli of trucks was done in bad faith before granting the equitable relief; and (e) by ordering the respondent to prepare a mortgage deed on its own terms when the same was not pleaded b), either parqy. it is also the contention of the appellant that the decision of the Commercial Court is asainst the u'eisht of the evidence. The respondent in the instant case sought the foliowing orders from the Commercial Court, namely: (a) an order for specific performance requiring the appellant to execute a mortgage deed in favour of the respondent; (b) alternativeiy, an order that the Registrar of the High Court executes the mortgage on behalf of the appellant and that the Deed Registrar registers the said mortgage as if it was executed by the appellant; and (c) further, alternativeil', an order tirat the respondent be at iiberty to sell the appellant's property situate at Luchenza Trading Centre registered as Deed No. 80402. The Commercial Court held the matter on 4ft November,2OO9, and immediately upon hearing the arguments of the parties, Kapanda, J; pronounced judgment in favour of the respondent. Thus, the learned Judge ordered that the appellant should enter a mortgage deed in favour of the respondent and the mortgage deed be drafted by the respondent. The learned Judge reserved his reasons for the orders orally made to be expressed in a written judgment which would be made on a date to be fixed. The learned Judge then ordered the parties to comply with his order for specific performance u'ithin 30 dalrs from 4th November,2OO9, thus until 4il' December, 2OO9. On Sth November, 2OO9, the appellant made an ex-parte application for stay of execution pending appeal before the Commercial Court, which the court ordered to be heard inter-partes. The respondent did not file affidavit evidence in opposition of the application for stay, although its counsel filed skeleton arguments. On 1Sth November,2OO9, when the Commercial Court heard the appeilant's application for stay, counsel for the respondent was absent from court. Upon hearing the appeliant on the application, the court reserved its ruling to be delivered, later, on a date to be fixed. Be that as it ffiay, the learned Judge, in doing so, t'erbally assured counsel in the matter that he would deliver the ruling u'ithin the 30 day- period r.r'ithin u'hich the parLies were required to complv u'ith the order of specific performance. It is apposite for the court to note that until today, the Commercial Court has not yet made its formal u'ritten judgment in the matter and it has not yet made any ruling on the appeilant's appiication for stay. As j per the applicable rules, an application for stay of execution made before this court is not made by v,'ay of appeal against any refusal of a similar appiication made before the High Court. A partv is at liberty to make an application therefor before this court after first having done so at the court of first instance. The jurisdiction is concurrently exercised by the High Court and this court. The instant inter-partes appiication was made on 9th December, 2009. A notice of adjournment for the hearing of the appiication today \^/as dul1y served on and acknowiedged by learned counsel for the respondent on 14tn day of January, 2OIO. Besides, before the court resolved to proceed with the hearing of the application in the presence of counsel for the appellants only, the Court Clerk sought confirmation by phone from and if Mr. Kasambara, counsel for the respondent, was ready and v,'illing to attend the hearing as scheduled and noti.fied. Mr. Kasambara gave his assurance that he would attend the hearing. Be that as it mal', Mr. Kasambara did not show up for the hearing, which was originally scheduled for 9:00 am until 9:50 am when the court resolved to proceed with the hearing in his absence. Consequent upon the High Court decision, now appealed against, the respondent has prepared a mortgage deed backdated to the year 2005 at 4ok above the base lending rate. The mortgage deed makes the debt payable on demand without any repayment schedule which, in the view of the appellant, means that upon its execution the respondent can immediately demand the whole of the sum due. It is also the viern' of the appellant that if he refuses he would be held to be in contempt of the court and that the execution of the mortgage deed now would render the appeal nugatory, The property of the appellant over which the respondent wants the appellant to create the mortgage is residential premises. lt is the one and oniy home where the appellant and his family reside. lf it is sold pending the hearing of the appeal, the appellant and his family will be ruined. It is therefore the view of the appellant that if the property is soid under the terms of the proposed mortgage, which gives the respondent the po\ /er to sell at any time, the appellant and his family will have nowhere else to stay. Besides, if the appellant succeeds in his appeal, the house, to u'hich the appellant and his family are sentimentally atlached, n'ill not be given back to them. On the other hand, there is no risk on the part of the respondent of losing its security in that the appellant u'ould not sell the property prior to the hearing and determination of the instant appeal given the inhibition order of the High Court dated 14tn August, 20O9. Besides, the property is worth several fold in excess of or beyond the alleged debt in the instant case. Reverting to the appiicable law, the position is as follows:- The grant or refusal of the stay is a discretionary matter for the court: AG v Emerson (1889), 24 Q. B. D., pp 58, 59. The court will grant a stay where the special circumstances of the case so require: Tembo v Industrial Development Group [1993] f6 A MLR 878. Where an unsllccessful defendant seeks a stay of execution pending an appeal to the Court of Appeal, it is a legitimate ground for granting the application that the defendant is able to satisfy the court that without a stay of execution he r.r,ill be ruined and that he has an appeal which has some prospect of success: Linotype-Hell Finance Ltd v Baker 19921, 4 AII ER p. 887. in Federal Commissioner of Taxation v Myer Emporium Ltd (No.1) (l986) 160 C. L. R. 220, at pp. 222-3 Dawson J said: "It is ulell established bg authonty that the discretion utltich it confers to order a stag of proceedings is only to be exercised where special circumstances exist which justtfy departure from the ordinary rule that a successful litigant is entitled to the fruits of his litigation pending the determination of any appeal: see e.g. The Annot Lgle (1886) 11 P. D. 714, at p. 116: Searborough u Lew's Junction Stores Ptg. Ltd [1993] V. R. 129, at p. 130. Special circumstances justtfaing a stay utill exist where it ls necessary to preuent the appeal, if successful, from being nugatory: see Wilson u Church (No. 2) (1879) 12 CLr. D. 454, at p.458; Klinker Knitting Mills Ptg. Ltd. a L'Union Fire Accident and Generq.l Insurance Co. Ltd: (1937) V. L,R. 142, Generallg that utill ocatr when, because of the respondent's financial state, there is no reasonable prospect of recouering moneAs paid pursuant to the judgment at first instance. HouLeuer, special circumstances are not limited to that situation and utill, I think, exist uLtere for uhateuer reason, there is a real nsk that it uiT not be possible for a successful appellant to be restored substantially to his fonner position if the judgment against him is executed: see McBride u Sandland (No.3) (1918) 25 C. L. R. 369, at p. 375." Regard being had to the foregoing position at law, would the circumstances of the instant application merit a grant of the appeliant's application? It is expedient to note the following facts: the court has not had occasion to peruse the judgment of the lower court now appealed against given the fact that the learned Judge has not yet prepared and made his formal u'ritten judgment in the matter. However, a glance at the notice of appeal clearly shows that the appellant is raising substantial grounds against such decision which may render the appeal to be successful. The appellant has substantially shown that if his ) appeal becomes successful, it will not be possibie for the appellant to be restored substantially to his former position if the judgment against him is executed nou', in that once the house is sold it would not be given back to him. In addition, the appellant has shown that without a stay of execution the appellant and his family will be ruined, Besides, the mortgaged property is of hrgh economic value and that there is an inhibition order against the appellant, which restrains him from disposing or like wise dealing rn ith the property. It is therefore the considered view of the court that the appellant has successfully demonstrated that there are special circumstances in the instant case which would justifl' a grant of an order for stay of execution. The order to be valid until the determination of the appeal before the court. It is so ordered. Costs in the cause. MADE in Chambers this 2oil1 day of January , 2070 at Blantyre. JUSTICE OF APPEAL