Davies Chilufya and Ors v Lucho Real Esates Limited and Ors (APPEAL NO. 332/2023) (22 August 2024) – ZambiaLII

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 332/2023 HOLDEN AT LUSAKA (Civil Jurisdiction} BETWEEN: DAVIES CHILUFYA & 13 OTHERS APPELLANT AND LUCHO REAL ESTATES LIMITED 1 RESPONDENT ST HARRY KUNDA RESPONDENT 2ND EVANS MHAMBI RESPONDENT 3RD GERMANO MUTALE KAULUNGOMBE RESPONDENT 4 TH KENNEDY MAMBWE RESPONDENT STH PETER CHAPUSWIKE RESPONDENT 6TH CORAM: KONDOLO SC, MAJULA, BANDA-BOBO JJA ON: 7th May 2024 and 22nd August, 2024 For the Appellants: Not in attendance For the Respondents: Not in attendance JUDGME NT KONDOLO SC JA, delivered the Judgment of the Court. Cases Referred To: 1. American Cyanamid v Ethicon Limited [1977) AC 396 J2 of 18 2. Shell BP Zambia Limited v Conidaris & Others (1975) ZR 3. John Chisata v The Attorney General SCZ/3/1992 4. Madison General Insurance Company Zambia Limited v African Banking Corporation CAZ/310/2021 5. The Minister of Home Affairs & The Attorney General v Lee Habasonda (2007) ZR 206 6. Solomon Laban Jumbe Ngwenya & Others v Hope Chanda & Focus Financial Services Limited CAZ/001/2021 7. Tiger Animal Feeds Limited v Collins Bowa & 7 Others CAZ/136/2022 8. William David Carlisle Wise v E.F. Hervey Limited (1985) Z.R.1 79 (S.C. Statutes Referred To: 1. High Court Rules, Chapter 27 of the Laws of Zambia 2. Order 38 Rule 37, Rules of the Supreme Court, Whitebook (RSC) 1999 Edition 1.0 INTRODUCTION 1.1 This is an appeal against the Order of Hon . Mrs. Justice E.P. Mwikisa delivered on 18th August, 2023, under cause No. 2023/HPI 1218. 1.2 We shall refer to the Plaintiffs as the Appellants and the Defendants as the Respondents. J3 of 18 1.0 BACKGROUND 1.1 According to the Appellants, they were sued as co-defendants together with one Paul Moonga by the Plaintiff, Galaunia Farms Limited under Cause No. 2020/HP/0539 for illegally occupying its land. 1.2 That the parties settled a Consent Settlement Order accepting that the land belonged to the Plaintiff therein who would be reimbursed by the co-defendants in the sum of K22,500,000 and the Plaintiff would have no further claim to the land whose extent was 71. 5 hectares. 1.3 The Appellants claim that the Co-Defendants set up Lucho Real Estates Limited, the 1st Respondent, as a special purpose vehicle to manage and equitably distribute the 71. 5 hectares to the Co Defendan ts. 1. 4 High Court Proceedings 1.5 Plaintiff's Case 1.6 Dissatisfied with the manner in which the 1st Defendant was distributing the land, the Appellants herein decided to commence an action by writ of summons on 14th July, 2023 against the Respondents herein claiming the following; J4 of 18 1. An Order for the immediate account of the monies realized from the sale of the properties 2. An Order to account or disclose the number of plots that have remained unsold 3. An Order of Interim injunction restraining the Defendants from accessing the 1st Defendant's Bank Accounts and to restrain them from selling off the remaining plots pending the determination of the action or further Order of Court; 4. Punitive damages on account of the Defendants' conduct; 5. Any other reliefs that the Court may deem fit; 6. Costs of and incidental to these proceedings. 1.7 The writ of summons was accompanied by a statement of claim averring that the said land in extent of 71.5 hectares was subdivided into 848 plots. They were each to be sold at the sum of K40,000 and it was agreed that some of them be sold to raise the K22,500,000 earlier agreed to be paid to Galaunia Farms under the Consent Settlement Order 1n Cause No. 2020/HP/0539. JS of 18 1.8 That the 1st Respondent company was incorporated as a special purpose vehicle whose purpose was to manage the process of paying off Galaunia Farms and thereafter parceling out the remaining land to the beneficiaries (Appellants) who were the Co Defendants in the Galaunia Farm Case. 1.9 That the sum of K33,920,000 was raised from the sale and Galaunia was paid its dues of K22,500,000. 1. 10 The Appellants averred that the 2nd to 6th Respondents became shareholders and directors of the 1st Respondent without consulting the Appellants and fraudulently converted the company to their own benefit to the exclusion of all other beneficiaries. 1.11 That the Respondents made numerous false representations to the Appellants and in the meantime replaced the genuine beneficiaries with their friends and associates, thus excluding the Appellants from benefiting from the land. 1.12 The particulars of fraud included secret incorporation of the 1st Respondent, non-disclosure of the number of plots sold and associated costs. 1.13 That the Appellants have suffered inconvenience and loss as a result of the Respondents' actions. J6 of 18 2.0 Defence 2. 1 The record of appeal does not contain any defence filed by the Respondents. 3.0 Plaintiffs' (Appellants) Application for an Injunction 3.1 The Appellants applied for an injunction pursuant to Order 27 Rule 1 of the High Court Rules (HCR) as read together with Order 29/L/35A and 291/76A of the Supreme Court Rules Whitebook (SCR) seeking inter alia an order that the Respondents render an account vis-a-vis the activities of the 1st Respondent and to restrain the Respondents from further parceling out the remaining land. 3.2 The summon was supported by an affidavit which basically recounted the contents of the statement of claim and stated that the Appellants would suffer irreparable loss if the injunction was not granted. 3.3 The Appellants also filed skeleton arguments submitting that Order 27 Rule 1 HCR provides that the Court can issue an injunction where the subject matter of an action is in danger of being wasted, damaged or alienated. J7 of 18 3.4 The case of American Cyanamid v Ethicon Limited 111 in which it was explained that an injunction must be granted where the Applicant shows that he has an arguable claim of right and that he will suffer irreparable injury if the injunction is not granted, was relied upon. Reference was made to Order 29/ 1/2 RSC and the case of Shell BP Zambia Limited v Conidaris & Others 1 21 which further expound on the principles enunciated in American Cyanamid case, supra. 3.5 The Appellants cited a number of other authorities all supplementing the principles in the cited cases. 3.6 The trial Court was asked to grant the injunction so as to maintain the staus quo. 4.0 Respondents' Case 4.1 The record of appeal does not contain any affidavit in opposition filed by the Respondents. 5.0 HIGH COURT DECISION 5.1 The learned High Court Judge delivered a very short decision in a single paragraph of three lines entitled "ORDER" in which she simply stated that she had refused to grant the order of JS of 18 injunction and had in fact decided to dismiss the whole action because it does not disclose a cause of action. 6.0 APPEAL 6.1 Dissatisfied with the decision, the Appellants have appealed on 3 grounds as follows; 1. The learned trial Judge erred in law and fact when she dismissed the action on account that the claim did not disclose a cause of action without advancing reasons for her decisions. 2. The learned trial Judge misdirected herself both in law and fact when she failed to appreciate that the nature of the Appellants' claims as actionable at law. 3. The trial Court misdirected itself when it dismissed the Appellants' action on her own motion without any formal application from the Respondents or having sight of a defence from the Respondents on record. J9 of 18 7 .0 Appellant's Arguments 7.1 Ground 1 7.2 It was submitted in ground 1 that contrary to the learned trial Judge's finding, the Appellant had in fact met the threshold that defines a cause of action. According to the Appellant, Phipson on Tort [no citation provided] defines a cause of action as a legal claim or basis for a law suit in which the Plaintiff must show that he has a legally recognized interest in the matter in which he has taken to Court and for which he has suffered loss and is entitled to relief. 7 .3 It was submitted that the facts set out in the statement of claim disclosed a clear cause of action on behalf of the Appellants who claim to have been fraudulently dispossessed of their possessory rights to the individual portions of land to which they were entitled after the 1st Respondent paid off Galaunia Farms. 7.4 Ground 2 7.5 The arguments advanced in ground 2 save for citing a different case, were similar to those advanced in ground l. 7.6 Ground 3 7. 7 In ground 3, it was argued that the trial Judge erred in dismissing the Appellants' case on her own motion in the JlO of 18 absence of the Respondents filing any defence and in the absence of the Respondents making any application to dismiss the action for non-disclosure of a cause of action. 7.8 It was further noted that the Order by the learned trial Judge was bereft of any analysis or reasons for the Court's decision to dismiss the action for non-disclosure of a cause of action. 7.9 The Appellants submitted that the reasoning in the case of John Chisata v The Attorney General 131 was applicable in casu. In the cited case the Supreme Court held that Courts rarely on their own motion order amendments of pleadings unless they come within the terms of Order 8 of the High Court Rules (HCR) so as to eliminate all statements which may tend to prejudice, embarrass or delay the fair trial and the affected party should be called upon to comment on the proposed order. 7 .10 We were urged to allow the appeal. 8.0 RESPONDENTS' ANSWER 8.1 It appears that the Respondents not only failed to appear at the hearing of this appeal but also failed to file their heads of argument. Jll of 18 • 9.0 ANALYSIS AND DECISION 9 .1 When the matter came up for hearing, both parties were not in attendance, and we announced that we would determine the appeal on the basis of the filed process and adjourned the matter for Judgment. 9.2 We have considered the record of appeal and the arguments advanced by the Appellants and ruminated over the Judgment rendered by the learned trial Judge. 9.3 We shall proceed by addressing the three grounds of appeal as one. The Appellants filed a writ of summons and applied for an injunction. There is no defence on the record and neither is there an affidavit nor arguments opposing the application for an injunction. 9.4 We note that the learned trial Judge proceeded sua moto to not only decline to grant the injunction but she also dismissed the main matter without providing any reasons for either decision. 9.5 In the Zambian judicial system there is no room for arbitrary decisions. The general principal is that parties must not only be heard but that the Court must provide a reasoned decision to enable them understand the outcome of the case and make it J12 of 18 • easier for them to decide on the next course of action. The Court has an inescapable obligation to reveal its mind. 9.6 The Order made by the trial Court is short enough to reproduce and reads as follows; ORDER I refuse to grant the order of interim injunction by application filed into Court, on 14th July, 2023, and infa ct dismiss the whole matter herein as it does not disclose a cause of action. Matter dismissed. Leave to appeal is granted. 9. 7 The Appellants filed a writ of summons with a detailed statement of claim clearly setting out their claims, the particulars of alleged fraud and the reliefs sought. 9.8 Similarly, the application for an injunction was supported by an affidavit and skeleton arguments setting out the facts upon which the application was made, the reliefs sought and the law relied upon. 9. 9 It is notable that there is no defence on the record and no affidavit or skeleton arguments opposing the application for an injunction. The trial Judge's Order made no reference to any J13 of 18 • pleadings and did not state whether the parties appeared before her in chambers or open Court. 9 .10 The trial Judge was entitled to come to the conclusion that she did, but she was not entitled to pronounce an outcome without providing reasons. We as Judges, do not enjoy the luxury of making arbitrary decisions. There is a requirement to deliver reasoned Judgments. 9.11 In the case of Madison General Insurance Company Zambia Limited v African Banking Corporation (4l, Chishimba JA, in delivering the Judgment of this Court referred the parties to the case of The Minister of Home Affairs & The Attorney General v Lee Habasonda 151 where the Supreme Court guided that every Judgment (this includes Rulings) must show a review of the evidence, where applicable, a summary of the arguments, findings of fact, reasoning of the Court and the application of the law and authorities to the facts. 9.12 Chishimba JA, further referred to the Judgment of this Court in the case of Solomon Laban Jumbe Ngwenya & Others v Hope Chanda & Focus Financial Services Limited l 61 where we said that, even though the appeal was against an extempore J14 of 18 ' Judgment delivered by the High Court, the reasoning applies to any decision made by any Court, and this is what we said; "It is undesirable for a trial Court (Judge) to render an unreasoned Ruling ...... Further, ex tempore Rulings are impromptu and do not entail the same preparation as reserved decisions. Such a Ruling whether the Judge gives it orally immediately after a hearing or publishes a written one at a later stage, must indicate briefly the index, introduction, facts and a clear articulation of the points of determination, the relevant evidence, the applicable law to the facts of the case, the findings, reasoning and conclusion." 9.13 The reasoning in the cited cases applies to all decisions, whether they be titled as Orders, Rulings or Judgments and whether they be delivered orally or in writing. It is essential that not only the parties to a matter but even third parties who might have an interest in it, are able to understand why a Court has decided the way it has. 9.14 In casu, the learned trial Judge made two decisions, one denying the injunction and the other dismissing the main J15 of 18 • matter and neither of the two were reasoned. Most unfortunately, in casu, the lower Court completely ignored the guidelines on Judgment writing and abdicated its duty to reveal its mind. 9. 15 The application for an injunction was made ex parte and as a matter of practice Judges regularly deliver decisions on interlocutory ex parte applications without calling the parties. Some simply grant the application by signing an order prepared by the Applicant. Where this happens, the Order must state that the application is granted pending an inter partes hearing on a date endorsed on the Order. 9 .16 Where an interim ex parte application is refused, some Judges simply scribble their decision on the summons, sometimes with reasons given and sometimes with no reasons. Should exigency require that the decision be scribbled on the summons without indicating the reasons, the scribble must indicate that a reasoned decision will follow and it should be rendered within the shortest possible time. 9 .1 7 The decision to dismiss the main matter sua moto was against judicial norms. In the case of Tiger Animal Feeds Limited v Collins Bowa & 7 Others CAZ/ 136/2022 we allowed an J16 of 18 • appeal against the decision of the learned Registrar of the High Court who proceeded to render a decision on an inter partes application without calling the parties to appear before her. 9.18 In arriving at our decision, we assumed the posture taken by the Supreme Court in the case of Natural Valley Limited v Zambia Revenue Authority and the Attorney General SCZ/ Appeal/ 12/2021 at pages 19 and 20 where the Court interpreted Order 30 Rule 6A of the High Court Act as amended by S.I. No.58 of 2020 and stated that where a matter has been filed inter partes, the parties have a legitimate expectation to appear before the Court on the hearing date and a decision arising from proceedings where the parties did not appear before the Court deserves to be declared a "no decision". 9 .19 This reasoning is true of any originating process. Parties are entitled to their day in Court and in casu, we find that the lower Court's decision to dismiss the main matter sua moto was a no decision. 9 .20 With regard to the trial Judge's finding that the Appellant had not disclosed a cause of action, we refer to the case of William Jl 7 of 18 .. ,s, David Carlisle Wise v E.F. Hervey Limited where the Supreme Court held as follows; 1. Pleadings serve the useful purpose of defining the issues of fact and of law to be decided; they give each party distinct notice of the case intended to be set up by the other; and they provide a brief summary of each party's case from which the nature of the claim and defence may be easily apprehended; 2. A cause of action is disclosed only when a factual situation is alleged which contains facts upon which a party can attach liability to the other or upon which he can establish a right or entitlement to a Judgment in his favour against the other. 9.21 We find that the writ of summons and the statement of claim clearly set out the facts in a manner which was easy for the Respondents to apprehend the claim and mount its defence. The Appellants' perceived rights and the remedies sought were also clearly set out. The Appellants disclosed a clear cause of action which can be determined on the merits. J18 of 18 9.22 This appeal therefore succeeds with costs to the Appellants and we Order that the matter be referred back to the High Court to be adjudicated by a different Judge. M.M. KONDOLO SC COURT OF APPEAL JUDGE r ········~ ············· B.M. MAJULA A.M. BANDA-BOBO COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE