DCS Holdings Limited v Catwalk Boutique and Beauty Salon Limited (APPEAL NO. 144/2023) (20 June 2024) – ZambiaLII

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 144/2023 HOLDEN AT LUSAKA (Appellant Jurisdiction) ;; BETWEEN: J, <.. / . ..... ~--1 DCS HOLDINGS LIMITED APPELLANT AND CATWALK BOUTIQUE AND BEAUTY SALON RESPONDENT LIMITED Coram: Kondolo, SC, Majula and Banda-Bobo, JJA. On 7th May, 2024 and 20th June, 2024. For the Appellant: Mr. Z. M. Mubiana with Mr. M. Mbulakulima, both of Messrs N sapato and Company For the Respondent: N / A JUDGMENT Banda-Bobo, JA delivered the Judgment of the Court. Cases referred to: 1. Simon Lwando and Others v. ZCCM Investment Holdings Plc and Others (SCZ Appeal No. 83/2009) 2. Collett v. Van Zyl Brothers Limited (1966) ZR (CA) 3. Gilbert v. Hudlestone (1885) 28 Ch D 549 4. Ward v. James (1966) I. QB 243 5. General Nursing Council of Zambia v. Ing'utu Milambo Mbangweta (ZR) 105, Vol 2 (No year) 6. Kuta Chambers v. Concilia Sibulo (selected Judgment No. 36 of 2015) 7. Attorney General v. Seong San Company Limited 8. Chikuta v. Chipata Rural Council ( 1974) ZR 241 (SC) 9. New Plast Industries v. The Commissioner of Lands (SCZ J 8/2001) 10. Antonio Ventriglia and Another v. Finsbury Investments Limited (Appeal No.2of2019) 11. JCN Holdings Limited v. Development Bank (2013) 3 ZR 299 12. "Owners of the Motor Vessel 'Lillian S' v. Caltex Oil (Kenya) Limited (1989) KLR 19 Legislation and Other Works referred to: • Landlord and Tenant (Business Premises) Act, Cap. • Order 40 rule 6 of the High Court Rules • The Rules of the Supreme Court, White Book, 1999 Edition • Dr. Patrick Matibini, SC in his works, Zambia Civil Procedure, Commentary and Cases, Vol 2, page 1705 1.0 Introduction 1.1 This is a Judgment on an appeal against the Ex-tempore Ruling of Ya ngailo J, delivered in Chambers on 2nd March, 2023, in which she dismissed the appellant's application for an order for costs for lack of merit. The parties will be referred to as they appear in this Court. 2. 0 Brief Background 2. 1 The brief background to the matter is that the directors of the appellant and respondent companies were husband and wife, J2 but had divorced prior to the commencement of the proceedings in the lower court. 2.2 During the subsistence of their marriage, the respondent erected a building on the appellant's property, and from which it operated a boutique as far back as 2009. According to the respondent, it had been agreed that due to the relationship of the directors as a married couple, the respondent was to occupy the said premises free of rent. 2. 3 It would appear from the record that after the divorce, the appellant issued a notice of eviction upon the respondent, giving it only one month to vacate the premises. 2.4 It was that notice to vacate, which prompted the respondent to seek court redress by way of Originating Summons, claiming several reliefs. 3.0 Application to dismiss 3.1 Before the matter could proceed further, the appellant filed a Notice to Raise a Preliminary Issue in limine, seeking the dismissal of the respondent's action with costs. The appellant raised four issues on which it sought the court below to make a determination, which for purposes of this appeal are not J3 relevant to reproduce herein; but merely to state that the gravamen of the Preliminary Issue was that it questioned whether the respondent was a tenant of the appellant, and if it could apply for a new tenancy within the meaning and contemplation of the Landlord and Tenant (Business Premises) Act. 4.0 Decision of the Lower Court on the application to dismiss 4 .1 After due consideration of the affidavit evidence proffered by each party and the skeleton arguments, the learned Judge formulated the critical issue for determination as being whether there was a tenancy existing between the parties which is contemplated under the Landlord and Tenant (Business Premises) Act. 4.2 The learned Judge answered the question in the negative, stating that she found the tenancy relationship between the parties was not one contemplated by the Act. That as a result, the respondent could not apply for a new tenancy within the meaning of the Act. Based on her findings, she determined that the matter was wrongly commenced. J4 4.3 The learned Judge considered the effect of her determination that the matter was wrongly commenced. She also considered the respondent's application to deem the matter as began by Writ so that viva voce evidence could be adduced. The learned Judge agreed that the issues raised in the case were highly contentious, and it would be just, expeditious and economical disposal of the proceedings, if the matter was determined by hearing oral evidence. 4 .4 The learned Judge then ordered and directed that the matter be treated as though commenced by Writ of Summons. She further directed the respondent to file an amended writ of summons, statement of claim, list of witnesses and list and description of documents to be relied upon at trial and have them served on the appellants on or before 28th July, 2022. The appellant was directed to file its own documents upon receipt of the respondent's documents on or before 11th August, 2022. 4. 5 Finally, the learned Judge gave an unless order, where she said that:- "Unless the parties comply as directed herein, this matter shall stand dismissed for want of prosecution." JS 4.6 She ordered that costs be in the cause. The respondent did not comply with the unless order which meant that the matter stood dismissed. 5. 0 Summons for an Order for Costs 5.1 On 3rd November, 2022, the appellant filed Summons for an order for costs fallowing the dismissal of the matter. In the affidavit in support, the deponent of the affidavit alluded to the Ruling of the Court delivered on 14th July, 2022. That in that Ruling, the court had made an Unless Order, wherein the respondent was ordered to file a writ of summons and accompanying documents by 28th July, 2022. 5.2 It was deposed that the appellant had as at that date, not received, by way of service, the documents as ordered by court, and believed that the matter before that court, stood dismissed pursuant to the order given by the court in its Ruling. That the respondent's failure to obey an "unless order" granted by court rendered the matter dismissed. 5.3 That by virtue of such dismissal, the deponent believed that the court was at liberty to grant an order for costs in favour of the appellant. J6 6. 0 Decision on the Summons for an Order for Costs 6.1 After due consideration of the appellant's application and the law, the learned Judge stated that she did not award costs to either party in her Ruling of 14th July, 2022. She determined that the appellant was not entitled to costs in the matter, that in any event, was already dismissed and stands dismissed for want of prosecution. She thus found no merit in the appellant's application for costs and proceeded to dismiss it. 7. 0 This Appeal 7 .1 Riled by the dismissal of its application, the appellant signaled its intention to appeal by filing a Notice and Memorandum of Appeal on 15th March, 2023. Two grounds of appeal were fronted thus:- ( l)The learned Judge in the court below erred in law and fact when she dismissed the appellant's application for costs, contrary to the law and established jurisprudence entitling the appellant to costs in a dismissed matter, let alone, make an application for a cost order in such a matter; J7 (2)The learned Judge below erred in law and fact when she irregularly and improperly exercised her discretion to deny the appellant costs without any compelling reasons or indeed opposition to a cost order, contrary to the record and established jurisprudence which clearly favour an order for costs for the appellant in such a circumstance. 8.0 Appellant's Arguments 8.1 In support of the appeal, the appellant filed heads of argument on 15th May, 2023. The two grounds were argued separately and as they appear in the Memorandum of appeal. 8.2 As a starting point, our attention was drawn to Order 40 rule 6 of the High Court Rules on the discretion of the court to award costs in any manner the court deems just; and that in the absence of any express direction by the court or judge, costs shall abide the event of the suit or proceeding. Additionally Order 62 rule 3(2) of the Rules of the Supreme Court, White Book, 1999 Edition was adverted to where it states that:- "No party to any proceedings shall be entitled to recover any of the costs of those proceedings from any J8 other party to those proceedings except under an order of the Court." 8.3 Based on the cited authorities, it was submitted that the court had jurisdiction to order costs in its discretion. Counsel cited the case of Simon Lwando and Others v. ZCCM Investment Holdings Plc and Others1 where the court held inter alia that costs are normally awarded to a successful party, except where such a party is guilty of some misconduct, which makes it improper for him to be granted costs. 8. 4 It was argued that the above case showed that where a party has incurred costs in defe nding an action commenced by another party, such a party is entitled to an award of costs, except where such a party is guilty of some misconduct. 8.5 It was counsel's submission that in this matter, the court, in its Ruling of 14th July, 2022 issued an "unless order" requiring the respondent to file and serve unto the appellant a writ of summons, statement of claim and other supporting documents on or before 28th July, 2022, failure to which the matter would stand dismissed for want of prosecution. That this was not done, and thus the court order was disobeyed. That this J9 effectively rµeant that the matter stood dismissed; as was clearly stated in the court's Ruling. 8.6 It was counsel's assertion that nonetheless, the appellant incurred costs and expenses and ought to have been indemnified of its expenses by the respondent, who failed to prosecute its action as ordered by the court below. 8.7 Further, that in any case, the appellant was not guilty of any misconduct to warrant the learned court not to grant it an order for costs, for a matter that the appellant defended at the instance of the respondent. It was argued that the failure to award costs by the court below, despite the appellant incurring costs in defending itself against the respondent's claim, was an error in law and fact and most definitely, goes against the established jurisprudence as clearly shown in the Supreme Court case of Simon Lwando1 • 8.8 Based on the above, we were implored to reverse the lower court's decision not to award costs to the appellant, especially that the appellant had incurred costs in defending the claim, and was not guilty of any misconduct. JlO 8.9 In ground two, the contention is that the learned Judge exercised her discretion improperly and irregularly when she denied the appellant costs without compelling reasons or opposition to a cost order. That this was contrary to the record and established jurisprudence. 8.10 It was reiterated, as was done in ground one, that it is trite law that the award of costs is discretionary, as per Order 40 rule 6 of the High Court Rules. That however, such discretion must be exercised based on established principles of law. That the case of Collett v. Van Zyl Brothers Limited2 is instructive, where the court cited the case of Gilbert v. Hudlestone3 and , stated that: - "where an appeal from an order as to costs which are left to the discretion of the judge is brought ... the Court of Appeal will have regard to the discretion of the judge, and will not over rule his order unless there has been a disregard of the principles or misapprehension of facts." 8.11 Our attention was called again to the Simon Lwando1 case for the same principle. 8. 12 Counsel posed the question as to whether this Court has any recourse if it should be established that the discretion was not Jll exercised judiciously but capriciously, without any compelling reasons and against established jurisprudence under the circumstances. To answer the Question, counsel sought seccour in the case of Ward v. James4 where Lord Denning stated that:- "This brings me to the Question: In what circumstances will the court of Appeal interfere with the discretion of the Judge? At one time it was said that it would only interfere if he had been wrong in the principle, but since Evans v. Batlam, that idea has been exploded. The true proposition was stated by Lord Wright in Charles Osenton and Co. v. Johnston. This Court can and will interfere if it is satisfied that the judge was wrong. Thus it will interfere if it can see that the judge has given no weight (or no sufficient weight) to those considerations which ought to have weighed with him ... conversely, it will interfere if it can see that he has been influenced by other considerations which ought not to have weighed with him, or not weighed so much with him ... " 8.13 It was submitted that the above authority instructs that a Court of Appeal has the authority to interfere with the discretion of a judge where such judge has gone wrong in principle and the Court of Appeal is satisfied that the Judge was wrong. 8. 14 Reverting to the matter before court, counsel referred to the unless order issued by the J udge; where the respondent was directed to amend process, and if not done, the matter would J12 stand dismissed. That having not obeyed the unless order, the matter stood dismissed. That despite the fact that the respondent failed to prosecute its case, the appellant still incurred costs in defending the claim by the respondent. That the appellant was thus entitled to be indemnified the costs it incurred in defending against the claim. 8.15 That the case of Simon Lwando1 provided support, where the Supreme court stated inter alia that:- " ... in the current case, there is no doubt that the respondent must have incurred costs in defending this action, and as such they were entitled to costs ... " 8.16 We were urged to reverse the decision of the court below, with the contention that the court did not exercise its discretion judiciously, but capriciously and against established jurisprudence. 8.17 The appellant prayed that we uphold the appeal. 9.0 Respondent's Heads of Argument 9 .1 The respondent filed arguments in opposition on 11th August, 2023. They argued the two grounds separately. J13 9.2 The respondent did not dispute that costs in any suit are awarded at the discretion of the court as provided in Order 40 rule 6 of the High Court Act. 9.3 Substantively, it was submitted that the court was on firm ground in Ruling as it did. It was submitted that contrary to their argument, the appellants were not a successful party as the matter was not dismissed on a point of law as contended. 9. 4 That the court below found that there existed a tenancy relationship between the parties, though not one protected under the Landlord and Tenants (Business Premises) Act. That the court was of the view that due to the nature of the relationship between the directors of the two entities, being husband and wife, it could exercise its powers under Order XXX of the High Court Rules, as read with Order 29 rule 8(1) RSC, and decide that the matter be deemed to have been commenced by way of writ of summons and statement of claim. That it thus dismissed the appellant's application. 9.5 It was submitted further that, the appellants could not be said to be a successful party in the court below, as they appealed the J14 High Court decision to the Supreme Court citing two grounds of appeal. 9. 6 Counsel adverted to the Ruling being appealed against, where the court stated that:- "In the case at hand, in my Ruling of 14th July, 2023, as already stated, I did not award either party costs. Order XL rule 6 of the High Court Rules, relied upon by the respondent, would have assisted the respondent in its application for costs in this matter, if it had succeeded in my earlier Ruling, which it did not". (underline supplied) 9.7 That having established that the appellant was not a successful party, the general principles that costs follow the event are not applicable. That therefore the court exercised its discretion judiciously in ordering as it did. 9.8 We were urged to dismiss this ground. 9.9 In arguing ground two, counsel reiterated the submissions in ground one, contending that the court was on firm ground in holding as it did, and that it used its discretion judiciously, taking into account all the circumstances of the case and on established principles. In support, the case of General Nursing Council of Zambia v. Ing'utu Milambo Mbangweta5 was cited where the Supreme Court held that:- J15 "In awarding costs, the court has to consider the particular circumstances of the case." 9 .10 As regards the principle that costs are in the discretion of the court, the respondent also relied on the case of Simon Lwando1 . It was submitted that the court judiciously exercised its discretion and addressed its mind to all the circumstances of the case. That therefore we should uphold her decision and not upset it. The case of Collett v. Van Zyl Brothers Limited2 was relied upon. 9. 11 We were urged to dismiss this ground of appeal, on the basis that there is no evidence on the record to show that there has been a disregard of the principles of law or a misapprehension of the law. That the court did not award either party costs as can be seen from the Ruling in the record of appeal. 9.12 We were urged to dismiss the entire appeal for lack of merit. 10. 0 Hearing 10. 1 The matter was heard on 7th May, 2024. Only counsel for the appellant was before court. The respondent had filed heads of argument. In the circumstances, the court proceeded to hear the appeal. The appellant's counsel placed reliance on the J16 record of appeal and the heads of argument filed on 15th May, 2023. 11. 0 Analysis and Decision 11.1 We have considered the appeal, the evidence in the lower court, heads of argument and list of authorities filed by learned counsel for both parties. We shall tackle the two grounds of appeal together, as in our view, they are intertwined. 11.2 After due consideration of the record, we are of the view that the starting point should be to resolve the issue of jurisdiction by the learned Judge in the court below. Our view is premised on the fact that the Judge found, that the matter was wrongly commenced. Having found thus, the question then, is whether she had jurisdiction to make all the Orders that she did. The outcome will lead, in our view, to the resolution of the issue of costs. 11.3 However, before we delve into the issue of jurisdiction, we will restate the law as regards the jurisdiction of the court to award costs and the principles which guides a court in awarding costs. 11.4 The argument by the appellant, as we understand it, is that the learned Judge should have awarded them costs when the J17 matter stood dismissed, when the respondent did not act on the court's unless order, since the appellant had incurred costs in defending the respondent's claims and thus ought to be indemnified. That the refusal to grant them the order for costs shows that the learned Judge did not exercise her jurisdiction on settled principles for the award of costs. 11.5 The respondent on the other hand is of the view that the learned Judge was on firm ground in refusing to award the appellant costs, as in their view, the appellant was not a successful party in its application which culminated in the issuance of the unless order by the learned Judge. 11.6 It is patent, and both parties herein have acknowledged the fact that a court hearing a matter is vested with wide discretion as regards the award of costs. They have, and we agree with them, acknowledged further, that the discretion vested in the court has to be exercised in accordance with well settled principles. One of the cardinal principles is that a party who has substantially succeeded in bringing or defending his claim is generally entitled to costs. J18 11.7 Dr. Patrick Matibini, SC in his works, Zambia Civil Procedure, Commentary and Cases, Vol 2, page 1705, referred to this as the "Costs follow the event" principle. 11.8 The Supreme Court elucidated on this principle in the case of Kuta Chambers v. Conc ilia Sibulo6 where the Court stated that:- " ... all the costs necessary to enable the adverse party to conduct or defend the litigation ... will generally be awarded to the successful party. The object of these costs is to indemnify the successful party against the expenses to which he has been put by the unsuccessful party. We must also stress that the effect of this is to give the successful litigant a full indemnity for all costs reasonably incurred by him in relation to the ac t. " 10n ... 11. 9 Having set out the above, we revert to the question of jurisdiction as earlier stated. 11.10 It is not in dispute that when the respondent instituted process in this matter in the court below, the appellant herein filed summons to raise matters in limine on a point of law, as appear at pages 57 to 59 of the record of appeal. In raising the points of law, the appellant, at page 58, record of appeal, sought inter alia the relief that:- J19 (v) If any answer to any of these questions (raised in the Preliminary issue) is in the negative, that the applicant's action be dismissed with costs." 11.11 In her Ruling, appearing at pages 141 to 166, the court found that the action was wrongly commenced. That justice would be served if the matter was deemed to have been commenced by Writ of Summons and statement of claim. She thus exercised her jurisdiction and ordered that the matter be recommenced using that mode. 11.12 It is that exercise of jurisdiction that has given us cause for pause. We have asked ourselves the question if the matter was wrongly commenced as found by the learned Judge, did she have jurisdiction to make the Orders that she did? At paragraph 5.22, page R28, appearing at page 165 of the record of appeal, the learned Judge ordered as follows:- " Accordingly, I hereby order and direct that the matter be treated as though commenced by way of Writ of Summons. I further direct that the Applicant files herein amended Writ of Summons; Statement of Claim; List of Witnesses and List and Description of documents to be relied on at trial and to serve the same on the Respondent, on J20 or before 28th July, 2022. I also direct that the Respondent enters appearance and files its Defence; List of Witnesses; and List and description of documents to be relied on at trial and to serve the same on the Applicant, on or before 11th August, 2022. Proof of service must be filed herein. Unless the parties comply as directed herein, this matter shall stand dismissed for want of prosecution." 11.13 At paragraph 6.2, appearing at R29, page 166, record of appeal, the learned Judge stated that:- "Having found the matter to have been wrongly commenced, I exercise my inherent jurisdiction in the interest of justice under Order III rule 2 of the High Court rules not to dismiss the action but to grant leave to the applicant to amend the process from Originating Notice of Motion to that of writ of Summons" (underline ours for emphasis only) 11.14 Can we, in view of the above paragraphs determine that the appellant was not a successful party? The answer in our view is in the negative. The appellant had moved the Court to determine whether the respondent is a tenant or indeed had a tenancy within the meaning and contemplation of the Landlord and Tenant (Business Premises) Act. As shown above, at pages 141 to 166 of the record of appeal, she found that the matter was wrongly commenced. J21 However instead of dismissing the matter, the learned Judge purported to cure the defect in the manner of commencement, by ordering an amendment to the originating process. This in our view, was wrong. 11.15 The case of Chikuta v. Chipata Rural Council8 is still good law, where it was guided that:- "where any matter is brought to the High Court by means of an originating summons when it should have been commenced by writ, the court has no jurisdiction to make any declarations." 11.16 In the case of New Plast Industries v. The Commissioner of Lands9 further guidance was provided when the Supreme Court held that:- "( I) It is not entirely correct that the mode of commencement of any action largely depends on the reliefs sought. The correct position is that the mode of commencement of any action is generally provided by the relevant statute." 11.17 The learned Judge, having determined that the matter had been wrongly commenced, could not then order an amendment to the originating process. It was not a process that could be cured. Statute had provided how a matter involving the relationship of a landlord and tenant J22 of business premises ought to be commenced. The only recourse was to dismiss the matter as pleaded by the appellant in its application to raise issues in limine. This meant and does infact mean that the appellant had succeeded and was thus entitled to costs. 11.18 Our position is that at that point, the learned Judge had ceased to have jurisdiction to deal with the matter, as guided in the Chikut a case. 11.19 Regarding the question of jurisdiction, the Supreme Court provided clear guidance in the case of Antonio Ventriglia and Another v. Finsbury Investments Limited10 where it held at page R26, while referring to its decision in the case of JCN Holdings Limited v. Development Bank11 , that:- "It is clear from the Chikuta and New Plast Industries cases that if a court has no jurisdiction to hear and determine a matter, it cannot make any lawful orders or grant any remedies sought by a party to that matter." 11.20 Further, on the same page, and quoting from the case of "Owners of the Motor Vessel 'Lillian S' v. Caltex Oil (Kenya) Limited12 the Supreme Court stated:- , J23 " ... jurisdiction is everything, without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings. . . . A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction ... where a court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing." 11.21 The learned Judge, having determined that the matter was wrongly commenced, had no powers or jurisdiction to make an order to mend the process. The learned Judge had no jurisdiction to make any order, directing the amendment of the process, and by the same token, to issue an unless order. The only power she had was to dismiss the matter for wrong mode of commencement as found earlier. 11.22 Therefore all the Orders made by the learned Judge were all for nought, as she, at that point had no jurisdiction to make any order or grant any relief. 11.23 If she had dismissed the matter, it would have meant that the appellant's preliminary issue in limine had succeeded. That being the case, it stood to reason that the appellant was a successful party in the court below and was J24 therefore entitled to be indemnified by an Order of Costs for all the expenses incurred up to that point. 12.0 The appeal therefore succeeds. We set aside the Order of the Judge refusing to grant costs. We order costs for the appellant both in this Court and the Court below. 13. 0 Conclusion 13.1 For avoidance of doubt, the appeal succeeds. We order costs for the appellant in both this Court and in the court below to be taxed in default. = ~ ... -~~ ................. . M. M. Kondolo, SC Court of Appeal Judge ······~ ··············· B. M. Majula A. M. Banda-Bobo Court of Appeal Judge Court of Appeal Judge J25