Charles Zulu v Mubanga Zacharia Lukashi (Appeal No. 130 of 2022) (28 February 2024) – ZambiaLII

IN THE COURT OF APPEAL OF ZAMBIA AppeaINo.130of2022 HOLDEN AT NDOLA (Civil Jurisdiction) BETWEEN: CHARLES ZULU APPELLANT AND MUBANGA ZACHARIA LUKASHI RESPONDENT CORAM: KONDOLO, MAJULA AND PATEL, JJA nd th On 22 and 28 February 2024 For the Appellant: No Appearance Messrs Legal Aid Board For the Respondent: No Appearance Messrs. OMM Banda & Company , / JUDGMENT / Patel, JA, delivered the Judgment of the Court. IJ Page 1 Cases Referred to: 1. Fearnought Systems Limited v Fearnought Systems (Z) Ltd and Anr- SCZ Appeal No.033 of 2015. 2. Lewanika & Others v Chiluba (1998) ZR 79. 3. Lisulo v Lisulo (1998) ZR 75. 4. Kon kola Copper Mines Pie v NFC Africa Mining Pie- SCZ Appeal No. 118/2006. 5. Audrey Nyambe v Total Zambia Limited - SCZ Appeal No. 29/2011. ; 6. Knox Magugu Mbazima v Tobacco Association of Zambia -SCZ/08/14/2021 7. Bellamano v Ligure Lombarda Limited (1976) ZR, 267 (S.C.) I 8. Kansanashi Mine Pie v Jospeh Maini Mudumina & Others -SCZ Appeal No. 149/2010 9. Pouwels Construction Zambia Limited and Pouwels Hotels and Resorts Limited ,, vs lnyatsi Construction Limited- SCZ Appeal No. 23/2016. / 10.Ody's Oil Company Limited vs The Attorney General and Constantinos James Papoutsis - SCZ Judgment No. 4 of 2012. 11.Heyman v Darwins Limited (1942) 1 All E.R 337 (HL). 12.Krige and Another v Christian Council of Zambia (1975) Z.R. 152. 13.Makanya Tobacco Company Limited v J & B Estates Limited -SCZ Appeal No. 42/2012. Legislation referred to: 1. The Arbitration Act, Chapter 40 Act No. 33 of 1940. Page IJ 2 2. The Arbitration Act No. 19 of 2000. 3. The High Court Act, Chapter 27 of the Laws of Zambia. 4. The Lands and Deeds Registry Act, Chapter 185 of the Laws of Zambia. 5. Practice Direction No. 1 of 2002 1.0 INTRODUCTION 1.1 This is an appeal against the Ruling of Hon. Mrs. M.M.Bah-Matandala J, th given in the High Court on th February 2022 on an action filed on 25 February 2021. Hereinafter referred to as the Ruling. 2.0 BACKGROUND 2.1 The Plaintiff, (now Respondent) commenced these proceedings against the Defendant (now Appellant), by way of Writ of Summons and Statement of th Claim filed on 25 February 2021 claiming the following reliefs: i. Payment of the sum of K 294,975.00 ii. An order that the Tenant be evicted from the business premises at MOYCE Business Building situated as Plot 84-lJ Lumumba Road, Emmasdale Lusaka iii. Damages for breach of contract iv. Interest on the money due at the current commercial lending rate Page IJ 3 v. Any other relief the court may deem fit vi. Costs. 2.2 In a nutshell, this dispute emanated from a landlord-tenant relationship, th wherein the Plaintiff landlord, entered into a lease agreement dated 8 January 2016 with the Defendant tenant, for the lease of the property described above at a monthly rental of K19,665.00 (Kwacha nineteen thousand six hundred and sixty-five) payable two months in advance. The Plaintiff pleaded that the defendant was in rent arrears for a period of 15 / months from November 2019 to the date of the action. 2.3 Consequent to the non-payment of the rent, the Plaintiff pleaded that he had suffered loss and damage and made the afore stated claims against the Defendant. 2.4 The Defendant settled his defence, the gist of which being that the lease st agreement had expire'd, and a new one was signed on 1 June 2018 with an agreed rent of K15,000.00 per month. He also raised a counterclaim, for developments to the property, in the sum of K350,000.00 2.5 The Defendant, thereafter, moved the Court by Summons for an order to stay proceedings pursuant to section 6 of the Arbitration Act, Chapter 40 of the Laws of Zambia1, on the basis of mutual agreement to refer any dispute to arbitration, as per the lease agreement. The order was initially granted. IJ Page 4 2.6 In a turn of events, the assailed Ruling, now the subject of appeal, was reviewed under the provisions of Order 39 of the High Court Rules 3 • The lower Court, relying on the principles that guide courts on application for review, as outlined by the cases of Fearnought Systems Limited v Fearnought Systems {Z) Ltd and Another 1 , Lewanika & Others v Chiluba 2 page 79 and the case of Lisulo v Lisulo 3 was of the considered view that the application for review was successful. 2.7 She then re-considered the Defendant's application, this time, armed with the opposing process, and determined in her Ruling, that the matter was not amenable to reference to arbitration and dismissed the application. 2.8 The Defendant, now the Appellant in this Court, being dissatisfied with the Ruling of ih February 2022 has appealed and fronted one ground of appeal, having abandoned the second ground. 3.0 DECISION OF THE COURT BELOW 3.1 The trial Judge having considered the Defendant's application was of the th view that the tenancy having been determined on 28 February 2021, the arbitration clause had become inoperative or incapable of being performed and the only thing remaining was for the landlord to recover the already accumulated rental arrears. The lower court relied on the decisions in the cases of Konkola Copper Mines Pie v NFC Africa Mining Plc4, Audrey Nyambe v Total Zambia Ltd 5 in arriving at her decision. IJ Page 5 3.2 The reasoning and analysis of the lower court is on record and the Ruling has been noted from pages 6 to 17 of the Record of Appeal. 4.0 THE APPEAL 4.1 Being dissatisfied with the entire Ruling of the lower Court, the Appellant th filed a Notice of Appeal and Memorandum of Appeal on 16 February 2022, advancing two (2) grounds of appeal as follows: 1. The Court below erred in law and fact when it held that the arbitration clause had become inoperative or incapable of being performed because the lease terminated when the tenanry agreement came to an end, contrary to settled law that an arbitration clause is separate and independent and survives the agreement embodying it. ,. 2. The Court below erred in law and fact when it held that the lease had ,, terminated contrafy to settled law on continuation of contract on the same terms where parties continue performance after expiry of a contract. 5.0 APPELLANT'S ARGUMENTS IN SUPPORT OF THE APPEAL 5.1 We have duly considered and appreciated the Appellant's Heads of rd Argument filed on 23 June 2022, which will not be recast, save for emphasis as necessary. IJ Page 6 6.0 RESPONDENT'S HEAD OF ARGUMENTS 6.1 We have equally considered and appreciated the Respondent's Heads of th Arguments filed on 26 August 2022 which will equally not be recast, save for emphasis as necessary. 7.0 THE HEARING 7.1 At the hearing of the appeal, Counsel for the Appellant filed its Notice of th non-appearance dated 16 February 2024. Ordinarily that is sufficient, and requires no further mention. However, w,.e feel compelled to make a few remarks with respect to clause 2 of the said Notice, which reads as follows: "Take Notice that the Appellant Charles Zulu submits herewith written arguments for the consideration of the Court of Appeal as set out in the Appendix hereto." 7.2 We are of the considered view that Counsel may not be versed with procedure in this Court. Firstly, Counsel cannot purport to file a notice of non-appearance and also file separate written arguments over and above its heads of argument filed with the Record of Appeal and set them out in an annexure. This is procedure alien to the Court. Needless to say, there were no written arguments or any Appendix, to the said Notice of non appearance. Page IJ 7 8.0 DECISION OF THIS COURT 8.1 We have already noted that the Appellant having raised two grounds of appeal, has abandoned the second one, leaving us to determine the remaining ground of appeal. 8.2 We must hasten to point out that the Appellant appeared to have moved the lower Court on a repealed Statute as is noted from the Summons appearing at page 36 of the Record of Appeal, entitled: ,. 0Summons For An Order to Stay Proceedings Pursuant To Section 6 of the Arbitration Act Chapter 401 of the Laws of Zambian. / 8.3 Although Counsel correctly referred to section 10 of the Arbitration Act in , its heads of argument filed in support of the application, the wrong caption in the Summons under which the Court was moved was a fundamental error. It is most regrettable that Counsel can refer to a piece of legislation, which was repealed and replaced by The Arbitration Act No. 19 of 2000 2 , an Act which was enacted almost 24 years ago. / 8.4 It is also trite that reliance on the wrong provision of the law, let alone a repealed law, is enough ground for the lower Court to have dismissed the application before it. By way of emphasis, and to re-state the law, we can do no better than to quote from a Ruling delivered by the Supreme Court in the case of Knox Magugu Mbazima v Tobacco Association of Zambia6 in , which case Malila, CJ stated as follows: IJ Page 8 "We perused the applicant's application and noted, as did the respondent, that the applicant relied on wrong law in moving the court. In providing the legal basis for applications made in the Supreme Court, High Court rules are obviously alien to this court. We must hasten to state that it is always necessary for parties to not only cite the law that they seek to rely upon when moving the court but to also, most importantly, cite the correct law. In the case of Bellamano v Ligure Lombardo Limited7 we guided that when , moving a court: It is always necessary ..... for the summons or notice of application to contain a reference to the order and rule number or other authority under which relief is sought. / Our decision in Kansanashi Mi(Je Pie v Jospeh Maini Mudumina & Others8 is to the same effect, Practice Direction No. 1 of 20025 requires all applications brought to court to indicate the act and Section or Order and Rule under which applications are made. This position applies now as it did then". (emphasis added) / 8.5 As noted, not only did the lower Court proceed to consider the ill-fated application, but it did also, by what can only be described, as pure oversight, on its part, make reference to the Appellant's application made pursuant to Section 6 of the Arbitration Act Chapter 401 of the Laws of Zambia, without acknowledging the fundamental flaw in the application. (See Ruling at page 8 of the Record of Appeal). The lower Court, IJ Page 9 unwittingly, proceeded to grant the Order of Stay of proceedings, although we note that a copy of the Order is not on the Record of Appeal. 8.6 Aggrieved by the Order of Stay of Proceedings and referral to arbitration, the Respondent, the Plaintiff, in the lower Court, took out Summons for Review of that Ruling on the ground that its opposing affidavit and skeleton arguments had not been placed on the Court's record and had not been considered by the Court. 8.7 We do not deem it necessary to narrate the reasons or indeed the analysis on which the lower Court did review its said Order. It is also not clear to us, whether it was an Order or a Ruling that is being referred to, as the terms r are used interchangeably. The lower Court at paragraph 1.4 of its Ruling (R3} states as follows: "In the skeleton arguments in support of Summons for an Order for review of a Ruling to refer matter to arbitration, this Court was urged to set aside the Ruling to refer the matter to arbitration and hear the application de nova ..... "(the emphasis is ours}. 8.8 As noted, the Appellant has not exhibited, in its Record of Appeal, the Order of Stay and reference to Arbitration, or indeed the initial Ruling, the subject of the application, nor copies of court proceedings in the lower Court. Page IJ 10 8.9 The lower Court, again without noting the fatal flaw highlighted above, in its reasoning allowed the Respondent's application and reviewed its earlier Ruling/Order and finally determined that the arbitration clause referred to in the lease agreement, had become inoperative and dismissed the application to refer the matter to arbitration. It is that determination by the lower Court that is the subject of appeal before us, on the single ground as stated in paragraph 4 above. 8.10 Without expressing further misgivings about the manner in which the matter progressed in the lower court, we will restrict ourselves, to the only issue as we see it, namely: did the arbitration clause become inoperative or incapable of being performed after the end of the tenancy agreement? In other words, the Appellant has argued that an arbitration clause is separate and independent and survives the agreement embodying it. 8.11 A copy of the Lease Agreement, purportedly prepared under the name and style of S.K. Attorneys of unknown address, was exhibited as 'CZl' to the affidavit in support of the Summons for an order to stay proceedings. The st lease period was from 1 June 2018 for a period of 1 year and 6 months. It was noted that there was no further lease agreement executed and the Parties continued their relationship under the said lease, till in or about 28 February 2021, when the tenant gave notice of intention to vacate the property. 8.12 It was argued by the Respondent that the arbitration clause was effectively ousted, as it had become inoperative and incapable of being performed, Page IJ 11 while the Appellant, placed great premium on section 10 of the Arbitration Act and called upon the Court to stay proceedings and refer the dispute to arbitration, being the forum chosen by the Parties for the settlement of their dispute. 8.13 We are of the settled mind, and there is no ambiguity to the philosophy underlying the Arbitration Act. It is underpinned by its preamble as being "to redefine the supervisory role of the courts in the arbitral process". The Act is clearly intended to restrict the court's involvement in arbitration, to the extent only of providing a complementary, and not competing role to the arbitral process. / 8.14 The Supreme Court has cautioned superior courts in the manner and approach they adopt, so as not to exercise judicial activism at the expense of party autonomy. Superior Courts are suitably guided by the decision in the case of Pouwels Construction Zambia Limited and Pouwels Hotels and / Resorts Limited vs lnyatsi Construction Limited 9 wherein the Supreme , Court held that Courts would only interfere with the parties choice of forum if " ... the arbitration agreement is null and void, inoperative or incapable of being performed." 8.15 We also note that the Supreme Court in the case of Ody's Oil Company Limited vs The Attorney General and Constantinos James Papoutsis guided Superior Courts faced with an application made under section 10 of the Arbitration Act2, in that the Court has the discretion to determine IJ Page 12 whether a matter which has arbitration as the mode of settlement of disputes should be referred to arbitration. It requires the Court to be satisfied that there is firstly an agreement, that the arbitration agreement is valid, and or that it is not null and void, inoperative or incapable of being performed. 8.16 Similar guidance was echoed in the case of Konkola Copper Mines Pie v NFC Africa Mining Plc4 where the Supreme Court observed that: '7he Court has a discretion not to stay proceedings and refer the parties to arbitration where the Plaintiff demonstrates that the Arbitration Agreement is null and void, inoperative or incapable of being performed". 8.17 It was further the guidance of the Apex Court in the case of Audrey / Nyambe v Total Zambia Limited 5 that: "In determining whether a matter is amenable to arbitration or not, / it is imperative that the wording used in the arbitration clause itself are closely studied." 8.18 It is trite that arbitral proceedings may only be founded on a valid arbitration agreement. It is also trite, and there is no debate on this issue, that the arbitration clause survives the termination of the substantive agreement by virtue of the doctrine of separability. The doctrine of separability which treats an arbitration clause as separate and severable Page IJ 13 from the main agreement, was established in English law, by the House of Lords in Heyman v Darwins Limited . The reasoning behind this is obvious that the arbitration agreement is separate and distinct from the substantive contract and must therefore be considered independently. There remains however the possibility of a challenge to jurisdiction on the basis that there is no valid agreement to arbitrate. 8.19 What is not in contest, is the period of the lease agreement, which was st effective from 1 June 2018 for a period of 1 year 6 months. It is therefore ~ th obvious that it expired on 30 November 2019. Thereafter what subsisted can best be described as a tenancy at_w ill by possession of the premises. We are guided on this finding by the decision of the Supreme Court in the case of Krige and another v Christian Council of Zambia . However, and from the record before us, it is not clear how periodically the rent was paid and accepted. In any event, the property having been vacated, this is not an issue that requires determination. What remains is the claim for outstanding rent. 8.20 Another issue that comes to our attention is the effect of non-registration of the lease agreement, the subject of the dispute. Again, although this issue appears not to have been raised in the lower court, we are of the considered view that non-registration in itself of a document that is required to be registered in accordance with section 4 (1) of the Lands and Deeds Registry Act 4 has its own legal consequences. Decisions such as the ones in the cases of Krige and Another v Christian Council of Zambia and Page IJ 14 • Makanya Tobacco Company Limited v J & B Estates Limited13 have equally settled the position that such document shall be null and void. 8.21 Irrespective of our observations above, the lease agreement having expired, and no dispute having arisen during the subsistence of the tenancy agreement, it is trite that the arbitration clause has become inoperative. 8.22 For the afore stated reasons, we uphold the Ruling of the lower court, for the eventual determination that the application to stay proceedings, and refer matter to arbitration, had no merit and was consequently dismissed. 8.23 Accordingly, we dismiss the appeal and refer the matter back to the lower Court for determination. Costs in this Courvshall be for the Respondent. M.M. KONDOLO S.C. COURT OF APPEAL JUDGE / A.N. PATEL S.C. COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE Page IJ 15