Eastern Gateway Limited v Oryx Oil Zambia Limited (2024/HPC/0858) (28 March 2025) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2024/H PC/0858 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) IN THE MATTER OF: ORDER XXX RULE 11 (B) AND (C) OF THE HIGH COURT RULES, CHAPTER 27 OF THE LAWS OF ZAMBIA IN THE MATTER OF: THE CONTRACT BETWEEN EASTERN GATEWAY LIMITED AND ORYX OIL ZAMBIA LIMITED BETWEEN: EASTERN GATEWAY LIMITED APPLICANT AND ORYX OIL ZAMBIA LIMITED RESPONDENT Before Hon. Lady Justice Irene Zeko Mbewe Appearances For the Applicant: Mr. C. Chungu of Messrs Nsapato and Company Advocates For the Respondent: Mr. A. Saka/a and Mr. D. Mondoka of Messrs Simeza Sangwa and Associates RULING Cases referred to: 1. Chikuta v Chipata Rural Council [1974] ZR 241 (SC) Rl I Page 2. New Plast Industries v The Commissioner of lands SCZ Judgment No 8 of 2001 3. B.P Zambia PLC v Zambia Competition Commission, Total Aviation and Export Limited and Total Zambia Limited - S. C. Z. Judgment No. 21 of 4. Ulubembe Investments v F. Kapoka Navnit Patel and Lethabo Primary School- CAZ Appeal No. 171/2019 5. Roadmix Limited, Kearney and Company Limited vs Furncraft Enterprises Limited-SCZ Judgment No. 41 of 2014 Legislation referred to: 1. Landlord and Tenant (Business Premises) Act, Cap of the laws of Zambia 2. High Court Rules, Chapter 27 of the Laws of Zambia Introduction By this application, the Defendant seeks to strike out the originating summons on grounds that: 1. The Court has no jurisdiction to hear and determine this matter as the action is incompetent and not properly before Court; 2. The originating process discloses no reasonable cause of action against the Respondent; and 3. Costs of and occasioned by this application shall be costs for the Respondent. R2 I Page Affidavit in support The application is supported by an affidavit sworn by Brian Kasungu the BTC Manager in the Respondent Company who discloses that the action by the Applicant has taken the Respondent by surprise. Further, the lease agreement between the Applicant and Respondent is still subsisting and will only determine on 31st March, 2025, therefore, the lease between the Applicant and Respondent has not been terminated to give rise to a dispute. It is deposed that clause 3.2 of the said lease empowers the Respondent to give at least two months' notice of its intention to renew the lease. Further, the Respondent is undertaking an inventory exercise to determine which property is theirs' and can only respond effectively once an exercise is completed and thus the decision to issue Court process herein is premature. Affidavit in opposition The application is opposed through an affidavit deposed to by Alice Banda the Head of Operations of the Applicant herein. She attested that the issues raised by the Applicant relating to the Respondent's right of first refusal and entitlement to improvements on the leased property is not covered by the provisions referred to by the Respondent. Further, the Applicant has raised an issue relating to an interpretation of the Applicant's contractual right to terminate and right to the property on the leased property that are properly before this Court. R3 I Page According to the deponent, the Respondent admits it is preparing an inventory of goods demonstrating a valid cause of action as the Applicant requires an interpretation of who owns the unexhausted improvements on the leased property and this Court has the power to interpret provisions of a contract and any statute applicable to parties. Further, that the Applicant is seeking interpretation of the right to termination and whether the same will be possible even without a contractual provision and whether the tenant has right of first refusal. The Applicant seeks declaration of the ownership of the improvements on the land as the contract is silent on the same and as advised by its Advocate on record, Mr. Chanda Chungu of Messrs Nsapato & Co. Advocates verily believes the same to be true that this Court is permitted to interpret the Applicant's rights in this regard. It is attested that as the lease between the Applicant and Respondent is bound to expire, it is crucial the Court gives an interpretation of the questions posed given the Respondent's failure and unwillingness to respond to the Applicant's correspondence as demonstrated in the originating process. Further, the Applicant has not been able to proceed with engaging new tenants or entering subsequent tenancy agreement due to the Respondent's refusal to accept the termination and access improvements belong to the Applicant hence the need for interpretation by this Court. According to the deponent, the matter is not pre-mature but ripe for determination as the Applicant begun the process on 9th July, 2024 but the Respondent has not been forthcoming as demonstrated in the affidavit in R4 I Page support of the originating summons, and it is not too early to have the matter determined. That a matter seeking an interpretation of the right in a statute and contract, such the case herein, is always a matter that discloses a reasonable cause of action as the rules permit a party to seek clarification and interpretation of rights. It is deposed there is a sufficient set of facts that give rise to recourse and remedy in favour of the Applicant that are ripe for interpretation and determination by this Court. Therefore, the Respondent's application to strike out the originating summons and dismiss the action before this Court is vexatious and should be dismissed with costs. Skeleton arguments The parties filed skeleton arguments which have informed the determination of this matter and shall make reference to the same where necessary. Hearing At the hearing, the parties referred to their respective affidavits, skeleton arguments and list of authorities. The Respondent argues that by commencing this action by way of originating summons, this Court has been robbed of the requisite jurisdiction to hear and determine this matter as the action is incompetent and not properly before Court. The basis for this contention is that the lease agreement is yet to expire and therefore the action is prematurely before Court. I RS Page Counsel for the Respondent argues a party has no option to choose the manner to commence an action, neither should the remedies sought dictate how an action of this nature is brought to Court. Analysis and decision I have considered the application, the respective affidavits, skeleton arguments and oral submissions advanced by counsel at the hearing. The preamble to the Landlord and Tenant {Business Premises) Act, Cap 193 of the Laws of Zambia (the hereinafter referred to as the Act), sets out the purpose of this Act which is to protect tenants occupying property for business. It states as follows: '~n Act to provide Security of tenure for tenants occupying property for business, professional and certain other purposes; to enable such tenants to obtain new tenancies in certain cases; and to provide for matters connected therewith and incidental thereto." From the facts presented by both parties, there is no contest that the Applicant and Respondent entered into a lease agreement in respect of business premises. The lease is for a period of ten years and due to terminate on 31st March, 2025. The kernel of the argument advanced by Counsel for the Respondent is that the action has been wrongly commenced as the law provides that matters arising from a lease relating to business premises is to be commenced by way of originating notice of motion as provided under the Act. I R6 Page The issue of the mode of commencement of an action has been settled in a plethora of cases. In Chikuta v Chipata Rural Council (1>, the Supreme Court held as follows: "It is clear... that there is no case where there is a choice of commencing an action by writ of summons or by an originating summons." The above case is still good law. In the often-cited case of New Plast Industries v The Commissioner of Lands and Attorney General (2>, referenced by Counsel for the Respondent, the Supreme Court recognised the following: "Where any matter is brought to the High Court by means of an originating summons when it should have been commenced by a writ, the Court has no jurisdiction to make any declaration." ... '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. " The Supreme Court re-affirmed this position in the case of B.P Zambia PLC v Zambia Competition Commission, Total Aviation and Export Limited and Total Zambia Limited (3 when it held that: > 'The mode of commencement of any action depends generally on the mode provided by the relevant statute ... Since the dispute leading to this appeal arose from the decision of the Commission which was R7 I Page exercising this power under the Competition and Fair Trading Act, the applicable statute was the Act and not Order 53 of the Rules of the Supreme Court because the statute prescribes the mode of commencement. ' What is clear from the authorities is that the mode of commencement of any action depends generally on the mode provided by the relevant statute. The issue before me is to examine whether the Applicant's action falls under the province of the Act. The Applicant seeks the interpretation of whether it is entitled to terminate the lease agreement notwithstanding the Respondent's right of first refusal; whether the Applicant is entitled to exhausted improvements on the land. Counsel for the Respondent contends the subject matter falls under the Act and should have therefore been commenced by way of originating notice of motion. Counsel for the Respondent argued the lease agreement is clear in that 2 months before termination of the lease, either party can give notice. In his oral submissions, Counsel for the Respondent argues that the Applicant declined the notice to terminate saying it had the right of first refusal, as such there is no dispute. Section 5 of the Act provides for termination of a tenancy by a landlord and section 6 is on the tenant's request for a new tenancy. It is important to note that a lease agreement for business premises is like any other contractual agreement and is governed by the ordinary rules of contract law. In my view, from a perusal of the originating summons, it shows the Applicant is inviting the Court to interpret the parties' contractual obligations under the lease. R8 I Page Essentially, the Applicant wants the Court to determine whether the lease agreement cannot be terminated in view of the Respondent's right of first refusal to renew. The Court's resolution of the parties' contractual rights as regards termination and renewal of the lease has the effect of determining whether or not the agreement will be terminated. In this vein, I am guided by Rule 3 of the Act, which states that: "An application made to the court under the Act shall be commenced by an originating notice of motion. Evidence in support thereof may be on affidavit or, where an affidavit is not required by these Rules, viva voce." The import of Rule 3 of the Act is that the mode of commencement of matters under the Act is by way of originating notice of motion. In the case of Ulubembe Investments v F. Kapoka Navnit Patel and Lethabo Primary School (4l, the Court of Appeal stated: "We appreciate that the Landlord and Tenant (Business Premises) Act' specifies the applications or actions which should be commenced by an originating notice of motion, but it is also a settled principle of law that it is not every action between a landlord and tenant of business premises which must be commenced in that mode. In the case of Apollo Refrigeration Services Co. Ltd vs Farmers House Ltd, a landlord of business premises commenced an action to recover possession by originating notice of motion thinking that every action between a landlord and tenant of business premises had to be commenced in that way by virtue of the Landlord and Tenant (Business Premises) Act and R9 I Page the Rules thereunder. The Court held that an Originating notice of motion was not the proper process for a landlord claim for possession since all the applications which can be made under the Act are in fact specified in the various sections. A landlord's action for possession is not so specified and the action should, therefore, have been commenced as provided for by Order 6 of the High Court Rules. " It is clear from the above case, that the mode of commencement is dependent on a statute. Counsel for the Applicant argues to the contrary that the originating summons is the correct mode of commencement as the Applicant seeks an interpretation of its contractual rights. In this vein, Counsel for the Applicant relied on the case of Roadmix Limited, Kearney and Company Limited v Furncraft Enterprises Limited, where the Supreme Court held that: "The request for a new tenancy is specifically provided for under Sections 4 and 6 of the Landlord and Tenant (Business Premises) Act as well as under Rule 5 of the Landlord and Tenant (Business Premises) Rules. The claim for a new tenancy cannot, therefore, be combined with claims for declarations and damages which are distinct and require to be brought by Writ of Summons and depend on pleadings and viva voce evidence being called on both sides ... With the exception of the claim for a new tenancy, this matter was not properly before court and the learned trial Judge had no jurisdiction to determine the matter on its merit." RlO I Page The import of the above authority is that a claim for a new tenancy cannot be combined with other claims that fall outside the ambit of the Act. I opine that the above case is distinguishable from the present facts as the reliefs being sought by the Applicant fall within the ambit of sections 5 and 6 of the Act. Premised on the foregoing, and as rightly argued by Counsel for the Respondent, the proper and correct mode of commencement of this action is by an originating notice of motion as it emanates from the provisions of the Act (sections 5 and 6 of the Act). Having found the above, I agree with Counsel for the Respondent that this Court is robbed of jurisdiction as the mode of commencement goes to jurisdiction. Consequently, I need not determine the issue on whether there is a cause of action, or whether the Applicant seeks an advisory opinion nor the alternative argument that the default mode of commencement being by way of writ of summons. The originating summons is therefore struck out and the Applicant's action is dismissed for want of jurisdiction. I award costs to the Respondent, to be taxed in default of agreement. Leave to appeal granted. Delivered under my hand this 28th day_Qf March, 2025 IRENE ZEKO BEWE HIGH COURT JUDGE Rll I Page