Nalikwanda Agro Processing Limited v Khembule Commodities Limited and Anor (2023/HPC/0714) (16 July 2024) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2023/HPC/0714 AT THE COMMERCIAL REGISTRr HkiH<Ylli~~~~- HOLDEN AT LUSAKA HIGHcourrroF7 1\~4AfA JUfJ1C..1A.- (C ivil Jurisdiction) COMME~CIAL DIVISION BETWEEN 1 6 JUL 2024 ~ REGISTRY NALIKWANDA AGRO PROCESS! G,JjIMITEID6 PLAINTIFF .o;s-ox S0067. LUSAKA AND KHEMBULE COMMODITIES LIMITED 1 DEFENDANT ST VICER KHEMBULE 2ND DEFENDANT • Before Honourable Lady Justice Chilombo Bridget Maka For the Plaintiff: Mr. M. Chungu with Mr. E. Chinyama - Messrs. Mwamba & Milan Advocates. For the Defendants: Mr. M. Nyirenda - Messrs. S.L.M. Legal Practitioners. RULING Legislation Referred to: 1. The High Court Act, Chapter 27 of the Laws of Zambia. • 2. The Court of Appeal Act No. 7 of 2016. 3. The Rules of the Supreme Court of England, 1999 Edition (White Book) Cases Referred to: 1. Ndola City Council vs. Charles Mwansa, SCZ Judgment No. 15 of 1994 2. Michael Sata vs. Chanda Chimba III and 3 Others (HP 1282 of 2010) 3. Stanley Mwambazi vs. Morrester Farms Limited (Z) (1977) Z.R, 108 4. Chifuti Maxwell vs. Chafingwa Rodney Mwansa and Another Appeal No. 09 of 2016. 5. Zambia Revenue Authority vs. Post Newspapers SCZ Judgment No. 18 of 6. Carmine and Watson Nkandu Bowa (sued as Administrator of the Estate of Kutu Bowa) vs. Fred Mubiana and Zesco Limited (2012) 3 Z.R. 1650 7. LC and DK Limited (In Receivership) and Another vs. Lovemore Chikuni Chinyama CAZ Appeal 270 of 2020 8. Sonny Paul Mulenga and Others vs. Investrust Merchant Bank SCZ Judgment No. 15 of 1999 1. Introduction. • 1.1. This is the Defendants application for stay of execution of Judgment filed into Court on 16th May, 2024. 1.2. The Application is supported by an affidavit and skeleton arguments of even date. 1.3. The Plaintiff contested the application and filed an affidavit in opposition together with skeleton arguments on 6th June, 2024. 2. Background. • 2.1. The Plaintiff sued the Defendants for payment of the sum of K890,800.00 being a refund of money paid to the Defendants, damages for breach of contract and special damages as pleaded. These claims are stated in the amended writ of summons dated the 31st October, 2023. 2.2. The originating process was served on the Defendants on 1st November, 2023 but no appearance was entered. Subsequent to the foregoing, the Plaintiff filed summons for R2 .. judgment on admission on 22nd November, 2023. When the application came up for hearing on 15th January, 2024, the Defendants were not before Court. I proceeded to hear the application upon proof that the Defendants were duly served with the application. I subsequently entered Judgment on admission in favour of the Plaintiff. 2.3. On 9th February, the Defendants filed an application to set aside the Judgment on admission dated the 16th January, 2024. The application was heard interpartes on 14th March, • 2024. The application was dismissed in the Ruling rendered on 8th May, 2024. 2.4. The Defendant has lodged an appeal against the said Ruling and seeks an Order for stay of execution of Judgment dated 16th January, 2024. 3. The Defendant's Case. 3 .1. The Affidavit evidence allude to the fact that an appeal has been lodged in the Court of Appeal against the Ruling of 8th • May, 2024. That the appeal has reasonable prospects of success as the Defendants were not given an opportunity to be heard on the merit. In addition that there was no formal admission made to the Plaintiff's claim as the Judgment was entered without trial being conducted. Lastly that this Court has jurisdiction to stay execution of Judgment. 3.2. The arguments in support of the application cited Order XLVII Rule of the High Court Rules, pursuant to which the R3 application is made. It was pointed out that an appeal does not operate as a stay, and must be applied for. The cases of Ndola City Council vs. Charles Mwansa!1 and Michael Sata l vs. Chanda Chimba 111'21 were cited, in which the Court discussed the principles governing a stay of execution. 3.3. It was reiterated that the Defendant was never heard on the application for Judgment on admission. The case of Stanley Mwambazi vs. Morrester Farms Limited'31 was cited to posit that a Default Judgment can be set aside if a triable issue is • disclosed. That since the Defendants were not heard on the merits, and have shown a defence on the merit, the appeal has reasonable prospects of success. 3.4. It was further emphasized that a Judgment on admission is not the same as a Judgment after a trial. That consequently, the case of Chifuti Maxwell vs. Chafingwa Rodney Mwansa and Another!4 l, as well as Order 35 of the Rules of the Supreme Court was not applicable to a Judgment on admission. • 3.5. It was contended that the Defendants failure to file a defence within the requisite time frame and to appear at the hearing of the application for Judgment on admission are procedural defects which do not go to the root of the matter. Article 118(6) of the Constitution was cited to argue that denying a party its right to be heard and have its matter determined on the merit has been frowned upon. R4 3.6. It was contended that the grounds advanced are satisfactory and the appeal has prospects of success. Based on the foregoing, the Court was implored to exercise its discretion in favour of the Defendant and grant them a stay of execution pending hearing and determination of the appeal. 4. The Plaintifrs Case. 4.1. The gist of the evidence was that the Defendants have not shown that their appeal has reasonable prospects of success. • This is on account that the grounds advanced by the Defendants to reverse the Ruling are unsatisfactory. Further that the Defendants have not shown that if they are not granted a stay of execution, they will suffer irreparable injury. That consequently, the Defendants have not satisfied any of the requirements for obtaining a stay of execution pending appeal. 4.2. The gist of the skeleton arguments was that a stay was a discretionary remedy derived from Order 36 Rule 10 of the • High Court Rules . 4.3. The cases of Zambia Revenue Authority vs. Post Newspapers Limited(5l and Carmine and Watson Nkandu Bowa (sued as Administrator of the Estate of Kutu Bowa) vs. Fred Mubiana and Zesco Limited(6l were cited to argue that the Court's discretion to grant a stay of execution must be exercised judiciously and based on well settled principles. These principles include prospects of the appeal succeeding RS and suffering irreparable damage if the stay is not granted and the appeal succeeds. 4.4. It was further submitted that the Ruling of 16th May, 2024 was not stayable as it did not award any remedies to either party. The case of Zambia Revenue Authority vs. Post Newspapers Limitedl5 and Carmine and Watson Nkandu Bowa (sued as Administrator of the Estate of Kutu Bowa) vs. Fred Mubiana and Zesco Limitedl6 was cited to support the submission. • 4.5. It was reiterated that the Defendants have not demonstrated that they will suffer irreparable harm if the stay is not granted. Further that no good and convincing reasons have been advanced whilst the grounds of appeal have no prospects of success. It was pointed out that Order 35 rule 5 of the High Court Rules does not make reference to a Judgment entered in the absence of a party. That this Court therefore has power to set aside Judgment entered in the absence of a party. • 4.6. The Plaintiff concluded by urging the Court to dismiss the application as it lacked merit. 5. Oral Submissions. 5.1. At the hearing of the application on 24th June, 2024, legal representatives for both parties were before Court. R6 5.2. Counsel for the Defendants, Mr. M. Nyirenda submitted that he was relying on the affidavit in support and skeleton arguments filed on 16th May, 2024. 5.3. In addition, Counsel pointed out that the application was premised on Order 4 7 of the Rules of the High Court which gives this Court discretionary powers to stay execution of any Judgment or Order by Court. 5.4. Counsel reiterated that the Defendants have lodged an appeal in the Court of Appeal. • 5. 5. It was argued that the appeal has reasonable prospects of success as the Judgment in favour of the Plaintiff is not on merits. 5.6. Counsel urged the Court to grant the application. 5.7. Counsel for the Plaintiff equally relied on the filed affidavit and skeleton arguments in opposition. Counsel reiterated that the Defendants have not met the threshold for the grant of a stay of execution. 5.8. It was further argued that the Defendants had sat on their • rights when they failed to attend the hearing of the application and as such this Court can not be blamed for entering Judgment on admission. 5. 9. Counsel insisted that the grounds of appeal have no prospects of success. This is because the Defendants had sufficient time to oppose the application. Lastly, that there has been no attempt to demonstrate the irreparable injury that the Defendants would suffer if the stay was not granted. R7 5.10.That any monies which the Court of Appeal can order to be paid to the Defendant, the Plaintiff will easily pay back. 5.11. It was submitted that the application should be dismissed because any further delay would be an injustice to the Plaintiff. 5.12. In reply, Mr. Nyirenda reiterated that the failure by the Defendant to file defence is what led to Judgment on admission to be entered in favour of the Plaintiff. 5.13. Counsel submitted that it is in the interest of justice for • matters to be heard on their merit. It was pointed out that execution in this case can be enforced including execution on the Defendants assets. 5.14.It was submitted that it was on account of the foregoing that the application should be granted. 6. Consideration and Determination. 6.1. I have considered the Defendant's application and the arguments advanced by both parties. • 6.2. It is trite that Order 4 7 Rule 5 of the High Court Rules provides that an appeal does not halt execution of Judgment or Ruling being appealed. The party seeking to stay execution of Judgment pending determination of the appeal, must make an application for consideration by the Court. 6. 3. Order 36 Rule 10 of the High Court Rules on the other hand grants discretionary powers to this Court to stay execution of Judgment on sufficient grounds. R8 6.4. The principles that guide the Court when considering an application for stay of execution of Judgment pending appeal have been restated in a plethora of cases, some of which have been cited by the parties. In the case of LC and DK Limited (In Receivership) and Another vs. Lovemore Chikuni Chinyama(7 the Court of Appeal summarized the conditions l that must be met to grant a stay of execution as follows:- "The grant of a stay of execution is a discretionary and equitable • remedy. It may be granted on the following principles; where special circumstances of the case so require or where if the stay is not granted the appeal will be rendered nugatory or academic." 6.5. Further in the case of Sonny Paul Mulenga and Others vs. Investrust Merchant Bank(8l, the Supreme Court stated that:- "In terms of our rules of Court, an appeal does not automatically operate as a stay of execution and it is utterly pointless to ask for a stay solely because an appeal has been entered. More is required • to be advanced to persuade the Court below or this Court that it is desirable, necessary and just to stay a Judgment pending appeal. In exercising its discretion, whether to grant a stay or not, the Court is entitled to preview the prospects of success of the proposed appeal". 6.6. Additionally, Order 59 Rule 13(2) of the Rules of the Supreme Court, emphasizes the principle that the successful party R9 should not be deprived of the fruits of the Judgment in his favour and as such a stay should only be granted where there are good reasons. 6. 7. In this case, it is common cause that the Defendants have lodged an appeal against the ruling of 8th May, 2024 in which the Defendant's quest to set aside the Judgment on admission was dismissed. 6.8. It should be noted that though the appeal is against the ruling of 8th May, 2024, the Defendants are seeking to stay • execution of Judgment on admission dated 16th January, 2024 which ordered the payment of a monetary sum and damages for breach of cont ract. 6.9. Therefore, in so far as the Defendants are seeking to stay execution of the aforestated Judgment on admission and not the ruling of the 8th May, 2024, the Plaintiff's submissions that there is nothing to stay is misguided. This entails that the cited cases of Post Newspaper vs. ZRAl9 l is not applicable to this case. • 6. 10. The Defendants contention in seeking this application is mostly that the appeal has reasonable prospects of success as the Defendants were not given an opportunity to be heard. 6. 11. I have considered the grounds of appeal advanced whilst mindful that I should not delve into the merits of the appeal. My considered view is that the grounds of appeal has some prospects of success. RlO 6.12. I note however that the Defendants have not demonstrated that they will suffer loss which could not be compensated. Nevertheless, this is a proper case in which to stay execution of the Judgment so as not to render the appeal a nugatory, further the enforcement process that Plaintiff could embark on have irreversible consequences. 7. Conclusion. 7.1. The grant of a stay of execution of Judgment is a discretionary remedy. For the Court to grant the order, sufficient grounds must exist. Prospects of success of an appeal is a key consideration and where such exists, the order for stay of execution must be granted to avoid rendering the appeal nugatory. 7.2. The Defendants in this case have shown that the appeal has prospects of success and the enforcement mechanism could lead to irreparable damages. 7.3. I am therefore satisfied that the application has merit. • 7.4. Consequently, the Defendant's application to stay execution of Judgment pending appeal is granted. 7. 5. Costs will be in the cause. Delivered at Lusaka this 16th day of July, 2024 . ................. ............... Chilombo Bridget Maka HIGH COURT JUDGE R11