Urban Brands Asset Management Limited and Anor v Impala Hotels and Suites Ndola Limited (2024/HPC/0063) (7 March 2024) – ZambiaLII

• __ __ ___ IN THE HIGH COURT FOR ZAMB , , ... , . 4/HPC/0063 AT THE COMMERCIAL REGIST HOLDEN AT LUSAKA 'I ~ (Civil Jurisdiction) ~ ' 'MHERCW. l(EGIS BETWEEN: URBAN BRANDS ASSET MANAGE . ED67 t.\l FIRST PLAINTIFF JGX LIMlTED SECOND PLAINTIF ANO IMPALA HOTELS AND SUITES NDOLA LIMITED FIRST DEFENDANT AFRICAN LIFE FINANCIAL SERVICES (ZAMBIA) LIMITED SECOND DEFENDANT SANDVlK MINING PENSION TRUST SCHEME LIMITED THIRJ> DEFENDANT CEC PENSION TRUST SCHEME FOURTH DEFENDANT INDENI PENSION TRUST SCHEME FIFTH DEFENDANT LAFARGE CEMENT PLC PENSION TRUST SCHEME SIXTH DEFENDANT KONKOLA COPPER MINES PLC PENSION TRUST SCHEME SEVENTH DEFENDANT Before the Honourable Mr Justice K. Chenda on 7"' March 2024 For the Plaintiffs. : Mr M. Mda.lameta ~nd Ms. H. Chileshe of MAY & Company For the 1• Oefendant : ti/ A For the '2·"" (<, 7"' Defendan.l.S : Mr P. Ch<1mba and Mr D.M. Sil&vwe ofMulcnga Mundashi Legel Prac::titionet'3 RULING On Application to Set Aside Process and Dismiss Action I have LISTENED ATTENTIVELY to the arguments and CLOSELY STUDIED the documents on record. After a CAREFUL CONSIDERATION, my decision delivered ex-tempore is as follows. 1 INTRODUCTION 1.1 This is a second round of litigation involving the parties, the earlier cause being a petition listed as 2023/HPC/0813 (the "petition case"). In the petition case, the Plaintiffs herein were the Petitioners and the Defendants, the Respondents. 1.2 Following a challenge on mode of commencement (at the instance of the Second to Seventh Defendants herein), the petition case was dismissed in limine by ruling of the Hon. Mr Justice Mwanabo dated 18th January 2024. 1.3 The Plaintiffs thereafter recommenced by writ of summons and statement of claim seeking redress for alleged oppression at the hands of the Third to Seventh Defendants as their fellow shareholders in the First Defendant company. 1.4 The Second to Seventh Defendants reacted with an application to set aside the writ of summons and statement of claim. They have also sought dismissal of the action altogether. 1.5 I heard the application today and this is my ruling. 2 THE PRELIMINARY ISSUE 2.1 According to the summons of 1st March 2024, the Second to Seventh Defendants question: 'whether these proceedings are properly before this Honourable Court having been commenced by way of Writ of Summons as opposed to Originating Summons in light of the decision of this Honow·able Court delivered in Mukulu Dairies Limited v Lactalis Zambia Limited and Another 2021 / HPC/ 0403 delivered on 27th February 2024.' R2 2.2 Quite clearly, the entire issue pivots on a determination of what the correct mode of commencement is for a statutory application for redress of alleged oppression under company law as it stands in Zambia. 2.3 The Plaintiffs moved this Court by writ of summons and statement of claim and have argued that they did so in pursuit of the ruling in the petition case. 2.4 If indeed the position of the Plaintiffs is correct then, due to the risk of conflicting decisions between this Court and that in the petition case, I would be precluded by the 'coordinate jurisdiction rule' from considering the merits of the Defendants' application. 2.5 My authority is s.4 of the High Court Act, Cap. 87 and the Supreme Court's decision in ZANACO & Agro Fuel Investments Ltd. vEverlighterNdhlovu -Appeal No. 189/2014 where Malila, CJ (then as JS) guided at p.J13-14 that Judges of coordinate jurisdiction should not overrule each other's decisions or judgments. 2.6 It follows that the first and foremost sub-issue to be determined is whether Mwanabo, J (in dismissing the petition case) actually pronounced that commencement by writ and statement of claim was the way to go. R3 (b) an act or omission, or proposed act or omission, by or on behalf of the company has been done or is threatened, which was or is likely to be oppressive; or (c) a resolution of the members, or any class of them, has been passed or is proposed which was or is likely to be oppressive." 2.13 The section instead invites a statutory application, which is not uncommon under Zambian company law. Examples include appointment of a receiver by the Court under s. 4(1) of the Corporate Insolvency Act, No. 9 of 2017, reproduced as: • 4. ( 1) Where a charge over property ofa company has become enforceable, the Court may. on the application of the chargee, appoint a receiver of. .the property." (Emphasis added) 2.14 A question then begs an answer as to what is the correct mode of commencement for a statutory application? In that regard it is noteworthy that s.134 of the Companies A<:t is infact devoid of a prescription on mode of commencement and so too __i s the rest of ·" the Companies Act. The same can be said for its subsidiary legislation as at date of commencement of this action. 2 .15 I have also checked the High Court Rules and not found any prescription on mode of commencement of such a statutory application to the High Court. R6 2.16 I say High Court because section 134(1) of the Companies Act states that the requisite application may be made to 'The Court' while section 3 defines 'Court' as the 'High Court'. 2.17 To fill this lacuna in our domestic rules of Court, I invoke section 10 of the High Court Act which imports the Rules of the Supreme Court of England, 1965 (the "RSC") in the White Book, 1999 Edition. 2.18 Order 5 Rule 3 of the RSC in particular is a gap filler in these circumstances and it reads: "5/3 3.Proceedings which must be begun by originating summons Proceedings bu which an application is to be made to the High Court or a fudge thereof under any Act must be begun bu originating summons except where bu these rules or bu or under any Act the qpplication in question is expressly required or authorised to be made bu some other means. This rule does not apply to an application made in pending proceedings. (Emphasis added) 2.19 A question may be posed as to why I have not considered this case within the ambit of Order 44 of the High Court Rules. My simple answer is that following amendment of the High Court Act by Act No. 7 of 20 J 1, the gap filler provisions under Order 44 of the High Court Rules are inconsistent with those under s.10 of the High Court Act. ., R'7 2.20 Accordingly, by operation of s.20(4) of the Interpretation and General Provisions Act, Cap. 2, I have considered Order 44 as inapplicable to the circumstances before Court. 2.21 Therefore, in my view, unless and until there are Court proceedings rules promulgated under the Companies Act (or the High Court Rules updated), a statutoiy application pursuant to s.134( l l must be brought by originating summons (as per Order 5 Rule 3, RSC) to redress the alleged oppression. 2.22 By implication and on the strength of authorities like New Plast of Industries Limited v Commissioner Lands and Another (2001) Z.R. 51, the wrong mode of commencement adopted by the Plaintiffs renders this case a still born as this Court has no authority to grant the substantive reliefs sought. 2.23 The above reasoning is the same as that in Mukulu Dairies Ltd. v Lactalis Z Ltd. & Anr. • 2021 / HPC / 0403 which is more or less a straight jacket fit into the circumstances that animate this application. 3 CONCLUSION AND ORDERS 3.1 In light of the foregoing, the Defendants' preliminaiy issue succeeds, the originating process is hereby set aside and the action is dismissed, for irregularity and want of jurisdiction. RS 3.2 However, for avoidance of doubt, the dismissal in limine is no bar to a fresh action to redress the Plaintiffs' unresolved grievances, albeit under the correct mode of commencement. 3.3 Consequent to the dismissal, the injunction granted by ruling of 4,h March 2024 stands discharged. 3.4 Turning to the issue of costs of litigation. They are a matter of discretion for the Cou1·t in terms of Order 40 Rule 6 of the High Court Rules. 3.5 As for guidance in the exercise of that discretion, I heed the Supreme Court's judgment in Afrope Zambia Limited v Anthony Cha.te & Ors - Appeal No. 160/2013 at p.Jl6, where Wood, JS aptly stated: "It is a settled principle of law that a successful party will not normally be deprived of his costs unless there ts something in the nature of the claim or in the conduct of the party which makes it improper tor him to be grant.ed costs.• (Emphasis added) 3.6 In the case at hand, there is nothing in the nature of the case (or conduct of the relevant Defendants) in the proceedings which would disentitle them to costs of successfully repelling the Plaintiffs' action. , 3. 7 Accordingly, I deem it fair and just to order, as I hereby do, that the Plaintiffs shall bear the Second to Seventh Defendants' costs of this action, to be taxed in default of agreement. R9 3.8 Lastly, in order to prevent any unjust hindrance to ventilation of the unresolved grievances of the Plaintiffs, I order that recovery of the costs awarded shall be in parallel (not a condition precedent) to pursuit of the case if there be a third commencement thereof. ··-··J:!.J.. ............ 1:!!::._ at""""' Da«d <hi• •.•.•.• day of 2024 K.CHENDA Judge of the High Court RlO