Dipesh J. Shah v Patents and Company Registration Agency and Ors (2022/HPC/0293) [2024] ZMHC 219 (13 March 2024)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN DIPESH J. SHAH AND 2022/HPC/0293 PLAINTIFF PATENTS AND COMPANIES REGISTRATION AGENCY !ST DEFENDANT NARENDRA VALAND SUNANDA VALAND 2ND DEFENDANT 3RD DEFENDANT • VORTEX REFRIGERATION COMPANY LIMITED 4TH DEFENDANT VORTEX ELECTRICAL COMPANY LIMITED S TH DEFENDANT JEAH MADAIKA J & M ADVOCATES 1 ST THIRD PARTY 2ND THIRD PARTY Before: The Honourable Mr. Justice L. Mwanabo on 13t h March, 2024 For the Plaintiff: N / A For the 1st Defendant: Mr. D. Chiwambwa Legal Counsel For the 2 nd to 5 th Defendant: N / A • For the 3 rd Parties: Ms. D. Nachimba of Messrs. J & M Advocales RULING Cases referred to: 1. Chick Masters Limited and another V Investrust Bank Plc Appeal No. 74 of 2014 Rl 2. Finsbury Investments v Antonio Ventriglia and Others SCZ Judgment No. 42 of 2016 3 . Emmanuel Nkatia Chirumba v Union Bank Zambia Limited (In Liquidation) SCZ No. 7 of 2003 4. Savenda Management Services v Stanbic Bank Zambia Limited Appeal No. 002/2015 Legislature referred to: 1. Rules of the Supreme Court of England (White Book) 1999 edition 2. Corporate Insolvency Act No. 9 of 2017 • • 1.0 APPLICATIONS 1.1 The 3 rd Parties herein filed summons for an order to dismiss action for abuse of Court process pursuant to Order 18 Rule 19(16) of the Rules of the Supreme Court of England1 . The application was supported by affidavit, list of authorities and skeleton arguments. 1.2 The Plaintiff responded by filing a Notice of Motion to raise preliminary issues on point of law and or construction pursuant to Order 14A Rule 1 of the Rules of the Supreme Court ofEngland1 . The Notice was supported by affidavit, list of authorities and skeleton a rguments. 2 .0 THIRD PARTIES' APPLICATION 2.1 The basis of the Third Parties' application is that the Plaintiff, acting through his agent Mr. Jayesh Shah, obtained an arbitral award in the sum of USDl,042,840.00 and US$51,000 .00 per month plus interest against 2 nd to 5 th Defendants which was registered under cause No. 2022 / ARB / HP / 0021 before the High Court for Zambia. 2.2 Counsel for the Third Parties argued that the Plaintiff's action herein is an abuse of Court process since the Plaintiff had already obtained an a rbitral award securing even the amount claimed herein R2 against the 2 nd to 5 th Defendants. My attention was drawn to various authorities on abuse of Court process and that there must be finality to litigation: among them the case of Chick Masters Limited and another V Investrust Bank Plc1 . I was also reminded of the duty of the Court to timely weed out frivolous and hopeless actions without going through full trial as long as the parties are given a chance to be heard. The case in point referred to was Finsbury Investments v Antonio Ventriglia and Others2 • 2 .3 I was urged to dismiss the PlaintifPs action in its entirety for abuse of Court process in light of the Third Parties' arguments. 3.0 PLAINTIFF'S NOTICE OF MOTION • 4.1 The Plaintiffs Notice of Motion raised three questions for determination as follows: 4.1.1 Whether the application as filed by the 1st third party and 2nd third party is properly or competently before this Honourable Court? 4 .1. 2 Whether the Court has jurisdiction to hear this matter in view that the 4 th and 5 th Defendants are mis-described on the process? 4.1.3 Whether the application by the 1st third party and 2nd third party to dismiss action can be made without leave of Court. 4.2 The summary of the Plaintiff's Notice of Motion is that the 4th and 5th Defendants were placed under provisional liquidation and an ex parte Court Order to that effect was produced s igned on 27th October, 2023 by the Ndola High Court. According to the Plaintiff, the 4 th and 5 th Defendants were therefore misdescribed in the application and that there was need to obtain leave before filing the application thereby rendering the application in issue irregular and contrary to the law. R3 • 4.3 In fortifying th e application with legal arguments, Counsel for the Plaintiff quoted Order 14A Rule 1 and highlighted th e requirements to be met for employing the Order. 4.4 My attention was further drawn to Section 66 of the Corporate Insolvency2 which provides that: "Where a winding-up order is made or a provisional liquidator is appointed, an action or proceeding shall not be proceeded with, o r commenced against, a company except by leave of the Court and subject to such terms and conditions as the Court may impose" 4.5 Counsel for the Plain tiff further referred to the case of Emmanuel Nkatia Chirumba v Union Bank Zambia Limited (In Liquidation)3 • which is lo the effect that leave of Court is required in order to proceed or continue with an action against a Company placed under liquidation. My attention was also drawn to the case of Savenda Management Services v Stanbic Bank Zambia Limited4 where th e Supreme Court held that: ''the applicant has no locus standi in the manner it has been described". 4 .6 It was contended that the application by the third parties 1s not properly and competently before m e and th at I should dismiss it with costs . • 4.0 THIRD PARTIES' AND DEFENDANTS' RESPONSE TO THE PLAINTIFF'S PI 4.1 The gist of the Third Pa rties' response to the application is that since t heir application was not a commencem ent of action, there is n o requirement lo obtain cons ent from th e liquidator. 4.2 Mr. Chiwambwa on behalf of the 1s t Defendant was of the view that the application did not involve the 1st Defendant as such he had nothing to say. R4 4.3 There was no appearance or op posilion filed on behalf of the other Defendants. 5 ANALYSIS AND DECISION 5.1 I will deal with the Plaintiff's Notice of Motion first whose outcome will determine whether I should proceed to determine the 3 rd Parties' application. 5.2 I have considered the affidavit evidence and arguments including the cases cited by the Plaintiff. The Plaintiff's application under Order 14A of the Rules of the Supreme Court was ignited by the Third Parties' application to dismiss action for abuse of Court process. Order 14A/2/3 of the Rules of the Supreme Court of England sets out the requirements for employing the procedure under it as follows: 5.2.1 The Defendant must have given notice of intention to defend 5.2 .2 The question of law or construction is suitable for determination without a full trial of the action 5.2 .3 Such determination will be final as to the entire cause or matter or any claim or issue therein 5.2.4 The parties had an opportunity of being heard on the question of law or have consented to an order or judgment being made on such determination 5.3 Although the Plaintiff highlighted the said requirements and indicated that I have jurisdiction to determine the preliminary issue raised, I am of the view that the Plaintiff did n ot meet the requirements as determination of the questions raised would not determination the entire cause or matter with finality. I am further of the view that the said Order 14A is not meant to be raised as a preliminary issue against an application raised by the opponent whose determination will only be limited to dismissing that application and not the entire action or cause. Counsel or a party RS • • seeking to invoke Order 14A must fully interrogate the nature of the application to be made against the requirement outlined under Order 14A/ 2 / 3. There is a growing tendency by Counsel or litigants to quickly employ Order 14A in the least deserving occasions and where they should have simply applied to set aside or file an affidavit in opposition because the issues for determination or questions being raised do meet the requirements of Order 14A/ 2/3. Therefore, I find the employment of Order 14A by the Plaintiff herein to be a misapprehension of the instances when it can be employed. 5.4 Moreover, even assuming that I have jurisdiction to determine the Preliminary Issue, I find the issues raised to be another misconception of the law. The leave required under Section 66 of the Corporate Insolvency Act2 applies to a party that seeks to commence and action or proceed against a company under liquidation. The application by the Third Parties is not against the 4 th and 5 th Defendants. Therefore, I am of the view that the duty to obtain leave to proceed against the 4 th and 5th Defendants is in fact on the Plaintiff and not the Third Parties. 5 .5 In light of the two issues I have indicated above, I find no merit in the Plaintiff's Preliminary Issue and is dismissed accordingly with costs against the Plaintiff to the Third Parties. 5.6 I now turn to the application by the Third Parties. As earlier indicated the gist of the Third Parties' application to dismiss matter for abuse of Court process is that the Plaintiff already obtained an award against the 2 n d to the 5 th Defendants in the sum of USDl,042,840.00 and USD51,000.00 per month and that the award in issue covers the amount claimed herein. 5.7 It is not dispute that the Plaintiff obtained the award in issue which was even already registered before the High Court for Zambia. According to the award, the award amounts are secured by a number of properties as listed in the award and declared executable. R6 • • 5.8 The main reliefs sought by the Plaintiff herein are: 5.8.1 An order for payment by the Defendant to the Plaintiffs of the sum of USD243,768.00 as at 22nd February, 2022 and continuing being in respect of the outstanding debt sum advanced by the Plaintiff to the Debtors, lost by the Plaintiffs as a result of the Defendant's negligent and/ or careless acts and conduct complained of by the Plaintiffs herein. 5.8.2 Damages for negligence suffered by the Plaintiffs 5.9 The basis for the action by the Plaintiff is premised on the alleged negligence and loss and damages emanating from the discharge of the debenture over the 5th Defendant's assets securing the sum of USD350,000.00. As much as the Plaintiff already obtained an award, there is no evidence that the Plaintiff actually already recovered the amount in issue. The mere fact that he obtained an award cannot justify discharge of the debenture before the debt is settled and, in any case, it must be at the instance of the Judgment Creditor. Obtaining an award is one thing and obtaining full payment or settlement of the amount awarded is another thing. After an award there is an issue of enforcement which enforcement would still require that the security for satisfaction of the Judgment must still be in place. Had the Third parties demonstrated that the award amount had been paid in full at the time of commencement of this c.ction or at least at the time of making this application my view and decision would have probably taken different complexion. Moreover, it would be premature for me to expect the Plaintiff at this stage to produce evidence of the loss as this is what should be proved at trial. 5.10 I have considered the holding of the Supreme Court in the case of Chick Masters Limited and Another v Investrust Bank PLC - Appeal No. 74 of 2014 that an abuse of the Court process can arise where the claim is vexatious, scurrilous or obviously ill-founded such as where proceedings are started to pursue a claim which is R7 • • already been dealt with by way of full trial and final settlement between the parties. I am not convinced that the evidence produced by the Third Parties do satisfy the prescription given above for abuse of Court process. 5.11 The issues for determination in the action herein are different from the issues determined in the arbitral proceedings. In fact, the issues before me do not fall within the dispute contemplated by the arbitral clause. Having considered the evidence before me, it has not been proved to me that the action herein is vexatious, scurrilous or ill founded. When a question was posed to Counsel for the Third Parties on how the arbitral proceedings were to the action herein, she said that only her principal could explain that as she was not in a position to do so. The contents of the affidavit in support of the Third Parties' application do not reveal any evidence of how the two actions are related other than just stating that the Plaintiff already obtained an award covering the amount claimed herein when the causes of action in the two matters are different and in the absence of showing that discharge of the debenture did not affect enforcement and recovery of the amounts in issue. I find no basis to grant the application in issue and I find no merit in the application: it is hereby dismissed with costs to the P intiff against the Third Parties. 5.12 Leave to appeal is • • Lastone Mw HIGH COURT JU R8