Finsbury Investments Limited v Antonio Ventriglia and Anor (APPEAL NO. 117/2018) [2019] ZMCA 440 (29 March 2019)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) APPEAL NO. 117 /2018 BETWEEN: FINSBURY INVESTMENTS L LLANT AND ANTONIO VENTRIGLIA MANUELA VENTRIGLIA CORAM: SIAVWAPA, JA 1 ST RESPONDENT 2ND RESPONDENT On 27th February and 29 th March 2019 FOR THE APPELLANTS: J. P. SANGWA, J MR. CHIMANKATA OF MESSRS SIMEZA SANGWA ASSOCIATES SC WITH MR. MR CHAKOLEKA OF MESSRS MULENGA MUNDASHI, KASONDE LEGAL PRACTITIONERS FOR THE RESPONDENTS: MR. V. B . MALAMBO, SC WITH MR. C. M SIANONDO OF MESSRS MALAMBO & CO MR. S. SIKOTA, SC WITH MR. K. KHANDA OF MESSRS CENTRAL CHAMBERS MR. S . MAMBWE AND MR. A SIWILA OF MESSRS MAMBWE, SIWILA AND LISIMBA ADVOCATES. RULING Cases referred to: Zambia Telecommunications Company Limited (ZAMTEL LTD) and Aaron Mweenge Mulwanda and Paul Ng'andwe, Appeal No. 63/2009 Statutes 1. Order 10 Rule 23(4) of the Court of Appeal Rules 2. Halsbury's Laws of England Volume 26, 4 th Edition in paragraph 40 The Court delivered its Judgment on 31 st January 2019 by which it directed the Appellant to pay the sum of K580, 000,000.00 to the Respondents for the 580,000,000.00 shares the Respondents transferred to it by the Shareholders' Agreement of 26th February 2007. By summons dated 2 1st February 20 19, the Appellant asked the presiding Judge to settle an order embodying the Judgment of the Court pursuant to Order 10 Rule 23(4) of the Court of Appeal Rules. The summons was accompanied by an affidavit deposed to by John Peter Sangwa SC Counsel for the Appellant. In the affidavit, Mr. Sangwa deposes that following the said Judgment he prepared a draft order embodying the Judgment of the Court which he forwarded. to the Respondents' advocates which the R2 advocates for the Respondents refused to sign. He therefore, concluded that an agreement as to the form of the order was not possible between the parties. This is therefore, a ruling on the application to settle an order embodying the Judgment of the Court. In terms of Order 10 Rule 23(1) it is a mandatory requirement for a Judgment of the Court to be embodied in an order. The procedure is set out in the subsequent sub-rules but under sub-rule 4, pursuant to which the application is made, a single Judge of the Court of Appeal is empowered to settle the draft order where the parties fail to agree. In this case, the main point of disagreement between the parties is on the amount payable to the Respondents for the 580,000,000.00 shares they transferred to the Appellant in 2006 and 2007. Whereas the Appellant understands the amount ordered by the Court to represent the value of the shares after the re-denomination or rebasing of the kwacha, the Respondents understand the amount to represent the value of the shares before the rebasing of the kwacha. The Respondents have taken the face value of the figure stated in the Judgment of the Court as the amount payable to the Respondents for the shares transferred before the rebasing of the kwacha. R3 The arguments advanced by the learned advocates for the Appellant are that the issue as to the status of the kwacha during proceedings in the Court below was never in dispute and as such, the need to raise it both in the Court below and in the Court of Appeal did not arise. According to Mr. Sangwa SC, even the remedy sought in the alternative by the Appellants in the Court below was clear that it had in mind the status of the kwacha by stating it as un-rebased when referring to the KSOO, 000,000.00 claimed as the value of the 500,000,000 shares they had agreed to transfer to the Appellant. It was for the said reasons that in the draft order embodying the Judgment of the Court which was forwarded to the Respondents' advocates, the advocates for the Appellant put the figure at K580, 000.00 upon which they computed interest and paid into Court. On behalf of the Respondents the advocates for the Respondents led by Mr. V. B. Malambo SC argued that no variation could be made to a Judgment once it is sealed except through the appeal process. It was further argued that the functus officio principle applied such as to confer no jurisdiction upon a single Judge or indeed the full Court to alter its Judgment in any way. R4 Mr. Malambo SC further argued that the doctrine or rule for embodying the Judgment of the Court in an order was as stated by the learned authors of Halsbury's Laws of England Volume 26, 4 th Edition in paragraph 40. He says according to that paragraph, a Court may pronounce an oral Judgment and direct a party in whose favour the Judgment has been given to draft an order for sealing. He goes on to state that Order 10 Rule 23 of the Court of Appeal Rules and Rule 75 of the Supreme Court Rules apply to such Judgments. Most importantly Mr. Malambo submits that the order so drafted must reflect the terms of the Judgment as opposed to amending it. He buttressed his submission by drawing my attention to the case of Zambia Telecommunications Company (ZAMTEL LTD) and Aaron Mweenge Mulwanda and Paul Ng'andwe. 1 The Judgment of the Supreme Court of Zambia in that case was delivered on 22 nd February 2012. This was an appeal from the High Court by which on an application for an interpretation of the Judgment, the learned Judge took the liberty to review her Judgment instead and dismissed the application for interpretation of the Judgment. RS In the review, the learned Judge awarded the Respondents terminal benefits which she had inadvertently omitted to award in her Judgment. In its Judgment the Supreme Court referred to Order 20 Rule 11 / 1 7 of the Rules of the Supreme Court 1999 which provides as follows; «The Court has no power under any application in the action to alter or vary a Judgment after it has been entered except so far as it is necessary to correct errors in expressing the intention of the Court". It also referred to several cases which generally proscribe amending a Judgment and made the following statement at pages Jl0 and Jl 1 · ' «Jn our view, the learned trial Judge amended her Judgment, by adding a relief which she, inadvertently, did not grant. Such an amendment is not permitted on the various authorities referred to above. The terminal benefits were specifically pleaded. That she omitted to make a determination on them was an error on a fact. Such an error could only be addressed by an appeal and not an amendment of the Judgment; on review." In my view this Judgment is not applicable to the application before me as it is neither for review nor for interpretation of the Judgment R6 of the Court. The application is not intended to have the effect of amending the Judgment of the Court which I do not have power to do. The objective of Order 10 Rule 23 is as will be demonstrated hereunder. This argument is premised on the view that the application before me seeks to amend the Judgment by inserting the word rebased or un-rebased after the figure of K580, 000,000.00 and the bulk of the submissions on behalf of the Respondents attack that view on the basis that neither a single Judge nor the full Court has jurisdiction to do that as it is tantamount to amending the Judgment after it is sealed. It has also been argued that the re-amended defence and counterclaim was in the sum of K580, 000,000.00 and filed in 2014 and as such the issue of the amount being un-rebased could have been raised in the Court below. In addition, Mr. Sianondo submitted that if it was an issue of rectifying the Judgment the Appellant should have proceeded under Order 13 Rule 8(1) of the Court of Appeal Rules but that the said power is exercisable only by the full Court. Further submissions by Messrs Mambwe Siwila and Khanda on behalf of the Respondents were m erely to emphasize what Mr. Malambo SC and Mr. Sianondo had argued. R7 In wrapping up the arguments on behalf of the Respondents, Mr. Sikota SC submitted that in the Judgment the Court granted the alternative remedy in the counter claim which it nonetheless amended by warding not the K500,000,000.00 but the sum of K580,000,000.00 and rejected the USD60 million altogether. According to Mr. Sikota SC, there was a demonstration of the desire by the Appellant for the Court to add the words re-based in the brackets to the amount awarded. He then re-iterated Mr. Sianondo's submission that in that case, the omission of the word re-based in the Judgment is curable only under Order 13 Rule 8(1) of the Court of Appeal Rules but that unfortunately the train had already left the station as such an application could only be made within 7 days of the Judgment. In response, Mr. Sangwa SC submitted that the application could not fail as suggested by the Respondents because it was a mandatory requirement under Order 10 Rule 23(1) and Sub-Rule (4). Mr. Sangwa also protested that Counsel for the Respondents were putting words in his mouth and offering unsolicited advice as the application was very clear. R8 He simply put it that they had read the Judgment and understood it in a certain way while the Respondents had also read the Judgment and understood it in another way. It was now for the Court to settle the order embodying the Judgment. I must start by thanking the two teams of counsel on both sides for their arguments and the authorities cited. I am inspired to start with the issue to do with the import of Order 10 Rule 23 of the Court of Appeal Rules about which Mr. Malambo, SC argued that the rule was to be understood in the light of the guidance given in Hals bury's Laws of England. He then referred me to the form found in Volume 2 of the Rules of the Supreme Court 1999 specifically form Al to 44 at page 40. Having perused that form, I find it to be premised on Order 42 Rule 1 of the Rules of the Supreme Court 1999. I have also perused Order 42 Rule 1 of the Rules of the Supreme Court 1999 and found it to be detached from Order 10 Rule 23 of the Court of Appeal Rules. Quite apart from that it is clear that the circumstances under which an order embodying the Judgment may be made under the Laws of England are not exactly the same as those envisaged by Order 10 Rule 23 of the Court of Appeal Rules. In any case as submitted by Mr. Sangwa SC, the Rules of procedure applicable in England and Wales are resorted to only when our R9 rules are silent. In this case, Order 10 Rule 23 is very specific and without ambiguity on the procedure a successful party in the Court of Appeal must adopt following a Judgment of the Court. Whereas the Laws of England seem to confine such orders to oral Judgments as per the authority citied by Mr. Malambo SC, Order 10 Rule 23 is all encompassing as clearly stated by sub-rule 1 that; "A Judgment of the Court shall be embodied in an order." So whether or not the Judgment is oral, it shall be embodied in an order. The question therefore is what form shall the Order take and what is the intended purpose of such an order. In my considered view, the rule is very clear in the manner it is couched and does not require the assistance of foreign statutory provisions in its interpretation. In so stating, I entirely agree with the gist of the arguments advanced by the Respondents that the order is not intended to add or subtract anything that would have the effect of changing the intendment of the Judgment. The embodiment order is intended to give effect to the Judgment for the purpose of effective enforcement so as to allow the successful party to enjoy the fruit thereof. So to come back to the ma.1n bone of contention between the parties, what is the amount payable to the Respondent by the RlO Appellants for the 580,000,000 shares transferred 1n 2006 and 2007? In the Judgment of the Court, the amount ordered to be paid by the Appellants as reflected at page J40 paragraph 4 of the Judgment is five hundred and eighty million kwacha (K580,000,000.00) representing the value of the 580,000,000 shares transferred to the Appellant in 2007 at par value of Kl .00 per share. The Judgment of the Court should be viewed in light of the fact that there was no pleading either in the Court below or before the Court on whether or not the amount payable on the share was rebased. Trial in the Court below proceeded on the basis of the figures, as they existed in the pleadings reflecting the positions as at the time of the share transfers in 2006 and 2007. It will however, be noted that in the counter claim, which was the subject of trial in the Court below and the subsequent appeal before the Court, the remedy in the alternative as captured by the trial Judge at page J3 of the Judgment is stated as follows; (d) In the alternative, payment of the sum of KS00, 000, 000. 00 (un-rebased) ..... . " This is the remedy the Court gave to the Respondent except that it was altered to K580, 000,000.00 to reflect the 58% shareholding by Rll the Appellants as per the Shareholders Agreement of 26th February 2007. The fact that the Judgment of the Court does not use the words rebased or un-rebased is premised on the figures as stated in the documents and throughout the arguments by Counsel both in the Court below and on appeal is on the assumption that the parties understood well the implications of the re-denomination of the Zambian currency by Act No. 8 of 2012 on the nominal value of shares and share capital in companies limited by shares. The parties will however, note that at page J33 of the Judgment, in paragraph 2 where the Court applies its finding as to the misdirection by the learned trial Judge on the Shareholder's Agreement; the Court makes the following statement; " .... it follows that the Appellant is obliged to pay the sum of five hundred and eight million kwacha (580,000.00). That amount in figures in brackets conveys the Courts computation of the K580, 000,000.00 in view of the Re-denomination of Currency Act No.8 of 2012. The fact that the figure is not re-stated at page 40 of the Court's Judgment does not change the fact that K580, 000.00 is the correct amount due to the Respondents for the 580,000,000 shares transferred to the Appellant in 2007 which by operation of the law re-based to 580,000 in 20 12. R12 For avoidance of doubt on the effect of Act No. 8 of 2012; Section 9(1) provides as follows; "The value of goods, services, rights and obligations existing prior to the appointed date shall be expressed to reflect the re-denominated currency." And sub-section 4 provides as follows; "From the appointed date, a reference to the existing currency in any circular, guideline, directive or legal instrument shall be deemed (emphasis mine) to be a reference to the re-denominated currency. " Under the interpretation section, ((Appointed date" refers to 1st January 2013 and "legal instrument" means any document with legal effect. The import of Section 9 of the Act is therefore that effective 1st January 2013, any amount stated in figures reflecting the un rebased kwacha become re-based or re-denominated by operation of the law. Share Certificates as well as certificates of incorporation, being legal instruments, suffered the same fate with regard to the value of the shares stated there in. R13 It is therefore, beyond debate that the figures denominated in the Zambia currency in all the pleadings and documents presented before the trial Court and the Court of Appeal relating to the dispute herein are deemed to be a reflection of the re-denominated currency in so far as they are stated in amounts as they stood prior to 1st January 2013. Nominal share capital for ZPC may have been altered significantly over the years and following the Judgment of the Court below. Whatever the case is the 58% to 42% shareholding between the Appellant and the Respondents remains unchanged. I would therefore, settle the order embodying the Judgment of the Court pursuant to Order 10 Rule 23(4) of the Court of Appeal Rules as contained in the draft Order exhibited to the affidavit deposed to by John Peter Sangwa dated 21 st February 2019. I order each party to bear their own costs. - M. J. iavwapa COURT OF APPEAL JUDGE R14