Lamsat International Limited v African Banking Corporation Zambia Limited T/A Atlas Mara Zambia (Formerly known as Finance Bank Limited) (2023/HPC/0629) [2024] ZMHC 202 (16 April 2024)

IN THE HIGH COURT FOR ZAMBIA 2023/HPC/0629 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: LAMASAT INTERNATIONAL LIMITED AND UCOF URTOF JUDICIARY ME:RCIAL REG! .. O:\' AFRICAN BANKING CORPORATION ZAMBIA LIMITED T / A ATLAS MARA ZAMBIA (Formerly known as Finance Bank Limited) DEFENDANT Coram: Hon. Lady Justice Chilombo Bridget Maka For the Plaintiff: Mr. D. Mushenya - Messrs. Wright Chambers For the Defendant:Ms. M. L. Nkonde of Mweshi Banda Associates RULING Legislation Referred to: 1. The High Court Rules, Chapter 27 of the Laws of Zambia. 2. The Rules of the Supreme Court of England 1999 Edition. Cases Referred to: 1. Bimzi Limited vs. B & C Commodities and Shipping Limited SCZ 8/177/98. 2. African Banking Corporation (Z) Limited vs. Plinth Technical Works Limited and Others SCZ Selected Judgment No. 28 of 2015. 3. Sonny Paul Mulenga and Others vs. Investrust Merchant Bank (1999) Z. R, 101. 1. Introduction 1. 1. The Plaintiff filed an application for an Order to stay proceedings pending appeal on March 19 , 2024 , along with an affidavit and skeleton arguments. 1.2. The Defendant countered the application by filing an affidavit in opposition and skeleton arguments on April 5, 2024. 2. The Plaintiffs case 2.1. The crux of the affidavit evidence indicates that the Plaintiff contested certain aspects of my ruling issued on February 21, 2024. Consequently, they have initiated an appeal in the Court of Appeal against this ruling. The Notice of Appeal and Memorandum of Appeal were included as exhibits in the affidavit. The Plaintiffs stance is that the appeal holds promise of success. 2.2. Additionally, it was asserted that this Court had tentatively scheduled March 20, 2024 as the trial commencement date, contingent upon the parties exercising their right to appeal. Given the Plaintiffs appeal against the ruling, the tentative trial date has been rendered void. 2. 3. It was argued that proceedings should be stayed to prevent the occurrence of dual proceedings in both the High Court and the Court of Appeal respectively. R2 2.4. The arguments supporting the application were based on Order 36 Rule 10 of the High Court rules, which allows for the stay of execution of a Judgment or proceedings; Order 3 Rule 2 of the High Court Rules, mandating the Court to issue interlocutory orders in the interest of justice, and Order 47 Rule 5 of the High Court Rules, stipulating that an appeal does not automatically halt execution or proceedings. 2.5. Additionally, reference was made to the prov1s1ons of Order 10 Rule 5 of the Court of Appeal Rules, Order 59 Rule 13(1) of the Rules of the Supreme Court, and Order 45 Rule 11 of the Rules of the Supreme Court, all of which clarify the legal principle that an appeal does not result in a stay. It was argued that this Court possesses inherent jurisdiction to grant an order for the stay of proceedings. 2.6. Furthermore, it was contended that the trial date of March 20, 2024, was contingent upon neither party appealing against the ruling. 2. 7. The Court was referred to the established principles governing applications for orders to stay execution, as outlined in the cases of Binzi Limited v. Bee Commodities and Shipping Ltd1 1l. 2. 8. It was con tended that the Plain tiff has adequately demonstrated, through the presented Notice and R3 Memorandum of Appeal, that the appeal holds merit and promising prospects of success. 2.9. Furthermore, it was emphasized that if the Court of Appeal rules in favor of the Plaintiff without the proceedings in the High Court being stayed, significant prejudice would befall the Plaintiff. It was argued that the Court should prevent rendering the appeal futile. 2.10. Consequently, the Plaintiff urged the Court to stay these proceedings 3. The Defendant's case 3.1. The opposing evidence indicated that March 20, 2024, was designated as a trial date on January 25, 2024. Following the ruling, the Plaintiff was required to revise its pleadings, after which the trial was scheduled to commence on March 20, 2024. The Defendant contested the assertion that March 20, 2024, was a tentative date. 3. 2. It was argued that the notion of two proceedings before both the High Court and the Court of Appeal was unfounded. Additionally, it was argued that the Plaintiffs attempt to set aside the Court of Appeal Judgment would not be impacted by the claims that were ordered to be removed; such claims could be pursued in a new action. 3. 3. The crux of the legal arguments revolved around the Court's authority to set aside an ex parte order granted based on a misunderstanding of facts. This argument R4 was based on Order 32 Rule 6 of the Rules of the Supreme Court and the explanatory notes at Order 36 / 6 / 30 of the Rules of the Supreme Court. 3.4. The Defendant contended that the Plaintiff misled the Court by filing an application for stay of execution. This was because Order 19 Rule (3) of the High Court (Amendment) Rules prohibits litigants from making interlocutory applications less than 14 days before the start of the trial. The rule was deemed mandatory, and failure to comply was considered fatal. 3.5. The Defendant referred to the exception under Order 19 Rule 3(4) of the High Court (Amendment) Rules but argued that in this instance, the Plain tiff had no justification for not making the application within the prescribed time frame. 3.6. Regarding the merit of the application, it was argued that it lacked substance. Order 21 Rule 1 (2) of the High Court Rules was cited to support the argument that the law permits the separation of claims for fraud from those that were struck out. 3. 7. The case of African Banking Corporation (Z) Limited v. Plinth Technical Works Limited and Others12 1 was cited to demonstrate that the Supreme Court has endorsed the practice of joining or separating causes of action based on the circumstances. RS 3.8. Based on the aforementioned arguments, it was contended that the appeal had no chance of success, making the application to stay proceedings unwarranted. Furthermore, it was argued that the Plaintiff would not suffer any prejudice if the Court of Appeal ruled in its favor, as the contested claims would still be tried separately. Additionally, it was asserted that the appeal would not be rendered futile, as the Plaintiffs claims that were struck out would still be heard. 3. 9. It was argued that the application for stay was akin to the Plaintiff requesting the Court to reverse its position in the ruling. 3.10. The Plaintiff urged the Court to dismiss the application due to lack of merit, with costs. 4. Hearing of the application 4.1. During the hearing of the application on April 9, 2024, both parties were represented by Counsel. 4.2. Mr. Mushenya, on behalf of the Plaintiff, informed the Court that he was relying on the documents filed on March 19, 2024. 4.3. Furthermore, he reiterated that March 20, 2024 , was a tentative trial date, contingent upon the parties exerc1s1ng their right of appeal. It was argued that the Plaintiff did not violate Order 19 Rule 3(3) of the High Court (Amendment) Rules. R6 4.4. It was further highlighted that the Defendant had relied on Order 21 of the High Court Rules to argue that this application lacked merit, despite Order 21 dealing with admissions. 4.5. It was argued that since the Plaintiff had appealed against the ruling, the Court had a duty to stay proceedings to prevent the appeal from being rendered futile. It was contended that the appeal had merit and proceeding with the trial would prejudice the Plaintiff. 4. 6. Counsel prayed for the application to stay proceedings be granted, with costs in the cause. 4.7. On behalf of the Defendant, Ms. Nkonde also relied on the filed documents. She insisted that March 20, 2024, was the designated trial commencement date and not tentative. Therefore, compliance with Order 19(3) of the High Court (Amendment) Rules was necessary. 4. 8. It was reiterated that the trial could proceed while the appeal was ongoing in the Court of Appeal. It was argued that the appeal lacked merit, and therefore, this Court had no grounds to exercise its discretion to stay proceedings. 4.9. Counsel urged the Court to dismiss the application. 4.10. In response, Mr. Mushenya argued that the claims in the statement of claim are interconnected and cannot be litigated separately. It was asserted that simultaneous proceedings in both the High Court and Court of Appeal R7 would incur additional expenses for the parties and waste the Court's time. 4.11. Lastly, it was argued that the Defendant would not suffer any prejudice if these proceedings were stayed pending the appeal. e 5. Consideration and Determination 5.1. I have reviewed the respective affidavits and legal arguments submitted by both parties. 5.2. It is well-established that lodging an appeal does not automatically halt execution or proceedings under the judgment or ruling being appealed against. This legal principle is clarified in Order 4 7 Rule 5 of the High Court Rules, which states: "An appeal shall not operate as a stay of execution or of proceedings under the judgment or decision appealed from, except so far as the Court below or the Court may order, and no intermediate act or proceeding shall be invalidated, except so far as the Court below may direct." 5.3. It is undisputed that the appeal in this case concerns an interlocutory ruling issued on February 21, 2024. 5.4. The Plaintiff seeks to halt proceedings in the High Court pending the outcome of the appeal against the aforementioned interlocutory ruling. This application the ref ore falls within the purview of Orders 3 Rule 2 and R8 4 7 Rule 5 of the High Court Rules, which empower this Court to grant interlocutory orders in the interest of justice and to stay proceedings. 5.5. It is a well-established principle that a stay of proceedings pending appeal against an interlocutory decision will only be granted if the decision on the appeal will impact the final decision of the trial Court. 5.6. The Plaintiffs appeal contests this Court's decision that only the claim regarding fraud is admissible , while all other claims were deemed inadmissible and consequently struck out. 5. 7. In my opinion , the decision of the Court of Appeal will influence the main matter, particularly in determining which claims should proceed to trial. I do not subscribe to the Defendant's argument of piece-meal litigation, as it could lead to multiple actions. 5.8. Regarding the argument that the Plaintiff breached Order 19 Rule 3(3) of the High Court (Amendment) Rules by filing this interlocutory application, I find it invalid. The adjournment of the matter for trial on March 20, 2024, was subject to the parties' right to appeal. Once the Plaintiff filed the Notice of Appeal, it was evident that the trial date might be postponed. My understanding, even at that time, was that once an appeal was lodged, the trial would be halted pending appeal. R9 5.9. Although the Plaintiff should have filed the application for a stay of proceedings earlier instead of a day before the scheduled trial date , this lapse in timing cannot serve as a basis for denying a stay of proceedings pending appeal. 5.10. The paramount consideration in deciding whether to grant a stay is the prospects of success of the proposed appeal, as reiterated in numerous cases, including Sonny Paul Mulenga and Others v. Investrust Merchant Bank1 3l. 5.11. After reviewing the grounds of appeal presented, I find that the appeal raises a novel issue: whether a fresh action to set aside a Judgment of the Court of Appeal on the basis of fraud can be intertwined with other claims arising after the impugned Judgment. 5.12. Since the authorities cited have not directly addressed this issue, assessing the prospects of success becomes challenging. Therefore, my inclination 1s to stay proceedings and allow the appeal to be resolved. 5.13. It is crucial to note that the burden of proof lies with the Plaintiff, who should be afforded the opportunity to present its case as it sees fit, within the confines of the rules. Therefore , it is perplexing that the defendant insists on the plaintiff presenting its case piecemeal without articulating the prejudice it would suffer if the matter were stayed pending appeal. R10 5.14. Consequently, I agree with the Plaintiff that the Defendant has failed to demonstrate any prejudice they would suffer if this matter were stayed pending appeal. 6. Conclusion 6.1. The Plaintiffs request for a stay of proceedings pending appeal is justified. Consequently, the application is granted, with costs in the cause. Delivered at Lusaka this 16th April, 2024 Chilombo Bridget Maka HIGH COURT JUDGE Rll