Mercy Mathanga v. FDH Bank Limited - malawilii.org · Mercy Mathanga v. FDH Bank Limited Kenyatta...

-

Mercy Mathanga v. FDH Bank Limited

'...:.,: -~ ~,-,·.·· .:·-, .. ~.. .... .., ._.,,

JUDICIARY IN THE HIGH COURT OF MALA WI

PRINCIPAL REGISTRY CIVIL APPEAL NO. 7 OF 2017

(BEING IRC MATTER NO. 385 OF 2016)

BETWEEN:

MERCY MA THAN GA .................................................... APPELLANT

-AND-

FDH BANK LIMITED ....... : .......................................... RESPONDENT

CORAM: THE HONOURABLE JUSTICE KENYATTA NYIRENDA Mr. Mumba, of Counsel, for the Appellant Messrs Ngwata and Maliwa, of Counsel, for the Respondent Mrs. Doreen Nkangala, Court Clerk

RULING Kenyatta Nyirenda, J

There is before me an application by the Respondent for three orders, namely, (a) an order setting aside the enforcement order dated 30th April 2018 (Enforcement Order) for irregularity on the ground that the same was prematurely issued, (b) an order suspending the enforcement of an order on assessment dated 2ih April 2018 (assessment order) pending hearing and determination of appeal and (c) an order that if any sheriff fees, costs and expenses arise from enforcement of the assessment order, the same be paid by the Appellant.

The application is brought under 0.28, r.48, 0. 10, r.5(b) and 0.35, r.6(3) of the Courts (High Court) (Civil Procedure) Rules [Hereinafter referred to as "CPR"] as read with sections 57, 5A and 1 l(b) of the Courts Act.

1

-

Mercy Mathanga v. FDH Bank Limited Kenyatta Nyirenda, J.

The application is supported by sworn statement of Patience Favour Maliwa, a legal practitioner in the firm of Messrs Mbendera & Nkhono Associates, and the relevant part thereof provides as follows:

"3. THAT on ih November, 2016 the appellant filed an appeal against the judgment of the deputy chairperson of the Industrial relations court (!RC) which among other thing found that the appellant resigned from the respondent on her own as opposed to be dismissed. Now produced and shown to me as "PM 1" is a copy of the judgment delivered by the !RC

4. THAT the said determination by the !RC was made following by the appellant to have the matter disposed of by the !RC on a point of law. Now produced and shown to me are copies of the application filed by the appellant and the affidavit in opposition to the application filed by the respondent, which documents are exhibited as "PM 2 and "PM 3" respectively.

5. THAT on 19th May, 2017, the High Court (per Honourable Justice D Madise) delivered its judgement on the said appeal in which it is reversed the decision by the !RC The High Court further ordered that the matter be set down for assessment of compensation before the Registrar of the High Court. The Respondent filed an appeal against this decision on 1 ih July, 201 7. Now produced and shown to me is a copy of the judgement by the High Court and a copy of Notice of Appeal exhibited hereto and marked "PM4" and "PM 5" respectively

6. THAT proceedings were not stayed and as such the matter was set down for assessment of compensation. Accordingly, on 2 ih April, 2018 the Registrar of the High Court delivered its ruling on assessment of compensation by which the appellant was awarded a total sum of MKJJ,454,169.49 and costs. There is now produced and shown to me a copy and the execution notice exhibited hereto and marked "PM 7" and "PM 8" respectively

7. THAT on 30th April, 2018 an Enforcement Order in the form of Seizure and Sale Order was issued by the Registrar and the same day the sheriffs visited the respondent's premises where they seized a motor vehicle with registration number BU 2650, a Toyota Corolla. Now produced and shown to me is a copy of the said seizure and sale order and the execution notice hereto and marked "PM 7" and "PM 8" respectively

8. THAT now the respondent seeks an order setting aside the enforcement order dated 301h April, 2018 on the ground of irregularity the enforcement order having being issued and forced less than 14 days from the date of ruling on assessment. Further, the Respondent seeks an order suspending the enforcement of the order on assessment delivered by the Registrar of this court on the 2ih of April, 2018 pending the hearing and determination of the appeal filed by the respondent; and an order that any sheriff fees, costs and expenses from the enforcement of the assessment ruling be paid by the appellant.

2

-


9. THAT following the ex-parte order by this court dated 3rd May, 2018 the respondent took possession of the aforementioned Motor Vehicle from the Sheriff of Malawi through sheriff officer, Mr. Sheha who intimated t claim sheriff fees, costs, and expenses emanating from the enforcement on the 30th of April, 2018.

I 0. THAT following the enforcement of this assessment order herein, I went through the court file and I noticed that there was no such direction from the judge meaning the registrar had no jurisdiction to attend the application.

11. THAT the action herein is premised on the interpretation of section 32 of the Employment Act (Chapter 55:01 of the Laws of Malawi). The appellant argues, to which the High Court agreed by its judgment of 19th May, 2017, that from the wording of the said section the appellant is supposed to consent to a transfer of her contract of employment to a new employer in the event of the former employer's undertaking be sold, transferred or otherwise disposed of The respondent on the other hand argues that by virtue of the same section, the contract of employment transfers to new employer automatically such that an employee who expresses unwillingness to work for the new employer is deemed to have resigned and not dismissed.

12. THAT I repeat the contents of the paragraph and further state from the wording of the said section, it is clear that in the event of employer's being sold, transferred or otherwise disposed, the employee's contract of employment automatically transfers to the new employer and accordingly, an employee who expresses willingness not to work for the new employer effectively resigns. This being the case, it follows that the decision by the High Court in this matter is likely to be reversed.

13. THAT I repeat the contents of the above paragraph and further state that the appeal herein has high prospects of success more so when one considers that the High Court misquoted section 32 of the Employment Act by omitting the word, "Except as provided in subsection (2) ", which omission led to the judge to concluding as he did. Consequently, the judgment by Honourable Justice Madise is patently wrong and it will most likely be reversed on appeal.

14. THAT I am informed and verily believe the same to be true that the appellant is a salaried employee. This being the case the appellant will not be able to repay the amounts herein in the event that the appeal by the respondent succeeds.

15. THAT in light of the above, the interests of justice and fairness favour granting this application

16. WHEREFORE I pray for an order setting aside the enforcement order dated 30TH April, 2018 in the proceedings herein in any event for irregularity, as well as an order suspending the enforcement of the order on assessment delivered by the registrar of this court on the 271h of April, 2018 pending the hearing and determination of the appeal filed by the respondent. !further pray that the court

3


make an order requiring the appellant to pay all sheriff fees and expenses, if any, occasioned by enforcement of the enforcement order on 3 01

h April, 2018. "

The application is opposed by the Appellant and she filed the following sworn statement:

"3. I am currently employed by the First Merchant Bank Limited, Blantyre Branch where I am working as a Senior Relationship Manager. I am getting a salary of about MK2, 200, 000. 00 per month. I own a motor vehicle registration number MH 5831 Hyundai Accent which I bought whilst I was at the Respondent.

4. When I was leaving the Respondent, I had a loan of MK6, 742, 304.11 made up of education loans and motor vehicle loan. The Respondent sent to me Mr Mike Chitenje to grab the motor vehicle on account of these loans.

5. I therefore went to my new employers and obtained a loan and repaid the loan that I had with the Respondent. I will apply the funds from this judgment to repay the loan which I have with my employers. In the event that I am required to pay back, I will go and obtain another loan just as I did in the first place. Copy of the cheque of the money that I paid to the Respondent is attached hereto marked as exhibited as "MMJ ".

6. I note that the Respondent state that the appeal has a high chance of success. I do not think so. I was employment by the Malawi Savings Bank Limited which was merged with the Respondent. When they offered me employment in the merged entity I rejected that offer and the Respondent construed--- it as resignation. This cannot be the case. I could not have been forced to work for an employer I did not choose and I do not think that I had resigned. My contract was terminated because my employer ceased to exist. I am therefore entitled to the terminal benefits.

7. All in all, I am stating that I am not a pauper and that justice and fairness demands that the stay be refused. "

There are basically two issues for the determination by the Court in this application, that is, whether or not (a) the seizure and sale order dated 30 April 2018 (Seizure Order) should be set aside and (b) the order suspending enforcement of the Enforcement Order should be continued pending hearing and determination of the appeal?

Whether or not the Seizure Order should be set aside?

The Respondent seeks to have the Seizure Order set aside on the ground of irregularity. Counsel Maliwa submitted that the irregularity lies in the fact that the Appellant purported to execute well before there was default or failure by the

4

-

•


Respondent to comply with the court order. The arguments on the issue are covered in the Respondent's Skeleton Arguments as follows:

"3.1 .1 The starting point here ought to be section 6(1) of the Sheriffs Act (Chapter 3:05 of the Laws of Malawi) which provides as follows;

Any sums of money payable under a judgment of a court may be recovered, in case of default or failure of payment thereof forthwith or at

the lime or times in and in the manner thereby directed, by seizure and

sale of moveable and immoveable property of the judgment debtor in accordance with this Act [Emphasis by underlining supplied}

3. 1. 2 It comes out clearly from the above that sheriffs are only to be involved in

enforcing a judgment or an order when there is default or failure by the judgment

respondent to comply with the court order. This now begs the question to when

can it be said that there is either failure or default to comply with court order? Order 2 3 rule 9 of the Courts (High Court) (Civil Procedure Rules 201 7 (CPR)

has an answer. It provides as follows ,·

Any party shall comply with a judgment or order for the payment of an

amount of money, including costs, within 14 days of the date of the

judgment order, unless-

(a) the judgment or order specifies a different date for

compliance, including specifying payment by instalments,·

(b) any of these Rules specify a different date for compliance,·

or

(c) the court has stayed the proceeding or judgment

3.1. 3 Evidently from the above, an enforcement debtor is given 14 days within which to

comply with a money order. Cleary this is a period of automatic stay of the order.

The idea seems to afford the judgment respondent time to comply with the court

order. This goes well with the overriding objective of the CPR which is to deal

with matter justly. It is only when the period has elapsed without the enforcement

debtor complying with the order that it can be said, in terms of section 6(1) of the

Sheriffs Act, that there is either failure or default in complying with the court

order and the sheriffs can be involved at this point. Any enforcement that happens within the 14 days period is premature and consequently irregular.

3.1. 4 The present case does not fall within the exceptions outlined under order 23 rule

9. This being the case the 14 days period applies to this case. It follows therefore

that the order on assessment having being delivered on 271h April., 2018 no

5

-


enforcement order was to be issued unless the respondent had failed or defaulted in paying he amount ordered by 1 /h May, 2018. There is therefore no doubt that enforcement herein was irregular.

3.1. 5 Given the fact that the enforcement herein was irregular, an order suspending the same ought to be granted as of right. Failure to grant the same administers injustice to the respondent.

3.1. 6 Further to the above, we invite the court to note the provisions of order 28 rule 50(a) of the CPR, which provides as follows;

The court may suspend the enforcement of all or part of the order because facts have arisen or been discovered since the order was made or for other reasons ...

3.1. 7 We submit that the relevant facts warranting suspension of the order of enforcement herein have been discovered. These facts if were known to the court at the time of issuing the enforcement order, the court could not have issued it. And these facts are that the filling of the enforcement order was premature and irregular. This buttresses the need to suspend enforcement of the order herein. On this note we invite the court to the comments and position taken by the former Chief Justice Skinner in Barclays Bank D.CO vs De Figueredo ALR 9 (Mal) 32 where he dismissed an application for a charging order on the basis that there was no default on the part of the enforcement debtor since the judgment debt had not fallen due. The following were his comments;

3.1.8

3.1.9

In the instant case an order for payment by installment had been made and at the time the summons was issued none of the installments were arrears, nor indeed could be in arrears as the date of payment of the first installment had not then fallen due .. . In the circumstances I am not prepared to make an order imposing a charge on securities. In my opinion such an order should not have been sought and I order that the plaintiff pay the defendant's costs of and incidental to this application.

We submit that the appellant having caused irregular execution to be levied against the respondent, the appellant must be sheriff fees . Requiring the respondent to pay sheriff fees will mean the appellant is allowed to benefit from her wrongdoing.

On another note, we take this opportunity to ask the court to consider directing that no enforcement order is to be issued unless the enforcement applicant has filed with the court a certificate certifying want of compliance with the court order on the part of the enforcement respondent after the period within which the

6

-


enforcement respondent has to comply with the order has elapsed without compliance. This will bring order and eliminate instances of premature execution. "

In his submissions, Counsel Mumba put forward two propos1t1ons. Firstly, he argued that the rules do not require a party to make an application, as a precondition, to enforce a judgement in his or her favour. The argument was put thus:

"3.3 The Respondent has cited Order 28, r.3(1), of the CPR and has argued that the tenor of the said rule and the whole of Order 28 is that there is need for an application before a seizure and sale order can be issued. In this case, there was no such application.

3.4 Order 28 of the CPR deals with the issues of enforcement of judgments. Enforcement of money orders, which is the basis for the Respondent's contention, is the subject matter of Order 28, r.3, of CPR. It is couched as follows:

"Subject to sub rule (2), an enforcement creditor mav apply for the issue of an enforcement order to enforce a money order. "

3. 5 It is noted that the "may" which is used in the order which clearly suggests that it is not mandatory. Suffice to say that when an enforcement creditor chooses to make an application, then he must file the documents listed in Order 28, r.3(3). A reading of that sub-rule will show that in fact most of the documents required will be on the court file. Reproducing them will be a matter of repetition. Further, Order 28r3(4) states that the issuing of the documents by the court may be without a hearing and in the absence of the parties. This suggests that the process is more of an administrative issue.

3. 6 It is argued that it is clear from the rules that it is not at all times that there is a need for an application for an enforcement order to be made. If this was the case, then the rules should have said. The rules vest in the court the administrative duty of issuing the orders. In fact a reading of Order 28 rule 6 suggests that there may be enforcement orders under the Sheriff Act and others under the CPR 201 7. The rules do not say that in both instances, there is need for an application prior to the issuing of the enforcement order.

Secondly, Counsel Mumba contended that the submission by Counsel Maliwa for a 14 day automatic stay is misconceived:

"3. 7 The Respondent has also argued that there is an automatic stay for 14 days under Order 23 rule 9 of CPR 2017. The order states as follows:

.. .. [the text is as set out above]

3.8 It is noteworthy that this order is not about stay of enforcement of a money order. This is not what the rule stays. If a party wants a stay, he must apply for a stay. This is clear from Order 23 rule 9 (c) captured above.

7

-


3.9 It has been argued that this must be read together with section 6(1) of the sheriff Act. it provides as follows:

"Any sums of money payable under a judgment of a court may be recovered, in case of default or failure of payment thereof forthwith or at a time and in the manner thereby directed, by seizure and sale of the moveable and immoveable property of the judgment debtor in accordance with this Act. "

3.10 The section clearly takes of failure to pay forthwith. This shows that if there is a failure to pay soon after the judgment, the seizure and sale order may be issued by the court. "

I have considered the submissions by both Counsel and I am inclined to agree with Counsel Mumba. I am fortified in my view by the provisions of Order 23 of CPR. The Order deals with judgements and other orders and rule 6 is relevant. It states as follows:

"(]) Ajudgment or order takes effect from the day when it given or made, or such later date as the court may specify.

(2) This rule applies to all judgments and orders. "

It is clear from the foregoing that a judgment is enforceable from the date it is pronounced unless stated otherwise by the Court. In the present case, the operative date of the judgement was neither suspended to a later day nor qualified in any manner or form. In the circumstances, it is my holding that the issuance and execution of the Seizure Order was legally in order. There was no irregularity on the ground that the Seizure Order was prematurely issued or otherwise.

Whether or not the order suspending enforcement of the Enforcement Order be suspended pending hearing and determination of the appeal?

The background to this issue is of the simplest. The Registrar of the High Court delivered his ruling on assessment in favour of the Appellant in the sum of K13,454,169.49 and costs. This led to the issuance and execution of the Seizure Order. The Respondent then moved the Court, by way of an ex-parte application, for an order suspending enforcement of an enforcement order [hereinafter referred to a "suspension of enforcement order"]. The application was granted subject to an inter-partes hearing.

Counsel Ngwata submitted that this is a proper case for the Court to order the continuation of the suspension of enforcement order. He contended that much as the general rule is that a successful party should not be deprived the fruits of his or

8

-


her litigation, it is also true that courts these days are not averse to readily taking into account all matters that would lead to achieving justice in a particular case.

Counsel Ngwata cited a host of authorities and these included Mulli Brothers Limited v. Malawi Savings Bank [Hereinafter referred to as the "Mulli Brothers Case"], MSCA Civil Appeal number 48 of 2014, FDH Bank Limited v. Maranatha Girls Academy, MSCA Civil Appeal No. 22 of 201, Press Corporation Ltd and PressCane Ltd v. Rolf Patel and Others, MSCA Civil Appeal No. 26 of 2014, Great Lakes Cotton v. Amanita (Africa) Limited, MSCA Civil Appeal No. 11 of 2015, and Frank Jailos Chisakalimi v. Cassium James et al, MSCA Civil Appeal No. 212 of 2016,

With regard to Mulli Brothers Case, Counsel Ngwata quoted the following passage at page 6 of the judgement:

"It is well to add that we understand the law to be that the test whether a stay should be granted in the three-part test from RJR MacDonald Inc. (1994) 1 SCR 311 that also governs an interlocutory injunction: a serious issue to be tried, irreparable harm, and the balance of convenience.

The Court in the Canadian Federal Court of Appeal held that each of these tests is a separate threshold, so that each must be answered in the affirmative in order for a stay to be granted. Stratas JA pointed out that "[e]ach branch of the test adds something important" While that is true, it does not follow that each must be satisfied individually. The altenative is that all are balanced together. The balancing approach has been endorsed by Sack CA in Mosaic v PCS 2011 SKCA 120 and by Hoffmann Jin Films Rover International Ltd v Cannon Film Sales Ltd. [1986] 3 All ER 772 at 780 (Ch), who was explaining about the principal dilemma about the grant of interlocutory injunction but his views equally apply to stay of executions"

The case of The State and the Registrar of Financial Institutions ex-parte Prime Insurance Company Limited and Goss Katoki Mwalilino, MSCA Civil Appeal No. 14 of 2016 (unreported) was cited for the following dicta:

"Since Chitawire Shopping Centre v. HMS Foods and Grain Ltd (2015) Civil Appeal Case No. 30 (MSCA) (unreported), approving the approach of the court below in Matupa v Matupa and now confirmed by the full court in Mulli Brothers Ltd v Malawi Savings Bank Ltd (2014) Civil Appeal Case No. 48 (MSCA) (unreported), the principles for stay of execution pending appeal and interlocutory injunctions are unified. In either case and, of course in cases like them, the court is called upon to provide a measures in the interim, almost in the form of assurance, pending a final outcome, virtually uncertain presently, of future proceedings. The Court has to adopt step, by the measures taken, which, whenever the outcome is known, reduce the incidence of injustice or inconvenience on either party. We have yet to find an approach better than Lord Diplock 's in American Cyanamid v

9

•


Ethicon, accepted in thousands of cases in the court below and in this Court in the cases cited by Counsel. In cases as consequential as this one is shown to be and indeed in every such case it is important to apply those principles deliberately and deliberatively in order to achieve a just outcome. Ultimately the court resolves the matter on balance of convenience or justice. The court aims to advance measures that increase the likelihood of justice or convenience and ameliorates the likelihood of injustice or inconvenience on either party. "

Counsel Ngwata's summary of the above-mentioned authorities was couched m the following terms:

"3.24 What comes out clearly from the above explanation is that in totality of all the applicable principles, for an order for suspension of enforcement pending determination of an appeal to be granted, the applicant must demonstrate that there are good reasons for so doing and that it is in the interest of justice for the sought order to be granted. . This entails that the court must consider all the circumstances of the case and see from the same whether or not good reasons for suspending enforcement do exist and whether or not the same is in the interest of justice. By the authority in Mulli brothers case (supra), a consideration whether or not the appellant has an arguable case in instructive in this regard. We submit that this is a proper case for granting an order suspending enforcement. Since the appeal does not have prospects of success but rather high prospects of success.

3.25 Earlier jurisprudence on prospects of the appeal succeeding was to the effect that courts faced with applications for stay of execution pending appeal were not supposed to bother delving into the appeal itself as that was a duty reserved for the appellate court.

3.26 For instance, in Press Corporation LTD and PressCane Ltd vs Rolf Patel and Others MSCA Civil Appeal No. 26 of 2014, Justice of Appeal Chipeta stated as follows:

" .. . I have thus throughout to bear in mind that determining the appeal is not a task that is within my jurisdiction as a single judge of this court. It is very clear in my mind that the question whether the trial court was right or wrong in extending its worries in this case to matter that appear to have gone beyond the issues it had initially identified as due for determination of the pleading is a matter the full bench of the Supreme Court that will be impaneled will contend with and determine when the appeal herein comes to maturity."

Also see great lakes Cotton vs Amanita (Africa) Limited MSCA Civil Appeal No. 11 of2015

3.27 However, Courts have since adopted a flexible approach in dealing with the aspects to do with the appeal itself and the position is to the effect that as much as courts must drag their feet when it comes to commenting on the appeal at this stage, the same will still be taken into account where necessary. The Supreme

10

-

-

LJ


Court took a similar approach in Frank Jailos Chisakalimi vs Cassium James et al MSCA Civil Appeal No. 212 of 2016 and granted a stay pending appeal where the court was of the view that the applicant's appeal had a very high chance of success. "

The Respondent has placed great reliance on two matters, namely, its belief that (a) its appeal has high prospects of success and (b) the Appellant would be unable to repay the money if the appeal should be successful. Paragraphs 3.30 to 3.33 of the Respondent's Skeleton Arguments are relevant and these are couched in the following terms:

"3.30 The appellate judge misdirected himself on the law because he misquoted subsection (]) by omitting the relevant portion. Had the judge correctly quoted the provision, he would have arrived at a correct finding.

3. 31 Having demonstrated that the pending appeal has high prospects of success, what does the balance of the risk of justice demand? We submit that this demands that enforcement herein be suspended because not doing so would be to let the appellant go away with sums of money she is unlikely to keep after the appeal, let alone pay back. In essence suspending enforcement ensures that the respondent does not part with sums of money it is likely to keep after the appeal, and which sums the respondent is financially sound to pay if in the unlikely event of an adverse outcome from the appeal. That approach is consistent with the approach taken by the Supreme Court of Appeal in the Jailosi Chisakalimi vs Cassium James Case (cited at paragraph 3.27 hereof).

3.32 The considerations that the court ought to take into account when considering the risk of injustice or prejudice are not any different from what the court considers when taking into account which way the balance of convenience tilts when making a determination on an application for injunctions or stay of execution. This was duly acknowledged by the Supreme Court of Appeal in the case of Mulli Brothers Limited vs Malawi Savings Bank (supra) .

3.33 The solvency of the appellant, being a salaried employee, cannot be guaranteed where as that of the respondent is guaranteed. It follows therefore that the respondent is unlikely to recoup the sums of money herein once given to the appellant in the event that the appeal succeeds. The appellant on the other hand can always obtain the same from the respondent in the event that the appeal is unsuccessful. The balance of convenience therefore equally tilts towards granting the order suspending enforcement pending appeal. " - Emphasis by underlining supplied

The Appellant states that the interest of justice requires that the application for suspension of enforcement order should be refused. Counsel Mumba advanced three principal reasons in this regard. Firstly, he submitted that the general principle is that a successful party must not be deprived the fruits of his litigation. He cited, among other authorities, the cases of Minister of Justice v. Lim be

11

-


(1993) 16 (1) MLR 317, AR Osman and Co v. Nyirenda (1995) 1 MLR 13 and Nyasulu v. Malawi Railways (1993)16 (1) MLR 394 to buttress his submissions.

Secondly, Counsel Mumba disagreed with the Respondent's contention that the Appellant would be unable to pay back the judgment sum if she were to lose the appeal. He submitted that it was not enough for the Respondent to make a mere bare assertion regarding the Appellant's alleged impecuniosity. He further argued that the Respondent bore the onus to prove the Appellant's inability to pay.

Thirdly, Counsel Mumba submitted that a court will not grant a stay if it would be utterly unjust to do so even where it is established that the successful party is of no means. He contended that courts make it their business to ensure that unconscionable, unjust or inexpedient results are avoided. Reliance for this proposition was placed on the case of Stambuli v. ADMARC, HC/PR Civil Cause No. 550 of 1981 (unreported) [hereinafter referred to as "Stambuli Case"]

In this case, Stambuli brought an action against ADMARC, his previous employers, for false imprisonment. The trial ended in his favour and the court awarded him K4, 000.00 damages. ADMARC applied for a stay of execution of the judgment on the ground that Stambuli was impecunious and he would not be able to pay back the money in the event of the appeal succeeding. Stambuli was not employed at the time. Jere, J., refused the application, observing:

"If the court were as a habit to refuse the enforcement of its own judgment pending the hearing of appeals in the appellate court, this would be against then public policy, for it would tend to lengthen the period within which a successful party would collect his damages. It would further bring an element of uncertainty, hence encouraging parties to take the law into their own hands. However, the courts do realize that a party who has lost, no doubt, has the right to appeal to the appellate court and such appeal should not be pre-emptied. It appears to me what is required is to balance between the two views, but the scales are more weighed in favour of a successful party .. .. .

In the particular case, Admarc dismissed Stambuli, hence making him poor. Admarc are now asked to pay damages. Can they turn around and say, "Oh, Mr Stambuli, you are poor? Such, in any view, would be utterly unjust."

It was further contended that the reasoning in Stambuli Case was followed in City of Blantyre v. Manda and Others (1992)15 MLR 114 and Evangelical Development Programme v. Mahara Nyirenda, HC/PR Civil Appeal No. 4 of 2011 (unreported). In City of Blantyre v. Manda and Others, supra, the Court said:

"With the greatest respect, I agree fully with the approach articulated by the learned judge in the Stambuli case. I think it is always proper for the court to start from the

12


viewpoint that a successful litigant ought not to be deprived of the fruits of his litigation and withholding monies to which, Prima facie, he is entitled. The court should then consider whether there are special circumstances. The case of Baker v. Lavery, which I have cited above, seems to suggest that evidence showing that there was no probability of getting the damages back, if the appeal succeeded, would constitute special circumstance.

Broadly, I would agree with this statement, but it is not a closed rule. The total facts must be considered fully and carefully. I would, in this context, agree with the learned judge in the Stambuli case that even where the respondent would not be able to pay back the money, the court could still refuse to grant an order of stay if, on the total facts, it would be "utterly unjust" to make such an order. As will be recalled, the court refused to order a stay of execution on the Stambuli case on the ground that the applicant was responsible for the impecuniosity of the respondent. Tambala J followed the Stambuli case in Lever Brothers (Mal) Ltd v. Liabunya Civil Cause No. 542 of 1990. "

In Evangelical Development Programme v. Mahara Nyirenda, (supra), Potani, J, refused to grant a stay pending appeal even though the appellant had alleged that the respondent was a man without means.

I have carefully perused all documents on the Court file, including the sworn statements and written submissions filed by the parties, and listened to their counsel's oral submissions.

The legal principles which guide a court when considering an application for a stay of execution of judgment pending appeal are, to my mind, very clear. The general rule is that the Court does not make a practice of depriving a successful litigant of the fruits of his or her litigation: see Mike Appel & Gatto v. Saulosi Chilima (2013] MLR 231 and Re Annot Lyle (1886) 11 PD 114. Therefore, the mere fact that a party has exercised his or her right to appeal to a higher court does not mean that the execution of the judgment appealed against must be suspended.

In the present case, as already mentioned, the Respondent's case boils down to two grounds, namely, (a) that the appeal has high chances of success and (b) that the Appellant is a person of little means and as such, in the event of the appeal being successful, she will be unable to pay back any damages paid to her.

It is noteworthy that much as the presence of an arguable case on appeal may be relevant in determining whether or not it is appropriate to grant a suspension of the enforcement order, that in itself is not a ground for granting the suspension. There are other considerations to be taken into account before the court can render a decision on whether or not an order of suspension of enforcement order should issue.

13

-

-


With due respect to Counsel Ngwata, I have yet to see a judgment of a court of record in Malawi where an application for suspension of execution of judgement pending appeal was dismissed "because of one consideration". Authorities abound for the legal position that the granting or refusal of an application for stay of execution pending appeal is made upon the Court's exercise of its discretion. In exercising its discretion, the court considers all the circumstances of the case. It weighs up the risks inherent in granting a stay and the risks inherent in refusing it. In short, the essential question is whether there is a risk of injustice to one or both parties if it grants or refuses a stay. This, however, being a judicial discretion, the discretion must be exercised based on legal principles and sound reasons, not on preference or convenience.

Regarding the alleged impecuniosity of the Appellant, the onus lied upon the Respondent to demonstrate that the Appellant will not be able to pay back the compensation awarded her: see National Bank of Malawi v. D. Nkhoma t/a Nyala Investments and Anti-corruption Bureau v. Atupele Properties Ltd, (supra).

In National Bank of Malawi :v. D. Nkhoma t/a Nyala Investments, (supra), the court remarked thus:

"I have said above that the appellant's contention is that there is no reasonable prospect of recovering the money in the event of the appeal succeeding because the respondent is a person of little or no means. There can be no doubt that in order to enable a court to determine whether an appeal. if successful. would be nugatory by reason that there is no reasonable probability of an appellant getting the money back. is a matter of facts or evidence which an appellant must present to a court for assessment. Referring to the present case, it has been asserted that the respondent has, in the past, been unable to meet his obligations to the appellant, it is noteworthy that the obligations referred to were entered into the last decade. It seems to me that the appellant should have presented more facts than what I have to demonstrate that the respondent would be unable to repay the money if the appeal should be successful. On the contrary, the fact that the appellant granted a banking facility to the respondent after the loan of MK37, 764. 00 seems to suggest that there was no trouble between them and that the respondent was a person who would honour his obligations. " -[Emphasis by underlining supplied]

In Anti-corruption Bureau v. Atupele Properties Ltd, (supra), Tambala J A, made the following pertinent observation:

"First if [stay of execution] is within the discretion of the court. Secondly that the general rule is that the court shall not interfere with the right of a successful party to enjoy the fruits of litigation. Third where a respondent would be unable to pay back money then a stay may be justified. Lastly, the court would still have discretion to refuse a stay even where the respondent is impecunious if the stay would be utterly unjust and

14

-


oppressive. The bottom line is that the applicant must demonstrate that the respondent falls within the exceptions. It is not for the respondent to demonstrate capacity to pay back. The duty lies on the applicant to establish the respondent's lack of capacity to pay back." - [Emphasis by underlining supplied].

This ground has to fall by the wayside because the Respondent has failed to discharge the burden of demonstrating that the Appellant lacks capacity to pay back. I have read and re-read the sworn statement in support of the application and all I see are assertions, not backed by any evidence, that the Appellant, being a salaried employee, cannot pay back the money. The least that the Court expected the Respondent to do was to lead evidence regarding the Appellant's income vis a viz her expenditures. This the Respondent did not do.

In this regard, it may not be out of place to quote at lengthy from the dicta by Mkandawire, J., as he then was, in Khoza t/a Parre Communications v MBC (1999) MLR 134 at pages 135 and 136:

" ... the plaintiff has submitted that an appeal is not a stay of execution and the court should not make the practice of depriving a successful litigant of the fruits of its judgment. He submits further that a Court should not order (sic) a stay when (Khoza, supra) exceptional circumstances have been shown. He cited the case of Venetian Blind Specialists Ltd vs Bridge Shipping (Malawi) Limited Civil Cause No. 208 of I 984 (unreported). In that case the Court dismissed the application to stay execution because there was no affidavit. In the present case, there is an affidavit, but the assertion that the plaintiff will not be able to pay back the money has not been substantiated.

The general principle as stipulated under Order 59113 of the Rules of the Supreme Court is that an appeal does not operate as a stay and the court does not make a practice of depriving a successful litigant of fruits of his litigant and locking up funds to which he is prima facie entitled. The court may however order that there are good reasons for doing so. Where the appeal is against an award of damages, the long-established practice is that a stay will be granted only when the appellant satisfies the court that there will be no reasonable prospects of his recovering them in (Khoza, supra) the event the appeal succeeding- see Baker vs Lavery [I 845} I 4 QBD 769 CA. This requires the appellant to give good reasons why he believes that once the damages are paid, there is no prospect ofrecovering them in the event ofthe appeal succeeding.

In the present case, all the defendant has done is to make a bare assertion which is not supported by any facts. The judgment is the case of Baker v Lavery is very short. Lord Se/borne LC said in his brief judgment.

''The defendant is not entitled to have the application granted as a matter of' course. Evidence ought to have been adduced to show that the plaintiff would be unable to repay the costs i( he should be unsuccessful before the House o(lords. "

In the case of Baker v Laverry, Venetian Blind Specialist v Bridge Shipping (Malawi) Limited (supra) and The Anoo v Lycle (I 886) I I PD I I 4 no affidavit was made in

15

,.,

-


support of the application. But ifit may asked,· what is the difference between a case in which there is no a(fldavit and a case in which there is an affidavit which tells you nothing. In both cases. the application must fail because no good reasons or no special circumstances have been given why I must depart from the general principle. Where no special circumstances have been given a court is entitled to assume that if the damages are paid to the plainti(l he will be able to pay back in the event of the appeal succeeding. " - Emphasis by underlining supplied

All in all, and by reason of the foregoing, I am satisfied that justice and fairness tilts in favour of refusing to grant an order for the continuation of the suspension of the enforcement order. Accordingly, the application is dismissed. The Appellant to have costs of this application.

Pronounced in Court this 24th day of September 2018 at Blantyre in the Republic of Malawi.

Kenyatta Nyirenda JUDGE

16

Mercy Mathanga v. FDH Bank Limited - malawilii.org · Mercy Mathanga v. FDH Bank Limited Kenyatta...

Documents

Transcript of Mercy Mathanga v. FDH Bank Limited - malawilii.org · Mercy Mathanga v. FDH Bank Limited Kenyatta...