This
is an appeal against the whole judgment of the High Court handed down
on 31 March 2015, in which the court a
quo
dismissed the appellants' application for rescission of judgment
for want of prosecution.
The
Facts
The
respondents issued summons against the appellants out of the High
Court, claiming the sum of US$4,634,547=72 together with interest
thereon at the rate of 3 percent per
annum
from the date of summons to date of payment in full. The claim was
not only defended but was also met with a counterclaim for US$2,1
million.
When
the appellants and their legal practitioners failed to attend a
pre-trial conference scheduled for the matter, the respondents
successfully applied for the appellants' defence to be struck off
and a default judgment was entered in their favour. By design or by
omission, the counter-claim was left extant.
No
issue turns on this development.
The
determination of the counterclaim has proceeded independently and was
at the pre-trial conference stage at the time of the hearing of this
appeal. I merely highlight the development in passing as it is one of
the instances in which the determination of the dispute between the
parties has been fragmented. I will highlight the other instance in
due course as I frown at the piecemeal fashion in which this dispute
has been presented and is proceeding.
A
day following the granting of the default judgment, the appellants
filed an application seeking to reverse the default judgment that had
been granted against them. In view of the fact that the respondents
subsequently filed another application to dismiss this application
and which I refer to below, I shall refer to this application as “the
application for rescission” for convenience and clarity.
The
respondents opposed the application for rescission. The appellants
did not file any other papers in the matter for a period in excess of
one month. Thereafter, the respondents filed a chamber application to
have the application dismissed for want of prosecution. I shall refer
to this second application as “the application for dismissal”.
Immediately
after the filing of the application for dismissal, the appellants
filed answering affidavits and heads of arguments in the application
for rescission. The respondents also filed their heads of argument in
the matter. The exact dates on which each party filed its papers are
fully captured in the judgment a
quo.
It
is recorded in the judgment a quo that before the set down of the
application for dismissal, the appellants wrote to the Registrar of
the High Court requesting that both applications be heard on the same
date. The letter is not on record. It is however not clear from the
judgment a quo whether the request to the Registrar, and which was
forwarded to the judge, was given any consideration by the court. It
is also not clear whether the appellants followed this request with a
formal application before the court for the consolidation of the
hearing of the two applications. What emerges from the judgment a quo
is that no hearing of either matter took place on the first set down
date as counsel for the respondents successfully applied for the
matters to be postponed to enable him to take instructions on whether
or not to argue the application for rescission.
When
the court a
quo
resumed its sitting, only the chamber application for dismissal was
argued and determined. On the turn, the court granted the application
sought by the respondents, effectively dismissing the application for
rescission of judgment.
Whilst
the issue of consolidation of the hearing of the two applications
does not arise in this appeal, I raise the issue because had that
practical course been taken, this appeal would not have arisen and
again the piecemeal fashion in which this dispute has proceeded would
have been minimised or avoided. This is yet another incident in which
the determination of the dispute between the parties was fragmented.
It is undesirable that disputes, especially commercial disputes such
as the one between the parties in
casu,
be dealt with in a piecemeal fashion as this tends to unnecessarily
protract the resolution of the dispute.
Ratio
decidendi of the judgment a
quo
At
the hearing of the matter in the court a quo, the respondents took a
point in limine. They contended, and correctly so, that the
appellants were barred, having filed their heads of argument out of
time. After dismissing the application to lift the bar, the court a
quo held that as a consequence of the appellants remaining barred,
the application for dismissal was unopposed. It treated the
application as such and granted the order prayed for by the
respondents. In its words, the court a quo held:
“It
is clear that once a party is barred and remains barred, the matter
is treated as un-opposed.”
I
form the above view on the ratio
of the judgment a
quo
notwithstanding that the court made some reference to the poor
prospects of success of both applications on the merits. Having
listed the many transgressions of the appellant and its legal
practitioners, the court a
quo
opined:
“Given
the non-compliance with the rules, I am of the view that the
respondents do not have any prospects of success in the event of this
application being determined on the merits. Any prejudice to be
suffered by the respondents is of their own making…,.”
Having
expressed itself thus, the court however proceeded to conclude as
follows:
“The
trajectory of all three matters was necessary as the manner in which
the respondents conducted themselves in the matter had a bearing on
the determination of the application for the upliftment of bar and
postponement. The conduct clearly reflects the respondents' and
their legal practitioners' dilatoriness. The
analysis of the conduct should therefore not be seen as an attempt to
determine the merits of the present application or the application
under case no HC2754/14.”…,.
On
the basis of the above, it appears clearly to me that whilst
expressing a view on the prospects of success of both applications,
the court a
quo
did not determine the application for dismissal on its merits.
The
Appeal
Aggrieved
by the decision, the appellants noted this appeal, raising three
grounds of appeal. The essence of the appeal is to attack the court's
failure to consider the application on its merits, and, in
particular, to make reference to the defence that the appellants had
raised in the application for rescission of judgment.
The
Issue
The
issue that falls for determination in this appeal, therefore, is
whether or not the court a
quo
was correct in treating the application for dismissal as unopposed
and to proceed to grant the order prayed for without making any
reference to the defence proffered by the appellants.
The
determination of this issue entails interpreting the rules of
procedure regulating the powers of a court when a respondent defaults
in filing heads of argument on time.
The
Law
The
law governing the powers of the court in circumstances where a
respondent files heads of argument out of time is clearly spelt out
in Rule 238(2)(b). The Rule provides:
“(2b)
Where heads of argument that are required to be filed in terms of
subrule (2) are not filed within the period specified in subrule
(2a), the respondent concerned shall be barred and the court or judge
may deal with the matter on the merits or direct that it be set down
for hearing on the unopposed roll.”
Rule
238(2)(b) is self-contained and deals exclusively with instances
where the respondent has filed heads of argument out of time. In the
self-contained provision, it is expressly provided that a respondent
who defaults in filing heads of argument out of time is barred for
that reason. The Rule then proceeds to regulate how the matter in
which the respondent has defaulted is to be disposed of. This is to
be contrasted with the provisions of Rule 239 which also governs the
hearing of applications generally, and, in the proviso to the rule,
the hearing of applications where a party is barred.
Rule
239 provides that:
“At
the hearing of an application -
(a)
Unless the court otherwise orders, the applicant shall be heard in
argument in support of the application, and, thereafter, the
respondent's argument against the application shall be heard and
the applicant shall be heard in reply.
(b)
The court may allow oral evidence.
Provided
that if one of the parties has been barred, the court shall deal with
the application as though it were un-opposed, unless the bar is
lifted.”
Clearly,
it is only when the court is proceeding under Rule 239 that it shall
treat the application as un-opposed if the respondent is barred. This
is the point that GARWE JA made in GMB
v Muchero
SC59-07. In useful orbiter
in
that matter, the learned judge drew the distinction between the
effect of a bar in proceedings under Rule 238(2)(b) and in
proceedings under Rule 239 as read with Rule 233.
A
clear reading of the rules, and of the decision in GMB
v Muchero
SC59-07, makes it clear that the effect of the bar arising from the
late filing of heads of argument and a bar arising from any other
default in terms of the rules are different.
It
presents itself quite clearly to me that where the respondent is
barred for failing to file his or her heads of argument on time, the
application cannot be treated as un-opposed. The provisions of Rule
238(2)(b), which I have cited in full above, are clear on that point.
The provisions of the rule direct the court hearing such an
application, where heads have been filed out of time, to either hear
the matter on the merits or to refer it to the unopposed roll. The
rule does not deem the application un-opposed.
The
Rule appears to me to be sound and based on the fact that once a
notice of opposition and opposing papers have been validly filed, the
late filing of heads of argument cannot automatically have the effect
of negating or nullifying such filing. The rule re-asserts the
common-sense position that the pleadings, having been validly filed,
remain extant until struck off the record by a competent court order.
A referral of the matter to the unopposed roll is one such competent
court order that will have the effect of nullifying or striking off
the record, the otherwise validly filed pleadings. A specific order
striking off the notice of opposition and opposing affidavits is yet
another competent order that can be made in the circumstances.
For
reasons of expediency, it may be argued that a court hearing such an
application, where heads have been filed out of time, may convert
itself into “the Unopposed Court” envisaged by the Rule and
dispose of the matter by granting the order sought.
I
express no views on this procedure.
The
point to make is that there must be a referral of the matter after
holding that the respondent is barred. The referral has the same
effect as striking off the respondent's defence. Whether a court
can then thereafter refer the matter to itself or not is not a matter
that arises in this appeal.
In
casu,
the court a
quo
fell into the error of holding that once a party has been barred
under Rule 238(2)(b), and “remains barred” the matter is treated
as unopposed.
As
I have shown above, the application does not automatically become
un-opposed. The court or judge may, using their discretion, proceed
to determine the matter on the merits or negate and nullify the
respondent's defence by referring the matter to the unopposed roll.
In other words, the court has to either dispose of the matter on the
merits or declare it to be now un-opposed by reason of the default.
Disposition
and Costs
The
court a
quo
fell into error by treating the application as un-opposed in
disregard of Rule 238(2)(b) of the High Court Rules. Its decision
cannot therefore stand as it is not in accordance with the law.
Accordingly, the appeal must succeed and succeed with costs. The
matter must be remitted for it to be dealt with in terms of the Rule.
In
view of the fact that the court had expressed its views on the merits
of the matter, the matter must be remitted to a different judge.
In
the result, I make the following order:
1.
The appeal is allowed with costs.
2.
The matter is remitted to the High Court for it to proceed in terms
of Rule 238(2)(b) of the High Court Rules, 1971.
3.
The Registrar of the High Court is directed to place the matter
before a different judge.
