IN THE HIGH COURT OF MALAWI
COMMERCIAL CAUSE NUMBER 55 OF 2011
IN THE MATTER OF CITIZEN INSURANCE COMPANY LIMITED
IN THE MATTER OF THE FINANCIAL SERVICES ACT 2010
EX PARTE: THE REGISTRAR OF FINANCIAL SERVICES
CORAM: THE HONORABLE MR. JUSTICE L P CHIKOPA
Banda, Court Clerk
On April 30, 2011 we delivered a judgment in favour for the Respondent herein in respect of a petition to wind it up. Included in that judgment were orders dismissing the application for a winding up, an order that the applicant be liable to the respondent in damages the same to be assessed, that the applicant renders an account of his activities during the period he was Statutory Manager of the respondent Company and that the respondent Company be regarded as having had its license renewed from the date it was put on statutory management. The applicant has now brought an ex parte application seeking a stay of that judgment. The application is supported by an affidavit sworn by Counsel for the Applicant Mr. Likongwe. We have decided to give a rather elaborate ruling for purposes of clarity.
The law relating to stays of execution is not in dispute in our view. The cases of City of Blantyre v Manda &Others, Nyasulu v Malawi Railways, Harry Mkandawire v Malawi Electoral Commission & Billy Kaunda, State v Ministry of Finance & Others Ex parte Bazuka Mhango & Others, State v Speaker of National Assembly & Others Ex parte J Z U Tembo (Leader of Opposition case) are unanimous in the view that a successful litigant will not be kept away from the fruits of litigation unless there are good reasons for so doing. For instance that an appeal has a high probability of success in the court above should not be a right and proper primary consideration if at all in deciding whether or not to grant a stay. This because that would require the court hearing the stay application to go into the merits of the appeal which should not be the case at that stage of the proceedings. Especially where, as is the case in the instant case, the application is brought ex parte. This is more so when the application for a stay is made to the very court that heard and decided the matter the subject of the appeal. It would, indeed actually, create the absurd situation where the court whose decision is being appealed against has effectively to hear an appeal against its own decision. In our view a stay will however be granted if it is inequitable that the judgment be executed. One such case is where in a money judgment it is clear that the sum in issue will for instance not be paid back if the appeal is successful. In the instant case the applicant’s reasons for praying for a stay of judgment are enumerated hereinafter. We will get to them. For the meantime we think we should ask ourselves two questions.
Firstly what is the judgment appealed against all about? Thereafter we would ask and answer the question whether in the circumstances of this case it is inequitable that the judgment stands as pronounced or it is stayed. As to the first question we have in our view with sufficient clarity stated what orders we made in the judgment in issue above. The question therefore is whether the same be stayed as prayed for by the applicant. We did not give the applicant a viva voce hearing. We are however in possession of the above mentioned affidavit and written submissions. As to the former the relevant paragraphs are 4, 5 and 6. Paragraph 4 contends that a stay should be granted because the respondent will not be able to pay back whatever is awarded to it via the judgment in issue. Paragraph 5 talks of the applicant’s duties as industry regulator under the Financial Services Act. Paragraph 6 alleges that irreparable harm will be done to the public if it is allowed to resume operations because it may not be able to make good whatever insurance claims maybe made against it in the course of its operations. We think with respect that the applicant has since the judgment in issue misapprehended either the said judgment, the law applicable to stays of execution, its role as industry regulator or all of the above. When for instance the applicant speaks of sums of money that maybe awarded what sums is he talking about? Damages or sums of money as in assets or premiums? If it is damages one would think that it is a bit early in the day for the applicant to be talking of such sums and the respondent Company’s inability to pay seeing as there is at this point in time no such sums on the table. It seems to us idle therefore to be talking of inability to pay in those circumstances. The applicant also said the respondent Company would not be able to pay back because it has debts as acknowledged on pages 3 and 4 of our ruling. To begin we think an affidavit sworn by Counsel is no way to prove the respondent’s impecuniosity. Such affidavit is no more than hearsay. See National Democratic Alliance v Malawi Electoral Commission, Malawi Broadcasting Corporation and Television Malawi cited in the judgment in. But more than that and unless the applicant is talking off a different judgment we have not been able to find on the stated pages where we acknowledged that the respondent Company is indebted to whatever extent and is unable to repay such debts. As we recall all we did was set out the alleged debts. We never said they were proven debts or that the respondent Company was failing to repay them. If the applicant is talking about money as in assets or account we are of the view that the applicant was going to render an account anyway before handing over the Company to the liquidator or whoever if he had been successful in the application to wind up. We do not therefore understand why in those circumstances he should be squeamish about rendering an account now to such an extent that we should stay it. If it is money standing to the respondent Company’s account and any that the applicant used for his purpose or assets he is afraid of handing over to the respondent Company perhaps he should be reminded that this and these are the respondent Company’s property. If the Company must be kept away from them then it is for the applicant to show good cause why. He tried that via the application to wind up and did not succeed. We doubt whether he now should via a stay of execution.
We are not sure the applicant understands what he wants to achieve by paragraph 5 of the affidavit. It talks of the applicant’s duties to regulate. They are not now in issue and we have not anywhere said that they are anything other than what the applicant alleges they are. A mere narration thereof in this application is not of much use. We will let it be.
Paragraph 6 contends that irreparable damage will be done to the public and industry if the judgment is not stayed and the respondent stopped from operating. Nothing can be further from the truth. To begin with and unless the applicant will abdicate its functions the respondent Company will continue to be under the supervision of the applicant when they resume operations. We do not see how therefore the applicant will fail to perform his duty in respect of the respondent. Secondly any failure on the respondent’s part to pay claims presupposes that the Company has had business from the public. It is not as if the public will forced to do business with the company. We cannot therefore assume that there will be failure before there is business. But in any case if there is failure what is to stop the applicant from supervising and taking any necessary action like it probably does with all players in the industry?
The question therefore remains whether the applicant has showed on a balance of probabilities that it is equitable that the judgment herein will be stayed pending appeal. The applicant thinks so. We must disagree with them. This matter, we can now say, arose and carried on in our judgment due to systemic failures on the Applicant’s part. He must not be allowed to use the same failures to keep, for no good reason, the Respondent away from the fruits of a successful defense. That would be unconscionable. The scales of justice, in our further judgment, weigh in favour of us not granting the stay. The application is therefore dismissed.
Costs shall be in the cause.
Dated this December 6, 2011 at Blantyre.
L P Chikopa