Ecobank Malawi Limited v Makani t/a Makbros (MSCA Civil Appeal 68 of 2018) [2020] MWSC 15 (29 July 2020)

IN THE MALAWI SUPREME COURT OF APPEAL 5 MSCA CIVIL APPEAL NO. 68 OF 2018 (Being High Court (Blantyre Commercial! Division) Civil Cause No.174 of 2017) BETWEEN ECOBANK MALAWI LIMITED ..... 0. cece cee ee nee eees APPELLANT 10 AND SUHAIL ray MAKANI t/a MAKBROS |... eee RESPONDENT 15 CORAM: Justice E B Twea, SC, JA Justice R R Mzikamanda, SC, JA Justice A C Chipeta, SC, JA Justice L P Chikopa, SC, JA Justice F E Kapanda, SC, JA 20 Justice D F Mwaungulu, SC, JA Justice Anthony Kamanga, SC, JA ’ Roka and Mchungula of Counsel, for the Appellant Makiyi of Counsel, for the Respondent 25 Shaibu and Itimu, Judicial Research Officers Chimtande and Masiyano, Recording Officers Mombera, Court Reporter 10 15 20 25 30 35 40 45 JUDGMENT Kamanga, JA Background This is an appeal by the Ecobank Malawi Limited (the “appellant’) against the decision of the High Court (Blantyre Commercial Division) in Civil Cause No.174 of 2017 delivered on 31* May, 2018 in which the court below ordered Suhail Faruk Makani ta MAKBROS (the “respondent”) to pay a judgment debt of K58,179,116.60 owed to the appellant “in monthly instalments of K1,200,000 until the debt is fully repaid or until such a time that the appellant can produce ... evidence to show that the [respondent's] financial position has improved considerably to compel him [to] pay larger instalments”. The facts of this case, in so far as they relate to the appeal, are as follows: By an oral agreement made on or about 22"! November, 2016, the respondent sought and obtained from the appellant a temporary overdraft facility of K39,165,000 which, it was agreed between the parties, would be cleared within 7 days. The respondent failed to clear the overdraft, and his account, including interest and penalty charges, accumulated an outstanding balance of K58,179,116.60. On 15" June, 2017, the appellant commenced proceedings in the court below to recover the amount of K58,179,116.60 and interest thereon at the appellant’s floating base lending rate in effect from time to time increased by 10%. The respondent did not enter or file any defence to the appellant’s claim. On 4™ July, 2017 the respondent filed summons to pay the debt by instalments and the hearing of the summons was set down for 16" November, 2017. In the meantime, on 17" July, 2017, the court below entered a judgment in default for the appellant for the amount of K58,179,116.60 (comprising the amount of the outstanding overdraft, interest thereon at the appellant’s base rate from time to time increased by 10%); and on 24 August, 2017, the court below ordered a stay of execution and garnishee proceedings, pending the hearing and determination of the application to pay the debt by instalments. Application to pay debt by instalments The respondent’s application to pay the debt by instalments, filed on 4" July, 2017, was supported by an affidavit sworn by the respondent. The affidavit states, inter-alia, that the respondent admits being liable for the debt; that the respondent is unable to pay the debt at once, but can settle it by instalments; that the respondent has an average monthly income of K2,037,500 and monthly expenses and liabilities totaling K1,060,000; and that in the circumstances the best that the respondent can offer is the settlement of the debt by monthly instalments of K1,200,000. On 25 October, 2017, the appellant filed a sworn statement in opposition to the respondent’s application to pay the debt by instalments. In its statement in opposition the appellant stated that the debt and interest had at that time accumulated to K65,682,463.53, and interest was still accruing; that, assuming that the interest remained at 28% plus 10% throughout that period, it would take the respondent over 56 months to liquid the debt; that as a bank, the appellant keeps depositors’ money and as such it was risky to accept the respondent’s proposal to pay the debt 10 15 20 25 30 35 40 45 by instalments when there was no adequate collateral security offered; and that, accordingly, the respondent’s proposal to settle the debt by instalments was not acceptable to the appellant. On 10" November, 2017, the respondent filed a supplementary sworn statement in support of the application to pay the debt by instalments. In that statement the respondent stated that the overdraft facility was used to purchase goods which were delivered to a customer who had agreed to pay for goods upon delivery; that the customer failed to pay for goods and has since “bolted out of Malawi”; that all attempts to locate the customer have proved futile, and the respondent is unable to recover the purchase price of the goods; and that at the material time the appellant knew that the overdraft facility was unsecured, and that the transaction was not the first between the parties. Application for non-parties to produce documents On 8" December, 2017 the appellant filed an infer-partes application, pursuant to Order 1 rule 4 of the High Court (Commercial Division) Rules, 2017 as read with Order 17 rule 49 of the Courts (High Court) (Civil Procedure) Rules (Cap. 3:02 sub. leg p. 124), for the court below to issue a notice to produce documents against non-parties to the proceedings. The application sought to require the Director of Road Traffic to produce details of all motor vehicles registered in the name of Woolies Food Limited; the details to include vehicle type, year of make and engine type. The application also sought to require the Commissioner General of Malawi Revenue Authority to produce “copies of annual tax returns filed by Woolies food Limited since it was incorporated in March, 2014”. The sworn statement filed in support of the application states, infer- alia, that the respondent is a director and shareholder of Woolies Food Limited; that in his application to pay the debt by instalments, the respondent has not disclosed to the court below that he is a shareholder of Woolies Food Limited, nor has he disclosed what he earns as a shareholder of Woolies Food Limited and what assets that company has; that Woolies Food Limited has assets, including vehicles and machinery, in which the respondent has a stake or an equitable interest, and these or his shares in Woolies Food Limited can be sold to help the respondent pay off the debt. The gist of the appellant’s contention in relation to the application for non-parties to produce documents was that information and/or documents in the possession of the Director Road Traffic and the Commissioner General of Malawi Revenue Authority sought to be produced “is crucial to help the court gauge the true worth of the [respondent] so as to arrive at a proper order of how much [the respondent] can afford to pay by way of instalments”. The decision of the court below With respect to the appellant’s application for non-parties — the Director Road Traffic and the Commissioner General of Malawi Revenue Authority — to produce information and/or documents in their possession, the record of appeal (at page 112) indicates that the court below, on 1 March, 2018, ruled that “... the application does not disclose any steps taken by the lappellant] to show that it is not possible to prove the issue in the proceedings through a simple and inexpensive means as required under Order 17 rule 49 (2) of the Courts (High Court) (Civil Procedure) Rules, 2017; the [appellant's] request is denied; [and] ... the application is dismissed. Matter to proceed to hearing of the [respondent’s] application to pay debt by instalments on a date to be set down once parties file a notice of adjournment.”. 10 is 20 25 30 35 40 45 With specific reference to the respondent’s application to pay the debt by instalments, the record of appeal (at pages 146 to 147) indicates that the court below, on 31° May, 2018, took the view that the appellant did not suggest any specific sum of money that would be reasonable under the circumstances; that the appellant did not contradict the respondent’s assertion on his financial status apart from an attempt to show that the respondent had shares in a company which assertion was not proved by the appellant to the satisfaction of the court; that the appellant was concerned that the debt owed by the respondent was unsecured, but did not show how this state of affairs affected the repayment method offered by the respondent; and that the suggestion that a repayment period is too long is probably naive, where the appellant has factored in the debt, such interest rates, charges, penalties for late payment that, in essence, takes care of the delay and protects the claimant’s interest to recover the full value of its money. The record of appeal further indicates court below proceeded to make the following finding and order- “|.. Finding In the instant case, there was no substantiated suggestion the defendant did not make a full, frank and factual disclosure of his earnings and liabilities. Any attempt to discredit his testimony was not proved to the satisfaction of the court. He demonstrated that his financial position is such that he cannot liquidate the Judgment sum at once. From the facts, the inability of the defendant to pay the Judgment debt at once is genuine The offered amount of K1,200,000... which he has faithfully paid in, pending this judgment is reasonable under the circumstances. Consequently, the Court allows the application. ORDER it is ordered that the defendant pays the judgment debt in monthly instalments of KI,200,000.00 until the debt is fully repaid, or until the claimant can produce fo this Court evidence to show that the defendant's financial position has improved considerably to compel him to pay larger instalments”. The appellant's appeal The appellant, being dissatisfied with the decision of the court below, has appealed to this Court. In a notice of appeal filed on 1* June, 2018, the appellant faults the decision of the court below on the following grounds ~ “3, Grounds of Appeal (a) The learned Judge erred in ordering payment of the debt by instalments after glaring non-disclosures of the Respondent’s true financial position were unearthed during evidence; (b) The learned Judge erred in failing to consider the size of the debt and the repayment period when ordering the instalment payments; (ce) The decision of the court [below] is against the weight of the evidence”. 10 15 20 25 30 35 40 45 The appellant seeks a reversal of the decision of the court below, and instead prays for an order requiring the respondent to pay the entire debt at once, or by such instalments as would lead to the liquidation of the debt within 24 months, The appellant's arguments and submissions in support of the appeal During the hearing of this appeal on 25" June, 2019, appellant adopted the skeleton arguments which had been filed on 8'" August, 2018 in support of the grounds of appeal and made arguments and submissions. The gist of the appellant’s arguments and submissions in support of the appeal is as follows: The law relating to pavment of debt by instalments The appellant argues and submits that the law relating to pay debts by instalments is governed Order 28 rule 59 of the Courts (High Court) (Civil Procedure) Rules (Cap. 3:02 sub. leg. p. 124); that Order 28 rule 62 (1) states that in deciding whether to make an order for payment of a debt by instalments a court shall have regard to: whether the enforcement debtor is employed; the enforcement debtor’s means of satisfying the judgment debt; whether the judgment debt, including any interest, shall be satisfied within a reasonable time; the necessary living expenses of the enforcement debtor and the enforcement debtor’s dependents; other liabilities of the enforcement debtor; and where the applicant is the enforcement debtor, whether having regard to the availability of other enforcement means, making the order would be consistent with the public interest in enforcing orders justly; that Order 28 rule 62 (2) of the Rules states that in deciding whether to make an instalment order, a court may also have regard to any other matters a court considers relevant; and that Order 28 rule 63 of the Rules provides that in deciding the amount and timing of instalments, a court shall be satisfied that the instalment order will not impose unreasonable hardship on the enforcement debtor. The appellant cites the case of Leasing and Finance Company Limited v Maltraco Limited [1997] 2 MLR 250, in which it was held that (i) in considering an application to pay debt by instalments, the task of the court is to balance the interests of the judgment creditor, and his unfettered right to recover the debt at once, against a genuine failure or inability of the judgment debtor to settle the debt at once upon a full factual frank and honest disclosure of the judgment debtor’s means; (ii) that a court ought to be more cautious and more reluctant to allow instalments in a trading debt; (iii) that a prayer by a judgment debtor to pay a debt by instalments is in essence a prayer for the court’s discretion and most importantly it is a prayer for sympathy; and (iv) that a judgment debtor ought to approach the court with clean hands. The appellant contends that a court will not normally order payment of a debt by instalments where the judgment debtor can actually satisfy the debt, especially where the judgment debtor, with means, willfully and caiculatedly, pursues a deferred payment against the wishes of the judgment creditor’s or unjustified circumstances; that equally, a court should refuse an order for payment by instalments where the period of payment is unreasonable; that a court may not order payment of a debt by instalments where interest rates are very high as to make it impossible for the judgment debtor to extinguish the debt in a short time, and that, generally, a court will try to avoid hardship for the judgment creditor. The appellant cites the case of Chikowa Produce Ltd v Maldeco Aquaculture Lid High Court (Principal Registry) Civil Cause No. 150 of 2013, and contends that generally, the party applying to pay a debt by instalments must make frank disclosure of assets and liabilities. The appellant also cites the case of Stansfield Motors Ltd v National Bus Company Limited High Court (Commercial Division} Commercial Case No. 15 of 2014 and contends that a court must decline an application to pay debt by instalments: (i) where the judgment debtor’s financial 5 means are enough to enable the judgment debtor to pay immediately; (ii) if it is obvious that the judgment debtor would not be able to comply with the instalment order; (iii) if the time for payment is unreasonable; (iv) if the proposed instalments would not result in a net reduction of the judgment debt because of the amount of the interest that continues to run on the judgment 5 debt; and (v) that where the judgment creditor would suffer hardship by the amount of time it would take to pay off the debt by instalments, it becomes a relevant factor in refusing to exercise the court’s discretion in favor of the applicant. The appellant further cites the following case authorities — National Bank of Malawi v Jumbe [2005] MLR 315 in which the court in refusing to 10 order payment of debt by instalments, gave the following reasons- “That as it may be, that it would take too long in such a trading or commercial debt and that there is no supporting evidence of the defendant's financial information coupled with the tendency I observed 15 of not disclosing his full assets, I find it difficult to hold in faver of the defendant. In fact, this being a commercial debt special circumstances must be shown why the application must succeed. In my view this has not been accomplished.’’; Patrick Zachepa v Leyland DAF Malawi Limited High Court, Civil Cause No. 3797 of 20 2001 in which a plea to pay a trading debt in 20 months was rejected as the period was too long; Kerr Controls Lid v Yetman [1995] CanLII 10489 (NLSC) in which the court advocated for the balancing of the interests of the judgment creditor and the judgment debtor when making orders for payment of debt by instalments; 25 Edil Belmonte Limited v Petroline Global Solutions Limited [High Court of the Federal Capital Territory held at Nyanya- Abuja Motion Number FCT/HC/M/8599/2011] in which the court observed that- “In considering an application for payment of judgment sum by instalments, each case is governed by its own peculiar circumstances 30 and the interests of both the judgment debtor and judgment creditor must be taken into account. Some of the factors to take into consideration include: the financial status of the judgment debtor, whether the judgment debtor has the means to pay the judgment debt immediately; whether the judgment debtor will comply with the order 35 for payment by instalments; how long the proposed instalments will take to pay the debt and if the judgment creditor would suffer hardship by the length of time; the age and nature of the debt; if the amount of instalment to be paid will not result in a net reduction of the judgment debt because of the interest accruing on the judgment debt; the facts 40 adduced against the application by the judgment creditor; and the general overriding interest of justice in the whole application. These jactors are not necessarily exhaustive but it is important to state that no one factor is prevalent, the factors must be weighed against the others as awhole. An application for payment in instalments must be supported 45 by an affidavit of financial circumstances stating the assets, liabilities, income and expenditure of the judgment debtor... 10 15 20 25 30 35 40 45 T have already stated that this application seeks a discretionary relief from the court. An exercise of discretion is a liberty or privilege to decide and act in accordance with what is fair and equitable under the peculiar circumstances of the particular case, guided by the spirit and principles of law: See: The Owners of the MV. Lupex v Nigerian Overseas Chartering and Shipping Limited (2003) 9 MISC 156 at 168. Like all judicial discretions, the discretion is exercised judicially and judiciously. Judicial in the sense that it must not be capricious and must be for a reason connected with the case and judicious in the sense that it must be based on sound judgment marked by discretion, wisdom and good sense, See Eronini vs Iheuko (1989) 3SCNJ 130 at 141. In Olumegbon v Kareem (2002) 34 WRN I at 8, Mohamed JSC, stated: “\.. Judicial discretion would mean that they were to act ‘according to the rules of reason and justice, not according to 435 private opinion and according to law and not humor’. With respect to paragraph (a) of the grounds of appeal, namely, that “the learned Judge erred in_ordering payment of the debt by instalments after glaring non-disclosures of the Respondent’s true financial position were unearthed during evidence With specific reference to the respondent’s explanation regarding what he did with the MK39 million, and the allegation that the customer to whom he supplied goods had bolted from Malawi, the appellant contends that the respondent’s story “sounds fantastic” and “is so porous you can drive a coach and horses right through if’, and that the court below was wrong to conclude that it was irrelevant to comment on it through the cross examination to question the veracity of the respondent’s story or explanation. The appellant contends that the purchase of goods worth over K39 million locally would entail a transaction that involves value added tax, and one would get an official receipt in respect thereof, but that the respondent did not exhibit in court any receipt evidencing the purchase of goods; that under the scheme of the Value Added Tax Act, every taxable trader is at the end of the month when filing for Value Added Tax on sales, able to claim a refund of all value added tax paid on purchases or stocks, but the respondent who, on his own admission, was registered for value added tax, did not insist on a value added tax receipt on a purchase of goods worth over MK39 million; that the respondent did not exhibit in court any delivery note in relation to the goods, and this casts doubt on whether any such goods were really bought or supplied; that the respondent also did not exhibit any invoice or any value added tax invoice which is mandatory by law under the Value Added Tax Act, and this too raises doubt on whether goods worth MK39 million were really supplied; that ifthe goods were supplied and lost, the respondent did not exhibit in court a tax return for the year in question showing a loss of MK39 million; and that, if the customer to whom the goods were supplied had bolted, whether the respondent reported the matter to the police and, ifso, where the police report is. The appellant highlights the fact that the court below thought it irrelevant to comment on the respondent’s explanations through the cross examination to question the veracity of the respondent’s story or explanation, and the appellant argues and submits “‘that it is material and reievant to question the respondent’s story because its improbability leads to a possibility that the money may not have been [ost after all, but has been invested in other business ventures, perhaps even in the family business, and that possibility becomes a probability when no evidence of purchase or delivery of the goods is tendered, and, if that is the case, then the whole premise on which the application to pay debt by instalments, being loss of goods bought and 10 15 20 25 30 35 40 45 supplied, collapses, and with that collapse, must follow, the collapse of the application to pay debt by instalments because, then the judgment debtor cannot demonstrate an inability to pay debt”. With specific reference to disclosure of his financial status, the appellant contends that the respondent’s hands are too soiled by non-disclosures to sway any court to believe his explanation, and that there were the several non-disclosures relating to his real financial status: that as a General Manager of the Company, the respondent must know that under the Employment Act, one needs to have a written contract of employment or must have a memorandum containing terms of employment, but he never brought any such document to court- he only brought what purported to be a pay slip; that he also never bothered to produce current bank statements for his business; that he only revealed that he has an asset, a car, when cross examined by the Judge in the court below, but the value of the car was not revealed; that with respect to the issue that he was a shareholder of Woolies Foods Limited, he is clearly shown in the Memorandum and Articles of Association as a 33% shareholder in that company, but when confronted in court, he falsely stated that he had been a shareholder in the Company but he was no longer a shareholder, and his shares were taken away from him as he owed the company money; that he was asked why the Register of Companies does not show this change of situation, he laid the blame on his lawyer; that shares can only change hands under the Companies Acts through a share transfer form duly signed, filed and registered, but none was exhibited to the court below; that in reality and in fact, he is still a shareholder in Woolies Foods Limited in which he holds 33% shares; and that this fact was not disclosed. The appellant contends that when this fact is taken into account, it puts to question the judgment debtor’s wealth; that having shown he has shares, which have a value and can be sold, it is questionable whether the court below was correct in accepting the respondent’s story that he was just an employee with no other assets and that all he could afford to liquidate the debt herein was MK1,200,000 per month. The appellant cites the case of Leasing and Finance Company Limited v Maltraco Limited (supra) and urges this Court to set aside the order of the court below allowing the respondent to pay the debt by instalments for failure by the respondent to make a full and frank disclosure of material facts regarding his true financial position. With respect fo paragraph (6) of the grounds of appeal, namely, that “the learned Judge erred in _ failing to consider _the_size of the debt_and the repayment period when ordering the instalment payments” The appellant contends that the monthly instalment of K 1,200,000 ordered by the court below is too small compared to the size of the debt, and leads to an unreasonably long period of repayment to clear the debt, and further creates a situation which totally ignores the interests of the appellant. The appellant argues and submits that the cited case authorities show that when considering an application to pay debt by instalments, the interests of the judgment creditor also have to be taken into account; that judgment creditor in this case is a commercial bank; that commercial banks are deposit taking institutions - they take (more precisely, borrow) money from the general public to on lend it out at a profit; their customers may demand their money any moment and the banks, as debtors to the customers, must repay it on demand; that when that money is taken in an unarranged manner by third parties like the judgment debtor herein, this would not only make the bank fail to repay its customers on demand, but it also impedes the general circulation of credit in the economy; and that courts, therefore, have to balance all the prevailing interests when making orders for payment of debt by instalments. 8 10 15 20 25 30 35 40 45 The appellant further argues and submits that the overdraft facility herein was 7 days, and the court below has effectively converted a 7 days’ facility into an over 5 years’ facility when it was not the intention of the appellant to do so. In this regard the appellant refers specifically to the observation of the court below at page | of its judgment (147 of the record of appeal) that “The suggestion that a repayment period is too long is probably naive, where the claimant has jactored in the debt, such interest rates, charges, penalties for late payment that, in essence, takes care of the delay and protecis the claimant’s interest to recover the full value of its money’, and the appellant faults the reasoning of the court on the basis that (i) there was never an intention by the appellant to grant the respondent a long term facility; that if that had been the case, the appellant would most probably have taken some security for the overdraft facility; that there is now a long term unsecured exposure on the appellant’s books, something which would put it at loggerheads with the regulator of financial services; (ii) that at the time of filing the writ in this matter, the debt had moved from the MK39 million to over MK58 million, and that at the time of the filing of Mr. Kabalawoza’s affidavit in opposition to the application to pay the debt herein by instalments, the debt herein had increased from the MK58 million to over MK65.6 million and, by his own admission during the hearing, the respondent stated that the debt was now over MK74 million; and that in such a scenario, it would be grossly unjust to the appellant to order the respondent to pay the debt in an inordinately long period. The appeliant further contends that nowhere in its judgment did the court below show that it had taken into account the appellant’s interests, as a judgment creditor, at all. The appellant refers to the observations of the court below at page | of its judgment (page 146 of the record of appeal) “The claimant reasoned that it would take it, an unreasonably long period to recover its money, The claimant asked the court to reject the defendant's offer and instead compel him to make substantial payments that would facilitate quicker liquidation of the debt. The claimant did not suggest any specific sum of money that would be reasonable under the circumstances”, and the appellant argues and submits that it was sufficient for the appellant to indicate that the proposed repayment period was unreasonably long and request the court to adjust it to higher levels in its discretion. The appellant also argues and submits that the fact that there was no indication of what would be reasonable should not have been used against the appellant; that from the appellant’s perspective, the respondent was granted only a 7 days’ overdraft facility, and the appellant was entitled to have its money back, and that this should have been an indication to the court below that in the appellant’s mind, MK1, 200,000.00 per month had been rejected and needed to be bettered. The appellant also refers to the observation of the court below on pages 1 to 2 of its judgment (at page 146 to 147 of the record of appeal) “Nor did the claimant contradict the defendant’s assertion on his financial status, apart from an attempt to show that the defendant had some shares in a company which assertion was not proved by the claimant to the satisfaction of the court’, and the appellant argues and submits that “the court record will show how the respondent was cross examined on this point to an admission that he held shares in the company; that although the respondent alleged that he parted with the shares, he had nothing to show for such an assertion; that it is also untrue that the appellant never challenged the respondent’s financial status; and that the court record will show such a challenge, starting with a challenge to the truth of how the respondent used the money and how he lost it, to the non- disclosures regarding the respondent’s financial status. The appellant also refers to the observation of the court below on page 2 of its judgment (page 147 of the record of appeal) “the claimant was further, concerned that the debt owed by defendant was unsecured. The claimant did not show the Court how this state of affairs affected the repayment method offered by the defendant’, and the appellant argues and submits that it 10 15 20 25 30 35 40 45 is very risky for the appellant to have on its books an unsecured long term debt of the magnitude herein; that the repayment method of monthly cash payments, by a natural person over such a very long period, is very risky to the appellant, considering the vicissitudes and vagaries of life and the unsecured nature of the debt, and exposes the appellant to a risk of failure to recover the entire debt herein. The appellant also refers to the observation of the court below on page 2 of its judgment (page 147 of the record of appeal) “any attempt to discredit his testimony was not proved to the satisfaction of the court”, and the appellant argues and submits that “the court below is confusing issues and believes that the appellant bears a burden of proof at such hearings; that in accordance with law, even if the judgment debtor shows his true financial position, a court must balance his interests with those of the judgment creditor, and a court is not obliged to award the judgment debtor his wishes simply on his mere say so; that even where the judgement debtor appears alone before the court, the court would still have to consider the judgment creditor’s interests. The appellant contends that in this case, he challenged the respondent’s application to pay the debt by instalments and it seemed, in the court’s mind, the burden of proof was on the appellant to show that the respondent’s suggestions on repayment period and amount were unreasonable. The appellant contends that the burden of proof was on the respondent to show that the proposed repayment of the debt herein by monthly instalments of K1,200,000 was reasonable, The appellant also refers to the conclusion of the court below on page 2 of its judgment (page 147 of the record of appeal) “He demonstrated that his financial position is such that he cannot liquidate the judgment sum at once. From the facts, the inability of the defendant to pay the judgment debt at once is genuine, The amount offered of MK1, 200,000.00 which he has Jaithfully paid in, pending this judgment is reasonable under the circumstances”, and the appellant argues and submits that this “statement appears to indicate a one-sided approach to the application to pay the debt herein by instalments in which the court below focused on the judgment debtor and had no regard, at all, to the interests of the judgment creditor; and that if the judgment creditor has to have any ‘mercy’ from the court, he has to bear the burden of disproving the judgment debtor’s assertions. This one-sided approach, the appellant argues and submits, contradicts established precedent that it is the judgment debtor that is at the mercy of the court and that the judgment creditor has every right to collect the whole debt, and at once. The appellant contends that nowhere in its judgment does the court below discuss and consider the appellant’s interests, as a judgment creditor. The appellant faults the approach of the court below on the basis that, for no good reason, the court below barred the appellant, as judgment creditor, from seeking to discover evidence from non-parties. The appellant argues and submits that “you cannot bar someone from accessing information and then later turn around, tell them that they have failed to discharge an (imaginary) burden of proof” that the appellant had not contradicted the assertions of the respondent regarding his financial status, as the court below did in this matter. The appellant, accordingly, urges this Court to overturn the approach adopted by the court below which, it is contended “makes the economy a debtor's paradise than a fair one for both debtor and creditor’. With respect to paragraph (c) of the grounds of appeal, namely, that “the decision of the court [below] is against the weight of the evidence” The appellant highlights the apparent complete failure by the court below to discuss and consider in its judgment: (i) the cross examination of the respondent, on behalf of the appellant, and (ii) the unchallenged evidence of Mr. Kabalawoza in opposition to the application to pay 10 10 15 20 25 30 35 40 45 the debt herein by instalments, and the appellant contends that instead the court below went into generalized conclusions on the evidence. In this regard it is argued and submitted that the appellant managed to show, through cross examination, the improbability of the respondent’s story on how he bought and lost goods, and that in all probability the proceeds of the overdraft facility was merely diverted to some other venture or activity and could still be available to settle the debt herein in full; and further that the appellant also managed to show that the respondent must still be a shareholder in Woolies Foods Limited; that Woolies Foods Limited, being a going concern, the value of the assets of the company would be relevant to determining the respondent’s net worth; that the respondent owns 33% shares in Woolies Foods Limited which he can liquidate to settle the debt in full; that the court below barred the appellant from making any inquiries from third parties regarding the net worth of the Woolies Food Limited and the respondent; that the appellant also demonstrated that there was such heavy non- disclosure of material facts as to disentitle the respondent to any order sought for payment of the debt by instalments; that even after the court below discovered that the respondent failed to disclose the fact that he has a car, this did not move the court below, at all, to realize that there was a lot that the respondent had not disclosed regarding his financial status. The appellant, accordingly, argues and submits that the decision of the court below is against the weight of the evidence. The respondent's arguments and submissions in opposition to the appeal During the hearing of this appeal on 25" June, 2019, the respondent adopted the skeleton arguments which had been filed on 11" April, 2019, in opposition to the grounds of appeal, and made arguments and submissions set out hereinafter. It is pertinent to observe that, in both its skeleton arguments and its arguments and submissions during the hearing of the appeal, the respondent did not specifically address the grounds of appeal filed by the appellant against the decision of the court below, or the arguments and submissions made by the appellant in that regard. The gist of the respondent’s arguments and submissions in opposition to the appeal is as follows- With respect to the facts and the evidence in relation to the appeal, the respondent contends that in his affidavit evidence he stated that he was unable to pay the debt at once, and could only pay the debt by instalments; that in his affidavit the respondent laid out his expenses and demonstrated that the only amount he would be able to pay was monthly instalments of K1,200,000; and that as at 26" April, 2018 he had paid K9,600,000, and further that to date he has paid more than half of the principal amount of the debt; that in his supplementary affidavit, the respondent deponed on what the overdraft facility was used for and why he was unable to pay back the money at once; that the overdraft facility was used to purchase goods which were delivered to a customer who failed to pay for the goods and absconded, and hence his inability to pay back the money to the appellant at once; that in cross examination he told the court below that he was not a director of Woolies Food Limited, but was just an employee; that he ceased to be a director of Woolies Food Limited in July 2018; and that he owed Woolies Food Limited money, and the value of his shares in the company was offset against the money he owed the company. Law relating to payment of debt by instalments With respect to the law relating to payment of debt by instalments, the respondent, like the appellant, refers to Order 28 rule 62 of the Courts (High Court) (Civil Procedure) Rules, and specifically Order 28 rule 62 (1) of the Rules which provides that in deciding whether to make an order for payment of a debt by instalments the Court shall have regard to whether the judgment debtor is employed; the judgment debtor’s means of satisfying the judgment debt; ii 10 15 20 25 30 35 40 whether the judgment debt, including any interest, shall be satisfied within a reasonable time; the necessary living expenses of the judgment debtor and the judgment debtor’s dependents; other liabilities of the judgment debtor; and any other relevant matters the Court may consider relevant. The respondent, like the appellant, also cites the case of Leasing and Finance Company Limited v Maltraco Limited (supra), in support of the proposition that when considering applications to pay debt by instalments, the task by the court is to balance the interests of the judgment creditor and his unfettered right to recover the debt at once, against a genuine failure or inability of the Judgment debtor to settle the debt at once based upon a full factual frank and honest disclosure of the judgment debtors means; and that a prayer by a judgment debtor for payment of a debt by instalments in essence is a prayer for the court’s discretion and most importantly it is a prayer for sympathy. The respondent, like the appellant, further also cites the case of Edil Belmonte Limited v Petroline Global Solutions Limited (supra) which sets out the relevant law, and the approach to be adopted by a court when considering and determining an application to pay a debt by instalments. However, unlike the appellant, the respondent additionally cites the case of Mzunga v Kaledzera (2001- 2007) MLR (Comm Series) 202 in which it was held that- “where the judgment creditor fails to challenge the financial position as presented by the judgment debtor and the court is satisfied that the judgment debtor’s position is accurate, an order should be made allowing the judgment debtor to pay by instalments”. The respondent also raises the issue of judicial discretion, and the propriety of an appellate court considering and reversing a decision of a lower court based on the exercise of discretionary powers. In this regard, the respondent cites the following cases- Birkett v James (1978) AC 297 in which it was held that- “\.. A question of discretion has been described as a situation in which an appeal of a lower court or a trial Judge’s order turns on that Judge: “balancing against one another a variety of relevant considerations upon which opinions of individual judges may reasonably differ as to mod, their particular weight in particular cases”: Harper v Harper (1980) [SCR 2 in which the Canada Supreme Court held that- “... An appellate court should be extremely reluctant to interfere with the exercise of a discretion by a trial Judge. If a Judge proceeds on a principle applicable to the facts of a case and makes a decision judicially in exercise of his discretion, this Court will not interfere. But if it appears that a Judge has misdirected himself or that his decision is so wrong as to amount to an injustice, the court should review the facts upon which the judgment ought to be given.”; Elsom v Elsom (1989) 1 SCR 1367 in which it was held that- “Courts of Appeal should be highly reluctant to interfere with the exercise of the trial Judge's discretion. It is he who has the advantage of hearing the parties and is in the best position to weigh the equities of the case.”. 12 10 15 20 25 30 35 40 The respondent argues and submits that the decision of the court below regarding the granting of the order to allow the respondent to pay the debt herein by monthly instalments of K1,200,000 involves the exercise of discretion by the court below, and the respondent, accordingly, urges this Court not interfere with the discretion of the court below in this matter, but that this Court should uphold the decision of the court below. Issues for determination It is pertinent to observe that both the appellant and the respondent have correctly pointed out, and agree, as does this Court, that payment of debts by instalments is governed Order 28 rule 62 of the Courts (High Court) (Civil Procedure) Rules, and further that Order 28 rule 62 (1) of the Rules provides that in deciding whether to make an order for payment of a debt by instalments the court shall have regard to: whether the judgment debtor is employed; the judgment debtor’s means of satisfying the judgment debt; whether the judgment debt, including any interest, shall be satisfied within a reasonable time; the necessary living expenses of the judgment debtor and the judgment debtor’s dependents; other liabilities of the judgment debtor; and any other relevant matters the Court may consider relevant. It is also pertinent to observe that both the appellant and the respondent have also most appropriately cited the case of Edil Belmonte Limited v Petraline Global Solutions Limited (supra) and agree, as does this Court, that the principles set out in that case correctly reflect the now well settled law and the approach to be adopted when dealing with applications to settle debts by instalments. It is further pertinent to observe that both the appellant and the respondent have also cited the case of Leasing and Finance Company Limited v Maltraco Limited (supra), in support of the proposition that when considering applications to pay debt by instalments, the task by the court is to balance the interests of the judgment creditor and his unfettered right to recover the debt at once, against a genuine failure or inability of the judgment debtor to settle the debt at once based upon a full factual frank and honest disclosure of the judgment debtors means; and that a prayer by a judgment debtor for payment of a debt by instalments in essence is a prayer for the court’s discretion and most importantly it is a prayer for sympathy. However, the respondent has additionally cited the cases of Birkett v James (supra), Harper v Harper (supra) and Elsom v Elsom (supra), all relating to the exercise of judicial discretion. In this regard, the respondent questions the propriety of this Court considering and possibly reversing a decision of the court below, which the respondent contends, is based on the exercise of discretionary powers by the court below, and argues and submits that this Court should not, therefore, interfere with the decision of the court below, but should uphold that decision. The principal issues to be considered and determined in this appeal, based on the arguments and submissions of the parties, therefore, revolve around, and the appeal could be conveniently determined and be disposed of, by considering and determining- (a) whether, as contended by the respondent, this appeal involves the exercise of discretion by the court below in respect of which this Court should not interfere, but should instead uphold the decision of the court below; {b) whether or not, as contended by the appellant, the court below erred in ordering payment of the debt by instalments after glaring non-disclosures of the Respondent’ s true financial position were unearthed during evidence; 13 10 15 20 25 30 35 40 45 (c) whether or not, as contended by the appellant, the court below erred in failing to consider the size of the debt and the repayment period when ordering that the instalment payments; and (d) whether or not, as contended by the appellant, the decision of the court below is against the weight of the evidence. Determination Whether this appeal involves the exercise of discretion by the court below _and this Court should not interfere with, the decision of the court below but should uphold that decision The respondent’s principal argument and submission in opposition to the appellant’s appeal against the decision of the court below appears to be that the decision of court below in this matter involves the exercise of judicial discretion and, based on the decisions in Birkett v James (supra), Harper v Harper (supra) and Elsom v Elsom (supra), the respondent questions the propriety of this Court considering and possibly reversing a decision of the court below, which the respondent contends, is based on the exercise of its discretionary powers. In this regard, the respondent specifically urges this Court not interfere with the exercise of discretion by the court below in this matter, but that this Court should instead uphold the decision of the court below. While the respondent has correctly articulated the now well settled principle that “... an appellate court should be extremely reluctant to interfere with the exercise of a discretion by a trial Judge, and that ifa Judge proceeds on a principle applicable to the facts of a case and makes a decision judicially in exercise of his discretion, an appellate court should not interfere (Harper v Harper (supra)), it is important to stress that judicial discretion must be exercised judicially and judiciously - “judicially in the sense that the decision must not be capricious and must be for a reason connected with the case and judiciously in the sense that the decision must be based on sound judgment marked by discretion, wisdom and good sense” (Edil Belmonte Limited v Petroline Global Solutions Limited (supra)). Thus, if it appears to this Court that the court below has misdirected itself in arriving at its decision, or that the decision of the court below is so wrong as to amount to an injustice, this Court would, and certainly should, review the facts upon which the decision ought to be given (Harper v Harper (supra)). It is equally important to stress that, in accordance with Order II] rule 2 of the Supreme Court of Appeal Rules, all appeals in this Court are by way of rehearing, and that entails a fresh assessment of all the evidence and material that was before the court below on issues raised by the appeal. Thus, in rehearing this appeal, this Court is entitled to look at the issues raised by the appeal, guided by the grounds of appeal. In this regard, it is equally important to stress that this Court is not impeded, and may make its own conclusions on that evidence or material, and issues, that were before the court below, and the conclusions of this Court may not necessarily be the same or coincide with those arrived at by the court below (see: Mtemadanga Distributors Limited v Electricity Supply Commission of Malawi Limited MSCA Civil Appeal No. 57 of 2017; The Sheriff of Malawi and The Attorney General v Universal Kit Supplies: Ex parte Universal Kit Supplies MSCA Civil Appeal No. 6 of 2017). If it appears to this Court that the court below had misdirected itself or that decision of the court below is so wrong as to amount to an injustice, this Court can, and certainly should, review the facts upon which the decision of the court below ought to have been given. This Court, therefore, does not find any merit in the respondent’s argument and submission that this Court should not interfere with, but should uphold, the decision of the court below, merely because the appeal involves the exercise of discretion by the court below, and this Court 14 10 15 20 25 30 35 40 45 will, accordingly, proceed to consider and determine the grounds of appeal or substantive issues raised in this appeal. Whether as contended by the appellant, the court below “erred in ordering payment of the debt by instalments after glaring non-disclosures of the Respondent's true financial position were unearthed during evidence” [paragraph (a) of the grounds of appeal] The gist of the appellant’s contention in relation to this ground of appeal is that there were “glaring non-disclosures” by the respondent regarding his true financial position which the court below did not take into account, and/or comment on, in arriving at its decision to allow the respondent to liquidate the debt herein by monthly instalments of K1,200,000. With specific reference to the respondent’s explanation regarding what he did with the MK39 million, and the allegation that the customer to whom he supplied goods had bolted from Malawi, the appellant contends that the respondent’s story “sounds fantastic” and “is so porous you can drive a coach and horses right through it’, and that the court below was wrong to conclude that it was irrelevant to comment on it through the cross examination to question its veracity. The appellant, inter-alia, contends that the purchase of goods worth over MK39 million locally entails a transaction that involves value added tax, and one would get a receipt for in respect thereof; but the respondent did not exhibit in court any receipt evidencing the purchase of such goods; that under the scheme of the Value Added Tax Act, every taxable trader is at the end of the month when filing for Value Added Tax on sales, able to claim a refund of all value added tax paid on purchases or stocks, but the respondent, who was registered for value added tax, did not insist on a value added tax receipt on the purchases worth over MK39 million; that the respondent did not exhibit in court any delivery note in relation to the goods, and this casts doubt on whether any such goods were really bought or supplied; that the respondent also did not exhibit any invoice or any value added tax invoice which is mandatory by law under the Value Added Tax Act. The appellant contends that this raises doubt on whether goods worth MK39 million were really bought or supplied. The appellant further contends that that if the goods were bought or supplied and lost, the respondent should have exhibited in the court below a tax return for the year in question showing a loss of MK39 million; that, if the customer to whom the goods were supplied had bolted, the respondent should have exhibited in the court below a police report to that effect. The appellant also contends that the court below thought it irrelevant to comment on the respondent’s explanations, through the cross examination to question the veracity of the respondent’s explanations; the appellant specifically argues and submits that the cross examination is material and relevant to question the respondent’s story because its improbability leads to a possibility that the money may not have been lost after all, but has been invested in other business ventures and that possibility becomes a probability when no evidence of purchase or delivery is tendered; and if that is the case, then the whole premise on which the application to pay debt by instalments, being loss of goods bought and supplied, collapses, and with that collapse, must follow, the application to pay debt by instalments because, then the judgment debtor would not have demonstrated an inability to pay debt. While this Court appreciates the concerns highlighted by the appellant regarding the use of the K39 milthion, and particularly the veracity of the respondent’s explanation in relation thereto during cross examination on behalf of the appellant, this Court, unlike the court below, not having had the advantage of assessing the demeanor of the respondent during cross examination, is not able to meaningfully comment on whether the respondent was truthful regarding the explanation given regarding the use of the K39 million. Furthermore, and with 15 10 15 20 25 30 35 40 45 specific reference to the appellant’s several contentions herein, this Court will certainly not enter the realm of speculation regarding what the K39 million was used for. Nevertheless, to the extent that the use of the K39 million, and particularly the veracity of the respondent’s explanation in relation thereto, was raised in the context of an application to pay the debt herein by instalments, and specifically the amount of monthly instalments that the respondent could afford to pay in order to liquidate the debt herein, it would have been appropriate for the court below to indicate whether or not, in arriving at its decision, it had taken in account the explanation of the respondent regarding the use of the K39 million, and the court below should ideally also have given the reasons therefor. As emphasized in Bazuka Michael Kalwefu Mhango v New Building Society Bank Limited MSCA Civil Appeal No. 50 of 2015 and Electricity Supply Corporation of Malawi Limited v Veronica Kaliyati and Darlington Kaliyati MSCA Civil Appeal No. 41 of 41 of 2019 the importance of the requirement for a court to give reasons for a decision or a judgment should never be over-looked. The requirement to give reasons for a decision or judgment is one of the ways of holding a judicial officer accountable for the decision or judgment. “... The duty to give reasons is a function of due process and, therefore, justice. ... Justice will not be done if it is not apparent to the parties why one has lost and the other has won. Fairness requires that the parties, especially the losing party, should be left in no doubt why they have won or lost.” (Battista v Bassano [2007] EWCA Civ 370 [28}]). The reasons for a decision or judgment of a court need not be exhaustive, but must be satisfactory. While it is not necessary to deal with every point that may have been considered in arriving at the decision or judgment, the basis of the decision or judgment must be clear. This is particularly important because it facilitates the smooth operation of our appellate process. Again, as was observed in Battista vy Bassano (supra) at [57] “4. Uf the appellate process is to work satisfactorily, the judgment must enable the appellate court to understand why the judge reached his decision. This does not mean that every factor which weighed with the judge in his appraisal of the evidence should be identified and explained. But the issues the resolution of which were vital to the judge’s conclusion should be identified and the manner in which he resolved them should be identified. It is not possible to provide a template for this process. It need not involve a lengthy judgment. It does require the judge to identify and record those 33 matters which were critical ta his decision. ...”. The court below should, therefore, have indicated whether or not, in arriving at its decision, it had taken in account the explanation of the respondent regarding the use of the K39 million, and the court below should have given the reasons therefor. With specific reference to the non-disclosure of the respondent’s real financial status, the appellant contends that the respondent only disclosed what purported to be a pay slip, and did not disclose any written contract of employment or a memorandum containing the terms of his employment; that he also did not disclose current bank statements for his business; that on inquiry by the court below he only revealed that he has an asset, a car, but did not disclose its value; that with respect to whether he was a 33% shareholder of Woolies Foods Limited, as shown in the Memorandum and Articles of Association of the company, he lied that he had been a shareholder but he was no longer a shareholder as the shares were taken away from him as he owed the company money; that when he was asked why the Register of Companies does not show this change of situation, he laid the blame on his lawyer; that shares can only change hands under the Companies Act through a share transfer form duly signed, filed and registered, 16 10 15 20 25 30 35 40 45 but none was exhibited to the court; that in reality and in fact, the respondent is still a shareholder in Woolies Foods Limited where he holds 33% shares; and that this fact was not disclosed. The appellant contends that all these facts relate to the respondent’s financial position, and his ability to liquidate the debt, and the appellant, accordingly, faults the decision of the court below in accepting the respondent’s explanation that he was just an employee with no other assets, and that all he could afford was monthly instalments of K1,200,000.00 to liquid the debt. The appellant cites the case of Leasing and Finance Company Limited v Maltraco Limited (supra), and urges this Court to set aside the order of the court below allowing the respondent to pay the debt by instalments for failure by the respondent to make a full and frank disclosure of material facts regarding his true financial position. This Court observes that to be meaningful a full factual frank and honest disclosure of the Judgment debtor’s means should ideally be voluntary; and a judgement debtor should avoid being pressed on cross-examination to disclose his financial position when such disclosure could easily have been made voluntarily. This Court notes that the respondent’s disclosure of his financial position during the hearing of the application to pay the debt herein by instalments was minimal; the respondent only voluntarily disclosed that his average monthly income of K2,037,500 (in respect of which he disclosed what purported to be a pay slip) and monthly expenses and liabilities totaling K1,060,000; and that in the circumstances the best that the respondent can offer is the settlement of the debt by monthly instalments of K1,200,000. The respondent certainly did not disclose any written contract of employment or a memorandum containing the terms of his employment; he also did not disclose current bank statements for his business; on inquiry by the court below he disclosed that he has a car, but did not disclose its value. With respect to whether he was a 33% shareholder of Woolies Foods Limited, as shown in the Memorandum and Articles of Association of the company, the respondent confirmed that he had been a shareholder but he was no longer a shareholder as the shares were taken away from him as he owed the company money, but the respondent was unable to provide a satisfactory answer why that when he was asked why the Register of Companies does not show that he was no longer a shareholder in the company. This Court is of the firm view that it can hardly be said that there was a full factual frank and honest disclosure by the respondent of his financial means and the prima facie certainly suggests that the respondent may have other assets which could be used to liquidate the debt herein. This Court also notes that in relation to the contentious issue whether the respondent still had a 33% shareholding in Woolies Foods Limited the court below did not deal with this issue properly or satisfactorily. On page | to 2 of its judgment (page 146 to 147 of the record of appeal) the court below states “Nor did the claimant contradict the defendant's assertion on his financial status, apart from an attempt to show that the defendant had some shares in a company which assertion was not proved by the claimant to the satisfaction of the court’, but the court below did not give reasons for its conclusion that the claimant had not proved “to the satisfaction of the court” that “the defendant had some shares in a company’. This Court further notes that the value of the respondent’s disclosed vehicle was not ascertained. Both these issues had a direct bearing on the issue of the respondent’s ability to liquidate the debt sooner than proposed by the respondent and ordered by the court below, and the court below does not appear to have taken this in account in arriving at its decision allowing the respondent to liquid the debt by monthly instalments of K 1,200,000. This Court further notes that, in relation to the appellant’s application for non-parties, Director Road Traffic and the Commissioner General of Malawi Revenue Authority, to produce i7 10 15 20 25 30 35 40 45 information and/or documents in their possession with respect to Woolies Foods Limited, the court below, on 1*' March, 2018, (at page 112 of the record of appeal) surprisingly ruled that “ .. the application does not disclose any steps taken by the [appellant] to show that it is not possible to prove the issue in the proceedings through a simple and inexpensive means a required under Order 17 rule 49 (2) of the Courts (High Court) (Civil Procedure) Rules, 2017”, and the court below denied the appellant’s request and dismissed the application. In this regard this Court is of the firm view that the court below did not facilitate the process of disclosure of the respondent’s true financial position. This Court also observes that it seems quite incomprehensible for the court below to have “ordered that the [respondent] pays the judgment debt in monthly instalments of K1,200,000.00 until the debt is fully repaid, or until the fappellant]can produce to [the court] evidence to show that the [respondent's] financial position has improved considerably to compel him to pay larger instalments” and at the same time deprive the appellant, as judgment creditor, the opportunity to discover evidence from non-parties to establish the “true” financial! status of the respondent, as the court below did in this matter. For the reasons stated hereinbefore, this Court is of the firm view that the order of the court below that the [respondent] pays the judgment debt in monthly instalments of K1,200,000.000 until the debt is fully repaid, or until the [appellant}can produce to [the court] evidence to show that the [respondent’s] financial position has improved considerably to compel him to pay larger instalments” was not premised on a full factual frank and honest disclosure of financial means of the respondent, and this Court sustains paragraph (a) of the grounds of appeal, namely that the court below “erred in ordering payment of the debt by instalments after glaring non-disclosures of the Respondent’s true financial position were unearthed during evidence”. Whether, as contended by the appellant, the court below “erred in failing to consider the size of the debt and the repayment period when ordering the instalment payments” [paragraph (b) of the grounds of appeal) The gist of the appellant’s first contention in relation to this ground of appeal is that the amount of the monthly instalments to liquidate the debt herein ordered by the court below is too small compared to the size of the debt, and translates into an unreasonably long repayment period; that overdraft facility of K39 million was for 7 days; that at the time of filing the writ in this matter, the debt had moved from the K39 million to over K58 million and, as of the date of the hearing of this appeal, the debt herein had moved to over K74 million; and that by its order that the debt be liquidated by monthly instalments of K1,200,000, the court below had effectively converted the 7 days’ overdraft facility into a long term facility of over 5 years, contrary to the initial intentions of the of the parties. The appellant refers specifically to the observation of the court below at page 2 of its judgment (page 147 of the record of appeal) that- “The suggestion that a repayment period is too long is probably naive, where the claimant has factored in the debt, such interest rates, charges, penalties for late payment that, in essence, takes care of the delay and protects the claimant’s interest to recover the full value of its money”. The appellant faults the reasoning of the court on the grounds that (i) there was never an intention to grant the respondent a long term facility; that, if that had been the case, the appellant would most probably have taken collateral or security; that there is, therefore, a long term unsecured exposure on the appellant’s books, something which would put it at 18 10 15 20 25 30 35 40 loggerheads with the regulator of financial services; and that having regard to the circumstances, it is grossly unjust to the appellant for the court below to order the respondent to repay the debt in such an inordinately long period by monthly instalments of K1,200,000. The appellant also cites the case of Stansfield Motors Ltd y National Bus Company Limited (supra) and contends that a court must decline an application to pay debt by instalments: (i) where the judgment debtor’s financial means are enough to enable the judgment debtor to pay immediately; (11) if it is obvious that the judgment debtor would not be able to comply with the instalment order; (iii) if the time for payment is unreasonable; (iv) if the proposed instalments would not result in a net reduction of the judgment debt because of the amount of the interest that continues to run on the judgment debt; and (v) where the judgment creditor would suffer hardship by the amount of time it would take to pay off the debt by instalments, it becomes a relevant factor in refusing to exercise the court’s discretion in favor of the applicant. The appellant further cites the case of National Bank of Malawi v Jumbe (supra) and Patrick Zachepa v Leyland DAF Malawi Limited (supra), and contends that the debt herein was a trading debt and the period ordered by the court to settle the debt was too long. The gist of the appellant’s second contention in relation to this ground of appeal is that nowhere in its judgment did the court below show that it had taken into account the appellant’s interests, as a judgment creditor, or at all, In this regard the appellant refers to the following several observations of the court below- (a) at page | of its judgment (page 146 of the record of appeal)- “The claimant reasoned that it would take it, an unreasonably long period to recover its money. The claimant asked the court to reject the defendant's offer and instead compel him to make substantial payments that would facilitate quicker liquidation of the debt. The claimant did not suggest any specific sum of money that would be reasonable under the circumstances”: (b) onpage | to 2 ofits judgment (14 page 146 to 147 of the record of appeal)- “Nor did the claimant contradict the defendant’s assertion on his financial status, apart from an attempt to show that the defendant had some shares in a company which assertion was not proved by the claimant to the satisfaction of the court”; (c} on page 2 of its judgment (page 147 of the record of appeal)- “The claimant was further concerned that the debt owed by defendant was unsecured. The claimant did not show the Court how this state of affairs affected the repayment method offered by the defendant’; (d) on page 2 of its judgment (page 147 of the record of appeal)- “any attempt to discredit his testimony was not proved to the satisfaction of the court’; and (e) on page 2 of its judgment (page 147 of the record of appeal)- “He demonstrated that his financial position is such that he cannot liquidate the judgment sum at once, From the facts, the inability of the 19 10 15 20 25 30 35 40 45 defendant to pay the judgment debt at once is genuine. The amount offered of MK1,200,000.00 which he has faithfully paid in, pending this judgement is reasonable under the circumstances’’. The appellant’s contention, as this Court understands it, is that, to the extent that the court below concentrated on the interests of the respondent, and ignored the interest of the appellant, the approach adopted by the court below was wrong, and especially so having regard to the fact that, in the course of the proceedings, the court below, for no good reason, barred the appellant, as judgment creditor, from seeking to discover evidence from non-parties Director Road Traffic and the Commissioner General of Malawi Revenue Authority, regarding the financial standing of the respondent in relation to Woolies Foods Limited; in the appellant’s own words “you cannot bar someone from accessing information and then later turn around, tell them that they have failed to discharge an (imaginary) burden of proof’. The appellant, accordingly, urges this Court to overturn the approach adopted by the court below which, it is contended “makes the economy a debtor’s paradise than a fair one for both debtor and creditor’. This Court observes and emphasizes that although “each application for payment of judgment sum by instalments, is governed by its own peculiar circumstances, in considering any such application, the interests of both the judgment debtor and judgment creditor must be taken into account” (#dil Belmonte Limited v Petroline Global Solutions Limited (supra)); when making orders for payment of debt by instalments a court must balance the interests of the judgment creditor and the judgment debtor (Kerr Controls Ltd v Yetman (supra)); that in considering any application to pay a debt by instalments, the task by the court is to balance the interests of the judgment creditor, and his unfettered right to recover the debt at once, against a genuine failure or inability ofthe judgment debtor to settle the debt at once, upon a full factual frank and honest disclosure of the judgment debtors means; and that a court ought to be more cautious and more reluctant to allow instalments in a trading debt; (Leasing and Finance Company Limited v Maltraco Limited (supra)). To the extent that, having regard to the size of the debt herein and the repayment period effectively ordered by the court below, namely, that the debt herein be repaid by monthly instalments of K1,200,000, the court below does not appear to have considered and taken into account, and balanced, the interests of both the respondent and the appellant, and further that the court below does not appear to have taken into account that the debt herein is a trading debt, this Court is of the firm view that the court below erred. Paragraph (b) of the grounds of appeal is, accordingly, sustained. Whether, as contended by the appellant. “the decision of the court below is against the weight of the evidence.” [te paragraph {(c} of the grounds of appeal} The appellant highlights the apparent complete failure by the court below to discuss and consider in its judgment: (i) the cross examination of the respondent, on behalf of the appellant, and (ii) the unchallenged evidence of Mr. Kabalawoza in opposition to the application to pay the debt herein by instalments, and the appellant faults the court below for its generalized conclusions on the evidence. In this regard it is argued and submitted that the appellant managed to show, through cross examination, the improbability of the respondent’s story on how he bought and lost goods, and that in all probability the proceeds of the overdraft facility was merely diverted and could still be available to settle the debt in full; that the appellant also managed to show that the respondent must still be a shareholder in Woolies Foods Limited, and as such, has assets, the shares, that he can liquidate to settle the debt in full; that Woolies Foods Limited being a going concern and the respondent owning 33% shares in it, the value 20 16 15 20 25 30 35 40 45 of the assets of this company would be relevant to determining the respondent’s net worth; that the court below barred the appellant from making any inquiries from third parties as to the net worth of the Woolies Food Limited and the respondent; that the appellant also demonstrated that there was non- disclosure of material facts as to disentitle the respondent to any order sought for payment of the debt by instalments; that even after the court below discovered accidentally in re-examination that the respondent failed to disclose the fact that he has a car, this did not move the court below at all to realize that there was a lot that the respondent had not disclosed regarding his financial status. With respect to the appellant’s contention “that in all probability the money was merely diverted and could still be available to settle the debt in full” this Court reiterates its view that it will certainly not enter the realm of speculation regarding what the K39 million was used for, and consequently whether the proceeds of the overdraft facility are still available to liquidate the debt herein. However, to the extent that the use of the K39 million, and particularly the veracity of the respondent’s explanation in relation thereto was raised in the context of an application to pay the debt herein by instalments, and specifically the amount of monthly instalments that the respondent could afford, the court below should have indicated whether or not, in arriving at it decision, it had taken in account the explanation of the respondent regarding the use of the K39 million, and ideally the court below should also have given the reasons therefor. With respect to the appellant’s contention that the respondent must still be a shareholder in Woolies Foods Limited, and as such, has assets - the shares, that he can liquidate to settle the debt in full; that Woolies Foods Limited, being a going concern and the respondent owning 33% shares in it, the value of the assets of this company would be relevant to determining the respondent’s net worth, this Court affirms its observation that in the contentious issue whether the respondent still had a 33% shareholding in Woolies Foods Limited the court below did not deal with the issue properly or satisfactorily; that on page 1 to 2 of its judgment (page 146 to 147 of the record of appeal) the court below states “Nor did the claimant contradict the defendant's assertion on his financial status, apart from an attempt to show that the defendant had some shares in a company which assertion was not proved by the claimant to the satisfaction of the court’, but the court below did not give reasons for its conclusion that the claimant had not proved “to the satisfaction of the court” that “the defendant had some shares in a company’. This issue had a direct bearing on the issue of the respondent’s ability to liquidate the debt sooner than proposed by the respondent and ordered by the court below, and the court below does not appear to have taken this in account in arriving at its decision allowing the respondent to liquidate the debt by monthly instalments of K1,200,000. With respect to the appellant’s contention that the court below barred the appellant from making any inquiries from third parties, Director Road Traffic and the Commissioner General of Malawi Revenue Authority, to produce information and/or documents in their possession as to the net worth of the Woolies Food Limited and the respondent, this Court reiterates its observation that, in relation to the appellant’s application for non-parties, the court below, on 1*' March, 2018, (at page 112 of the record of appeal) ruled that “... the application does not disclose any steps taken by the [appellant] to show that it is not possible to prove the issue in the proceedings through a simple an inexpensive means a required under Order 17 rule 49 (2) of the Courts (High Court} (Civil Procedure) Rules, 2017”, and the court below denied the appellant’s request and dismissed the application. In this regard this Court is of the firm view that the court below did not facilitate the process of disclosure of the respondent’s true financial position. 21 id 15 20 25 30 35 40 45 With respect to the contention that the appellant demonstrated that there was such heavy non- disclosure of material facts as to disentitle the respondent to any order sought for payment of the debt by instalments; that even after the court below discovered accidentally in re- examination that the respondent failed to disclose the fact that he has a car, this did not move the court below at all to realize that there was a lot that the respondent had not disclosed regarding his financial status, this Court wishes to reiterate its observation that to be meaningful a full factual frank and honest disclosure of the judgment debtor’s means should ideally be voluntary; a judgement debtor should avoid being pressed on cross-examination to disclose his financial position when such disclosure could easily have been made voluntarily; that the respondent’s disclosure of his financial position during the hearing of the application to pay the debt herein by instalments was minimal; that the respondent only voluntarily disclosed that his average monthly income of K2,037,500 (in respect of which he disclosed what purported to be a pay slip) and monthly expenses and liabilities totaling K 1,060,000; and that in the circumstances the best that the respondent can offer is the settlement of the debt by monthly instalments of K1,200,000.; that the respondent did not disclose any written contract of employment or a memorandum containing the terms of his employment; he also did not disclose current bank statements for his business; on inquiry by the court below he disclosed that he has a car, but did not disclose its value; with respect to whether he was a 33% shareholder of Woolies Foods Limited, as shown in the Memorandum and Articles of Association of the company, he confirmed that he had been a shareholder but he was no longer qa shareholder as the shares were taken away from him as he owed the company money, but was unable to provide a satisfactory answer why that when he was asked why the Register of Companies does not show that he was no longer a shareholder in the company. This Court is, therefore, of the firm view that it can hardly be said that there was a full factual frank and honest disclosure of financial means by the respondent, when there is ample prima facie evidence to suggest that the respondent may have other assets which could be utilized to liquid the debt herein. This Court is, therefore, of the firm view that, “the decision of the court below is against the weight of the evidence”, and paragraph (c) of the grounds of appeal is accordingly sustained. Conclusion Whether this appeal involves the exercise of discretion by the court below _and, accordingly, that this Court should not interfere with the discretion of the court below in this matter, but this Court should uphold the decision of the court below This Court does not find any merit in the respondent’s argument and submission that this appeal involves the exercise of discretion by the court below and, in respect of which this Court should not interfere, but should uphold the decision of the court below. Whether the court below erred in ordering payment of the debt by instalments after glaring non-disclosures of the Respondent's true financial position were unearthed during evidence This Court is of the firm view that the order of the court below that the [respondent] pays the judgment debt in monthly instalments of K1,200,000.00 until the debt is fully repaid, or until the [appellant}can produce to [the court] evidence to show that the [respondent’s] financial position has improved considerably to compel him to pay larger instalments” was not premised on a full factual frank and honest disclosure of financial means by the respondent, and this Court sustains paragraph (a) of the grounds of appeal, namely that the court below “erred in ordering payment of the debt by instalments afier glaring non-disclosures of the Respondent's true financial position were unearthed during evidence”. a2 10 15 20 25 30 35 40 45 Whether the court belaw erred in failing to consider the size of the debt and the repayment period when ordering the instalment payment To the extent that, having regard to the size of the debt herein and the repayment period effectively ordered by the court below, namely, that the debt herein be repaid by monthly instalments of K.1,200,000, the court below does not appear to have considered and taken into account, and balanced, the interests of both the respondent and the appellant, the court below erred. Paragraph (b) of the grounds of appeal is, accordingly, sustained. Whether the decision of the court below is against the weight of the evidence This Court is of the firm view that, “the decision of the court below is against the weight of the evidence”, and paragraph (c) of the grounds of appeal is, accordingly, sustained This appeal is, accordingly, allowed, Relie This Court has agonized over the appropriate relief to grant the appellant. This Court notes that in the notice of appeal filed on 1% June, 2018, the appellant seeks a reversal of the decision of the court below, and instead prays for an order requiring the respondent to pay the entire debt at once, or by such instalments as would lead to the liquidation of the debt within 24 months. This court also notes in the skeleton arguments filed on 8" August, 2018 in support of the appeal, the appellant prays “for an order setting aside the order of the court below and an order requiring the respondent to repay the debt at once or in a period not exceeding 12 months. As already indicated this Court is of the firm view that the order of the court below that the respondent pays the judgment debt in monthly instalments of K 1,200,000 until the debt is fully repaid, or until the appellant can produce to the court evidence to show that the respondent’s financial position has improved considerably to compel him to pay larger instalments was not premised on a full factual frank and honest disclosure of the financial means by the respondent. In this regard there has also been no full factual frank and honest disclosure of the financial means by the respondent in this Court to enable this Court to make an appropriate order of payment of the debt herein by instalments, and it would be most inappropriate for this Court to arbitrarily order the respondent to pay the entire debt herein at once, or in a period not exceeding 12 months or 24 months, as prayed by the appellant. Furthermore, if, as suggested by appellant, this Court sets aside the order of the court below, there would be no court order compelling the respondent to service the debt herein, at all. This Court is, therefore, of the firm view that, while the order of the court below that the [respondent] pays the judgment debt in monthly instalments of K1,200,000.00 until the debt is fully repaid, or until the fappellant}can produce to [the court] evidence to show that the [respondent’s] financial position has improved considerably to compel him to pay larger instalments” was not premised on a full factual frank and honest disclosure of the financial means of the respondent, it would not be appropriate for this Court to set aside that order, This Court is instead inclined to vary the order of the court below, pursuant to section 22 (1) (a) of the Supreme Court of Appeal Act, by requiring that there shall be, within thirty days of the date hereof, a determination by the court below of the true financial status of the respondent, based on a full factual frank and honest disclosure of the financial means of the respondent, to establish whether, having regard to the true financial status of the respondent, he should be ordered to liquidate the entire debt herein at once, or whether the amount of monthly instalments ordered by the court below should be increased to permit the debt herein to be 23 10 15 20 25 30 liquidated in a shorter period than that contemplated in the subsisting order of the court below, or whether he should continue to liquidate the date herein by paying monthly instalments of K1,200,000 AND IT SO ORDERED. Costs to the appellant. Pronounced in Open Court at Blantyre this 29" day of July, 2020. stonourant@ sutic EB Twea, SC JUSTICE OF APPEAL Me er Honourable usec ER: Mzikamanda, SC JUSTICE OF APPEAL hoe ai \ Reema fAls A AA f il M Ay a s ide A C Chipeta, SC APPEAL : Honourable ju JUSTICE f Justice L EChikopa, SC JUSTICE OF APPEAL a Justice F E Kapanda, so JUSTICE OF APPEAL 24 a, 2 Lf / f \ | (ura Ht - fe i i Honourable Justice Anthony Kamdng 1, SC JUSTICE OF APPEAL~~ rere seer a AS 25