AB Bank Zambia Limited v Margaret Malambo and Anor (2023/HPC/0882) [2024] ZMHC 208 (27 March 2024)

IN THE HIGH COURT FOR ZAMBIA 2023/HPC/0882 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: AB BANK ZAMBIA LIM APPLICANT AND MARGARET MALAMBO 1 ST RESPONDENT MUMBACHALI 2ND RESPONDENT Coram: Honourable Lady Justice Chilombo Bridget Maka For the Applicant: Ms. M. Chongo - In House Counsel. For the 1 stRespondent: In Person For the 2 nd Respondent: In Person JUDGMENT Legislation Referred to: 1. The High Court Rules, Chapter 27 of the Laws of Zambia. 2. The Rules of the Supreme Court of England 1999 Edition (White Book). Cases Referred to: 1. Printing and Numerical Registering Company vs. Simpson and National drugs Company Limited (1875) LR 19 EQ 462 2. National Drug Company Limited & Zambia Privatization Agency vs. Mary Katingo SCZ Appeal No. 79/2001. 3. S. Brian Musonda (Received of First Merchant Bank Zambia Limited (In Receivership) vs. Hyper Food Production and Another (1999) ZR 124. 4. Kasabi Industries vs. Intermarket Banking Corporation SCZ Appeal No. 168 of 2009. 5. Mwanza vs. Simpasa and Another (2005/HP/0500) [2011) ZMHC 65 6. Kanjala Hills Lodge Limited vs. Stanbic Bank Zambia Limited (2012) Vol. 2, 285. 1. Introduction. 1. 1. This is a mortgage action commenced by way of Originating Summons pursuant to order 30 Rule 14 of the High Court Rules. AB Bank Zambia Limited, the Applicant is a licensed Commercial Bank regulated by the Banking and Financial Services Act. The Respondents are a Zambian couple and designated as borrowers in this matter. 1.2. The Applicant's claims against the Respondents are as follows: i. Payment of the sum of ZMW44,634.63 being the outstanding balance as at 27th October, 2023 on a credit facility advanced to the 1st and 2 nd Respondents. ii. An order that Equitable Mortgage created by the 1st Respondent be enforced by an order of foreclosure, vacant possession and an unconditional conveyance of J2 Plot/Stand No. KEE/06 Kafue East situate in the Lusaka Province of Zambia in the name of Margaret Malambo, the 1st Respondent. iii. An order that instrument of assignment be executed by the Registrar of the High Court in the event of failure by the 1st Respondent to unconditionally convey title to the Applicant. iv. An order for the enforcement of the Agreements executed between the Applicant and the Respondents v. An order that the moveable assets of the Respondents be repossessed and sold to settle the loan. vi. Costs of this cause or incidental hereto. vii. Payment of interest at the agreed contractual rates. viii. Any further and/ or other relief the court may deem fit. 1.3. The summons was accompanied by _an affidavit and skeleton arguments. There was no affidavit in opposition from the Respondents. 2. The Applicant's Case 2.1. The gist of the evidence was that on 29 th November, 2022, both Respondents obtained a loan of ZMWS0,000 from the Applicant. The parties executed a Credit Contract and a Collateral Contract to cement their relationship. 2.2. The loan was secured by an equitable mortgage over Plot/Stand No. KEE/06 Kafue East, situated in Lusaka J3 Province. The 1st Respondent's occupancy licence as well as the equitable mortgage deed was shown to the Court. 2. 3 . It was averred that the loan was to be repaid in 12 monthly installments of ZMWS,863.85 inclusive of interest on a monthly rate of 5 .5%. The payment plan dated 29u, November, 2022 marked CM7 was shown to the Court. 2.4. The Applicant's gnevance 1s that the Respondents have defaulted on their loan repayment obligations and have since stopped servicing the loan. 2 .5. The Applicant has since terminated the loan and recalled all the installments by letter dated 23rd August, 2023 and exhibited as CM9. Consequently, the outstanding sum of ZMW44,634.63 and interest at contractual rate was outstanding as at 27 th October, 2023. A copy of the loan statement was shown to the Court as exhibit CMl0. 2.6 . It was averred further that Respondens' failure to repay the loan has caused the Applicant to suffer prejudice in the form of loss of use of monies obtained by the Respondents. 3. The Applicant's Skeleton Arguments 3. 1. The gist of the submissions was that the parties are bound by the contracts that they executed. The cases of Printing and Numerical Registering Company vs. Simpson and National drugs Company Limitedl 1l and J4 National Drug Company Limited & Zambia Privatization Agency vs. Mary Katingo( 2 l were cited to elucidate the principle of contract law that once parties freely and voluntarily enter into a contract, the Court is bound to enforce it. 3.2 . It was argued that the Respondents voluntarily entered into the Credit and Collateral Agreement which this Court should enforce. 3.3. As regards the enforceability of an equitable mortgage, Order 30 Rule 14 of the High Court was cited. Additionally the cases of S. Brian Musonda (Received of First Merchant Bank Zambia Limited (In Receivership) vs. Hyper Food Production and Another131 , and Kasa bi Industries vs. Intermarket Banking Corporation141 were cited as regards the remedies which are available in a mortgage action. The knell being that a mortgagee's remedies are cumulative. 3.4. As regards the order for possession of chattels, the case of Mwanza vs. Simpasa and Another151 was quoted. The gist being that the Court could order for delivery of possession of the Respondent's movable assets listed in the collateral evaluation forms and collateral contracts. 3.5. The Applicant urged the Court to grant the reliefs sought. 4. Affidavit in Opposition 4.1. The Respondents did not file any affidavit in opposition. JS 5. Hearing of the Originating Summons 5.1. At the hearing of the application, the Applicant was represented by Ms. M. Cha ngo, in House Counsel. Both Respondents were before Court and appeared in person. 5.2. On behalf of the Applicant, Ms. Chango informed the Court that she was relying on the affidavit in support and skeleton arguments . 5.3. Both Respondents confirmed that they did not file any affidavit in opposition. They both admitted the claim and that they have truly defaulted on their repayment obligations . . 6. Consideration and Determination 6.1. I have considered the Applicant's affidavit evidence and the skeleton arguments. 6.2. The Respondents have admitted the Applicant's claims against them . I therefore find as a fact that the Respondents had borrowed the sum of ZMWS0,00 0 from the Applicant on 29 th November 2022. 6. 3. The loan was secured by an equitable mortgage over Plot/Stand No. KEE/06 Kafue East, Lusaka Province. The occupancy licence exhibited as CMS shows that the property is in the name of the 1st Respondent. 6. 4. The Loan Facility was regulated by the terms and conditions stipulated in the Credit Agreement as well as the Collateral Contract. According to clause 2 of the said J6 agreement, the loan was to be repaid in 12 months and attracted monthly interest rate of 5.5%. 6.5. The Respondents have admitted being 1n default. The Applicant was therefore within its right to recall the loan and pursue the remedies available to a mortgagee. As was stated in Kanjala Hills Lodge Limited vs. Stanbic Bank Zambia Limited16l:- "When the mortgagor defaults, the mortgagee is entitled to pursue all his remedies concurrently". 6.6. Further in Kasabi Industries Limited vs. Intermarket Banking Corporation14l, the Court elucidated on the remedies available in equitable mortgages, emphasizing the right of the mortgagee to obtain a Court Order for foreclosure, thereby extinguishing the mortgagor's right of redemption. 6.7. Based on the Respondents' admission and the established facts, I am satisfied that the Applicant has proved its case on the balance of probabilities. 7. Conclusion 7.1 I enter Judgment in favour of the Applicant in the sum of ZMW44,634.63 together with contractual interest 7.2 The Respondents are ordered to pay the judgment sum within 60 days from the date hereof. J7 7. 3 In default, the Applicant shall be at liberty to foreclose and repossess the property namely Plot/ Stand No. ' KEE/ 06, Kafue East in Lusaka Province. 7.4 The 1st Respondent shall deliver vacant possession and shall further convey the mortgaged property to the Applicant unconditionally. 7.5 In default, the Registrar of the High Court shall execute the Deed of Assignment pursuant to section 14 of the High Court Act. 7. 6 The Applicant's costs occasioned by the action shall be borne by the Respondents to be taxed in default of agreement. Dated at Lusaka the 27th day of March 2024 Chilombo Bridget Maka HIGH COURT JUDGE J8