Alfbeth Limited And Ors v Development Bank Of Zambia (In Possession) (APPEAL No. 69 /2024) [2025] ZMCA 31 (25 February 2025)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT LUSAKA (Civil Jurisdiction) APPEAL No. 69 /2024 BETWEEN: ,,, r J - ' - _ .. :. ' ... • , . ;~- ALF BETH LIMITED :E~DGAR KAYANGHE LAMB E! ·~.r / -~ MIRRIAM LUPIYA MELIGAR FARMS LIMITED ~~ : : . :~ ~~~ ':, 1_"s~ {\PPELLANT l.~~l: 5 FEB 2025 ·2~1? PPELLANT '~·~ PPELLANT ... 4 _TH PPELLANT - - - rr°G1s ~t -- - ' . l'c., . ).; 3'11.,",7 .,.., - f' ::, ll ~ / .... " " / . AND DEVELOPMENT BANK OF ZAMBIA (In Possession) RESPONDENT CORAM: SIAVWAPA JP, CHISHIMBA AND PATEL JJA On 18th and 25th February, 2025 FOR THE APPELLANTS: MRS. H. C. MUSA OF MESSRS MILNER AND PAUL LEGAL PRACTITIONERS Ji'OR THE RESPONDENT:MRS. M. M. MUKONDE IN-HOUSE COUNSEL JUDGMENT SIAVWAPA, JP delivered the Judgment of the Court Cases Referred to: 1. William Masauso Zulu v Avondale Housing Project Limited (1982) ZR 173 2. Mulenga & others v Investrust Merchant bank limited (1999) ZR 104 Legislation Referred to: 1. High Court Rules pursuant to the High Court Act Chapter 27 of the Laws of Zambia 2. Rules of the Supreme Court (1999) edition 1.0 INTRODUCTION l . 1 The appeal is against the Ruling delivered by the Honourable Mrs. Justice B. G. Shonga, on 20th June 2023, in the Commercial Division of the High Court. l .2 By the said Ruling, the learned Judge declined to grant the Appellant an application to liquidate the Judgment debt in instalments. 2 .0 BACKGROUND 2 .1 The 1s t Appellant obtained from the Respondent, three loan facilities evidenced by facility letters executed between the parties between 2013 and 2016. 2 .2 The loans were secured by legal mortgages, third party legal mortgages , fixed and floating charges, share holder guarantees, further charges and second further charges . 2 . 3 The 1st Appellant defaulted on the facilities as a result of which the Respondent sent demand letters for payment of all the outstanding balances in 2017. J2 2 .4 Consequent upon the Appellant's failure to respond to the three demand letters, the Respondent commenced an action in the High Court, Commercial Division, by Originating Summons with an affidavit in support. 2 .5 In the Originating Summons dated 26th December 2017, the Respondent sought the usual mortgage-based reliefs pursuant to Order XXX rule 14 of the High Court Rules. 2.6 On 26th April 2021, the Honourable, Mr. Justice William S. Mweemba delivered Judgment granting all the reliefs sought by the Respondent. 2 . 7 Following the Judgment stated in paragraph 2.6 above , about a year later, on 22nd May 2022 , the parties were engaged in a meeting at which they discussed how the Appellants could best pay back the loans. 2 .8 This is according to the letter dated 31 st May 2022, appearing at page 260 of the Record of Appeal. On 11 th July 2022, the Respondent wrote a letter to the 1st Appellant in which it referred to a meeting between the parties held on 22 nd June 2022, at the Respondent's offices. 2 .10 In that letter, the Respondent expressed gratitude to the Appellants and appreciated the parties' desire to find an amicable way to settling the loan facility. The letter ended by stating that the Respondent eagerly awaited the Appellant's proposal on how it planned to settle the outstanding balance. The letter is at page 298 of the Record of Appeal. J3 2.11 In a letter, apparently replying to the letter referred to in the immediate preceding paragraph, the Appellants rendered their proposal for settlement. 2.12 In that letter, which appears at page 267 of the Record of Appeal, the Appellants make proposals requiring the Respondent to carry out order financing works with mines and other organisations. 2 .13 The proposal seemingly required the Respondent to finance some works with Mopani after which the Appellant would get paid and in turn pay the Respondent. The letter in issue is dated 25th July, 2022. 3 .0 ENFORCEMENT OF JUDGMENT 3 .1 In April 2023, the Respondent issued a Praecipe Writ of Possession against the Appellant for the recovery of the Judgment sum and for possession and sale of the security properties. 3 .2 Consequent to the above, the Respondent foreclosed on the security assets of the 1st Appellant on 21st April 2023. The Appellants, in turn, wrote to the Respondent on 24th April 2023 , protesting the possession of the Assets. They further alleged that some of the seized properties belonged to the 1st Appellant's clients. 3 .3 On 2 nd May 2023, the Respondent r eplied to the Appellants with reference to the Court Judgment of 26th April 2021 , that gave the Appellants sixty days within which to pay the J4 Judgment sum, failure to which the Respondent would be at liberty to foreclose and sell the properties. 3 .4 The Respondent went further to ask the Appellants to show proof of adverse ownership of specific property for onward transfer to the owners. 3 .5 Having failed to pay the debt outstanding to avert further execution on the security properties, the Appellants made an application to liquidate the Judgment sum 1n instalments and to stay further execution and sale of mortgaged properties. 3 .6 The learned Judge, Mrs. Justice B. G. Shonga, heard the application on 20th June 2023, and refused to grant the application to liquidate the Judgment debt in instalments. She further vacated the order of stay of execution she had granted ex-parte. 3 . 7 The learned Judge also refused to grant the Appellants ' application for leave to appeal and to stay further execution. 3 .8 The Appellants renewed their applications which were heard by a single Judge of the Court. The single Judge granted both applications by Ruling dated 17t h October 2023. 4 .0 THE APPEAL 4 .1 Following the leave granted on 17th October 2023, the Appellants filed the Notice and Memorandum of Appeal on 15th November 2023. JS 4 .2 The Memorandum of Appeal contains two grounds of appeal as follow; 1. The lower court erred in law and fact in holding that the Respondent's application did not disclose the income, assets and liabilities when the application for instalments was made pursuant to the High Court Rules. 2. The lower court erred in law and fact when it declined to consider the agreement between the parties to settle the judgment sum in instalments. S. O ARGUMENTS IN SUPPORT 5. 1 The Appellants filed their collective heads of argument on 18th March 2024. Although they have argued the two grounds separately, in essence, they are asking us to interfere with the lower Court's finding of fact. 5.2 The Appellants argue that contrary to the learned Judge's position that the Appellants had not disclosed the income, assets and liabilities, paragraphs 15 and 16 of their affidavit in support of the application to liquidate Judgment sum in instalments did so. 5 . 3 They also argued that Order XXXVI rule 9 of the High Court Rules, pursuant to which they made the application, allows the order for payment by instalments on sufficient reasons. In their view, the evidence in paragraphs 15 and 16 of the affidavit in support, constituted sufficient reason. J6 5 .3 In relation to ground two, in addition to the arguments above, the Appellants argue that the learned Judge had no justification to disregard the parties' agreed position to liquidate the debt in instalments. 5 .4 This argument is based on the letters exchanged between the parties and the meetings held between 4 th May 2021, and 11 th July 2022. S. 5 The letters and meetings ref erred to in paragraph 5. 5 above related to the Appellants' proposing and the parties' possible agreement to a payment plan. 5 .6 According to the Appellants, the sum total of the letters and the meetings, was an agreement to liquidate the Judgment debt in instalments. 6 .0 ARGUMENTS IN OPPOSITION 6 .1 The Respondent filed its heads of argument on 25th April 2024, in which it disputes the Appellants ' arguments. 6 .2 The Respondent finds no fault in the learned Judge's finding that the Appellants did not submit a statement of income and expenditure to justify an order to liquidate the debt in instalments. 6 .3 The thrust of its argument, on the issue, is that what the Appellants demonstrate in their affidavit in support of the application was their expected sources of income through purchase orders. J7 6 .4 It submitted that the learned Judge duly considered Order XXXVI rule 9 of the High Court Rules but found that the reason advanced by the Appellants was insufficient. 6 .5 On the criticism of the learned Judge, that she should not h ave resorted to Order 4 7 of the White Book 1999 edition that the Applicant should demonstrate special circumstances, the Respondent argued that the learned Judge did not refer to the Order, but that even so there are precedents that speak to special circumstances. 6.6 In dismissing the Appellant's arguments in the 2 nd ground, the Respondent argues that the letters passing between the parties do not evidence an agreement by the parties for the Appellants to liquidate the Judgment debt in instalments. 6.7 According to the Respondent, the two letters reveal the Respondent's willingness to meet the Appellants with a view to agreeing on a payment plan. 6.8 Finally, that in the letter of 22nd June 2022, the Respondent indicated that it was still waiting for a proposal on the payment plan as agreed in the meeting. 7 .0 At the hearing of the appeal, both counsel indicated that they would rely fully on the documents filed into Court. 8.0 ANALYSIS AND OPINION 8 .1 We state at the outset that our impression is that the two grounds of appeal are closely related in that they both assail the learned Judge's evaluation of the evidence before h er. J8 8 .2 The Appellants are of the view that the learned Judge made her findings of fact on an improper view of the evidence before her. 8.3 The above view is based on the case of William Masautso Zulu v. Avondale Housing Project Limited1. This case, in essence, cautions appellate Courts against reversing findings of fact by trial Courts, unless the findings are perverse, not backed by evidence or made on an improper view of the evidence. 8 .4 In this case, the Appellants' bone of contention is that whereas they showed, in their affidavit in support of the application to settle the Judgment debt in instalments their sources of income, the learned Judge held that they had not exhibited their income, assets and liabilities. 8 .5 From the arguments advanced by the Appellants, two questions arise namely, whether it is a requirement for the Applicant to file a declaration of income, assets and liabilities under Order XXXVI rule 9 of the High Court Rules and, if the Appellant provided sufficient reason for the grant of an order to liquidate the debt in instalments. 8 .6 Order XXXVI rule 9 of the High Court Rules Chapter 27 of the Laws of Zambia provides as follows; "Where any judgment or order directs the payment of money, the court or a judge may, for any sufficient reason, order that the amount shall be paid by instalments, with or without interest. The order may be made at the time of giving judgment, or at any time J9 afterwards, and may be rescinded or varied upon sufficient cause, at any time. The order shall state that, upon failure to any instalment, the whole amount remining unpaid shall forthwith become due." 8 . 7 The starting point, on the reading of the rule, is that the power vested in the Court or Judge to order instalment payment, is discretionary. The second point is that the Court will exercise the power for sufficient reason. 8.8 It follows therefore, that what constitutes sufficient reason, depends on the Court's assessment of the evidence or explanation given by the applicant Judgment debtor. 8. 9 However, 1n such applications, the applicant must demonstrate that they have sources of income from which it is possible to liquidate the debt as proposed. 8. 10 This invariably requires that the applicant provides a declaration of his income, assets and liabilities. It is upon this declaration that the Court will determine whether or not the Applicant has provided sufficient reason to grant the order to liquidate the debt in instalments. 8.11 This however, does not preclude the Court from basing its decision on other reasons it may consider sufficient under Order XXXVI rule 9 . 8.12 In this appeal, it is not in dispute that the Appellants did not file a statement of income, assets and liabilities or income and expenditure as held by the learned Judge below. JlO 8 . 13 This means that the learned Judge had the liberty to consider whether the Applicants had presented any other facts that could constitute sufficient reason. The learned Judge concluded that there was none. 8 . 14 We have equally considered the affidavit 1n support of summons for an order to liquidate Judgment sum 1n instalments at page 233 of the Record of Appeal. 8 . 15 The deponent to the affidavit states that upon failing to pay the Judgment sum within sixty days as ordered in the Judgment, h e engaged the Respondent requesting that it breaks down the Judgment debt to enable the Judgment debtor liquidate it in instalments. 8 .16 The Appellants also made other proposals to the Respondent including the release of its seized assets which would help them generate funds to apply to the liquidation of the debt in instalments. 8 .1 7 The Appellants also disclosed that they had purchase orders from Mopani Copper Mines Plc, which would provide some of the income to apply towards settlement of the Judgment debt. 8 . 18 In the view of the learned Judge, the evidence stated in the affidavit did not amount to sufficient reason against the backdrop of the lengthy of time it took the Appellants to apply for the relief to pay in instalments since the delivery of the Judgment. Jll 8 . 19 We find no reason to disagree with the finding on assessment of the evidence by the learned Judge. 8 .20 It is clear that the Appellants relied on purchase orders whose payment could not be ascertained. 8 .2 1 Further, the total value of the five purchase orders, was far less than the total Judgment debt. In addition, the said purchase orders represented the value of services already provided without any indication of whether the contracts were ongoing to provide a sustainable source of income. 8 .22 We also accept the views expressed by the learned Judge to the effect that given the more than two-year period between the delivery of the Judgment and the application for the relief, it would be unfair to continue to k eep the Respondent out of the funds due to it. 8 .23 The actions of the Appellants are intended to defeat the established position of the law that a successful party should be denied immediate enjoyment of a Judgment only on good and sufficient grounds. The case of Mulenga and Others v. Investrust Merchant Bank Ltd2 refers. 8 .24 It is now close to two years since the Judgment that granted the remedies in the mortgage action to the Respondent was delivered. 8.25 As a secured creditor, the Respondent is entitled to recover the debt through the various securities provided among which is the seizure and sale of the mortgaged properties. J12 8.26 The Respondent can therefore , no longer be deprived of the enjoyment of the fruits of the Judgment. 9.0 CONCLUSION 9. 1 For the reasons stated in the preceding paragraphs, we find no merit in the appeal. We dismiss it accordingly with costs. M. J. SIAVWAPA JUDGE PRESIDENT F. M . CHISHIMBA COURT OF APPEAL JUDGE A. N. PATEL SC COURT OF APPEAL JUDGE J13