Benjamin Mwitwa and Anor v Zambia National Commercial Bank (APPEAL NO. 49/2008) [2012] ZMSC 127 (17 May 2012)

' .. , IN THE SUPREME COURT OF ZAMBIA HOLDEN AT NDOLA APPEAL NO. 49/2008 BETWEEN: BENJAMIN MWITW A NKANA EAST LODGE 1 ST APPELLANT 2ND APPPELLANT AND ZAMBIAN NATIONAL COMMERCIAL BANK RESPONDENT . CORAM: MAMBILIMA, DCJ; CHIRWA AND CHIBOMBA, JJS; On 2 nd March 2010 and 17th May 2012 For the Appellants: For the Respondent: Mr. E. NHDLOVU, of Lusa Chambers. No Appearance. MAMBILIMA, DCJ, delivered the Judgment of the court. Judgment This appeal, is against the Ruling of the High Cour( delivered .0n 22 nd January 2008, in which the Appellants' application for the Respondent to render an account on the proceeds that it received from the sale of the Appellants' property was dismissed. The facts of this case are common cause. In October 2008, the Respondent filed an Amended Originating Summons for . foreclosure, under Order 30 Rule 14 of the High Court Rules, Cap 27 of the Laws of Zambia, as read with Order 88 of the Rules of the Supreme Court (White Book), seeking to recover monies owed to it by the 2 nd Appellant, under a credit facility of KlS0,000,000.00 secured by a mortgage over Stands 7146 and 7147, situated in Nkana, Kitwe, and in default of such payment, the Respondent sought delivery of the mortgaged property and an order for sale. Judgment was entered in favour of the Respondent pursuant to e which it sold the mortgaged property at a sum of K401,590,000.00. However, in paragraph 8 of the affidavit in opposition to the Notice of Motion to Stay Execution, it was deposed on behalf of the Respondent that the mortgage debt, in addition to the ground rent arrears, amounted to K443,627,700.00 The Appellants applied for an Order that the Respondent should render an account as to how it arrived at an amount of - K443,627,700.00 as monies that were due under the judgment. The affidavit in support of the application was sworn by the 1st Appellant. He deposed, inter alia: "2. That on 7 th May 2004 the Plaintiff filed an affidavit in the Supreme to be is Court stating that K443,627,700.00, a in excess of the KlS0,000,000.00 mortgage. Now produced and marked "BNl'' is the said affidavit; judgment debt far the figure which satisfied is 3. That I am applying to the Court for an Order requiring the Plaintiff to render an account to indicate: (a) The amount of interest charged from 17th July 2003 to 25th March 2004 a period of 7 months; (b) The amount of interest charged from 25th March 2004 to 7th May 2004; (c) Indicate the amount realized from earlier seizure and sale of Defendant's property; and (d) A breakdown of any other amounts which have been added to arrive at K443,627,700.00." The application was opposed by the Respondent. An affidavit in e opposition by its Debt Recovery Manager, Evans HAPOMPWE, was filed. He deposed, among others:- "4. That I have read the Defendant's affidavit in support of rendering an account and claim for refund of K322,501,182.00 and oppose the said application on the following grounds: (a) That the Judgment sum of Kl86,651,818.91 was based on the balance outstanding as at 19th August 2002. This figure was subject to interest and had risen to the sum of K294,206,669.39 debit as at 30th of April 2004 the month when judgment was calculated. (b) That the purchase price for Stand No. 7146 and 7147 Kitwe was K401,590,000.00. The proceeds were utilized as follows: i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) Sheriffs Zambia bailiff fees Property Transfer Tax Renewal of Property Transfer Tax Commissioner of Lands - new ownership K Valuation fee Insurance Premium (renewal) Rates Bill Collection Commission Legal fees - Fraser Associates Legal fees - Jacques & Partners Recovery of outstanding account Zesco Bill K 15,515,000.00 K 12,047,700.00 K 1,204,770.00 200,000.00 K 2,256,550.00 K 1,618,750.00 K 4,000,000.00 K 29,420,700.00 K 2,350,000.00 K 750,000.00 K294,207,000.00 K 2,402,534.00 Total K366,603,004.00 5. That the Defendants' allegation of wrongful seizure in paragraph 4 to recover money owed under Cause No. 2002/HPC/429 was adequately addressed in the judgment delivered on the 8th day of May 2006 before Kitwe High Court Cause No. 2004/HPC/0211. There is now produced and shown to me marked "EH 1" a true copy of the said Judgment. In the said writ the Defendant sued for amongst other things: i) ii) K65,000,000.00 special damages in respect of wrongful seized goods. KlS,000,000.00 in respect of legal fees. Refund of all monies added to the judgment sum and an account of all monies recovered from sale of mortgaged property. The Honourable Judge in the Kitwe High Court found that the Defendants had not proved their case and their action was dismissed with costs. 6. 7. That paragraph 2, 3 and 4 of the Defendants' affidavit relate to a different Cause Number and the action is totally unrelated to the case at hand. Further there is no indication as to how wrongful the seizure was and no supporting evidence is shown such as Sheriff's return of goods seized worth over K92,000,000.00 on the 10th of July 2003. That legal costs awarded in the Cause No. 2003/HPC/0211 have not been taxed and certified and the sum of K35,586,996.00 is still being held in lieu." The learned trial Judge, 1n his Ruling, dismissed the Appellants' application after being satisfied that the Respondent 9 had given sufficient information to indicate how the sum of K401,000,000.00 was accounted for. The Appellant has now appealed to this Court against this finding by the trial Judge. In their Memorandum of Appeal, the Appellants had advanced three grounds of appeal, but on the date of hearing, they filed ' ' ' additional heads of argument in which they condensed the second and third grounds into the first ground of appeal, which is that: The learned Judge erred in law and in fact when he treated an opposing affidavit as the actual rendering account. In support of this sole ground of appeal, Mr. NDHLOVU in his written heads of argument, which he augmented with oral submissions, stated that the judgment sum that was due to the Respondent was K186,651,818.91; that this amount jumped to K294,207 ,700.00 within ten days , that is , from the date of judgment to the date of taking possession of the mortgaged property. He argued that consequently, the Respondent should not have kept the extra K107 ,555,881.00 which was over and above the judgment sum. Counsel submitted further, that the property having been sold for K401 ,590,000.00, the Respondent sent only K294,207,200 leaving another K107 ,382,300.00 unaccounted for. According to Counsel, had the rendering of an account been properly done, it could have shown an overpayment of a total sum of K214 , 938 , 181.00 to the Respondents. Mr. NDHLOVU further submitted that the affidavit 1n opposition, that was filed by the Respondents , only gave figures without producing supporting documents. He contended that the Judge should have consequently rejected the affidavit. On costs, it was Mr. NDHLOVU's submission that the Judge should not have accepted paragraph 7 of the affidavit in opposition. In the said paragraph, it was deposed on behalf of the Respondent that the legal costs in Cause No. 2003/HPC/0211 have not been taxed and that an amount of K35,586,996.00 is being held in lieu. 9 He stated that contrary to the contention by the Respondent, the Judge was aware that the Respondent had in fact already taxed its costs and the said costs had already been recovered through execution. That the Respondent should not therefore have been allowed to withhold K35,536,996.00. It is the position of Counsel on the whole , that had the Judge properly directed himself as to the matters required in rendering of an account, he would have found 9 that the Respondent in fact failed to render a proper account. Although the Respondent did not appear on the date . of hearing, submissions were filed 1n support of its case. The said submissions had addressed all grounds as raised 1n the Memorandum of Appeal. With regard to the ground that was argued by the Appellants before us, it is the submission of the ' • • , , I Respondent that the application to render an account was made pursuant to Order 43 Rule 2, of the White Book, which provides that a Court may upon application, direct any necessary account or inquiries to be made. The rule further empowers the Court to give any directions on a matter in which an account is to be taken or the inquiry to be made. Arising from the provisions of Order 43 , it is the argument of the Respondent, that the law gives a Court, 9 discretionary powers on how an account is to be done and this includes the power not to or to render an account as the Court may decide. The Respondent has argued that in this case, the Court did not find it necessary on the facts and evidence that were before it, to order the rendering of an account because it was satisfied that the Respondent had given sufficient information to indicate how the amount of K401,000,000.00, realised from the sale of the e mortgaged property, was utilized. It is further stated that there were expenses that were reasonably incurred, on which the Respondent rightly utilized the proceeds of the sale from the mortgaged property. The Respondent further submitted that a verifying affidavit was filed on 28 th May 2004, before the sale of the mortgaged •, . property which showed how the interest on the Appellants' account was applied during the periods requested by the Appellants and the anticipated costs. The said affidavit states in paragraphs 4, 5 and 6: "4. That the debt of K250,987,292.26 DR transferred to Head Office, on account of the 1st Defendant, from our Kitwe Business Centre had already outstripped the mortgage sum of KlS0,000,000.00 and it, therefore, follows that our claim of K294,207,000.00 as at 24th April 2004 is justifiable as the debt continued to attract interest charges indicated hereunder:- (i) (ii) Interest charged for the period 17 /07 /03 to 25/03/04 amounted to K43,219,377.13 Interest charged for the period 26/03/04 to 07 /05/04 amounted to Kl4,091,425.61 5. That the repossessed property has not yet been sold but has been listed for advertising at a reserve price of K375.0 million as per latest Valuation Report. There is now produced and shown to me, exhibited herewith and marked "EHl" a true copy of the Valuation Report. 6. That the figure of K443,627, 700.00 is broken down as follows: (i) Balance on account K 294,207,000.00 (ii) Ground rates arrears as advised in Valuation Report K 120,000,000.00 (iii) Commission to lawyers at 10% of total sum owed K 29,420,700.00 K443,627, 700.00" It was further submitted on behalf of the Respondent that there was no affidavit filed by the Appellants to challenge the contents of the Respondent's verifying affidavit on the manner 1n ' ' which the proceeds were accounted for. It has been argued that the Appellants were at liberty, by virtue of Order 43 Rule 3 of the White Book to raise objections to any issues stated in the verifying affidavit but they decided not to respond. On the contention that there were no receipts to support the figures listed in the affidavit 1n opposition, the Respondent submitted that this was never an issue at the hearing of the 9 application. That the Appellants had an opportunity to raise this issue in the court below but elected to remain silent. That in law, issues which were not a subject of proceedings in the lower court cannot be raised on appeal. According to the Respondents, the Judge was on firm ground when he dismissed the Appellants ' application for the Respondent to render an account because there was no need to do so as the affidavit evidence before the Court was 9 sufficient. We have considered the Ruling of the Court below, the ground of appeal and the submission of Counsel. It is common cause that Summons were filed in the Court below, seeking an Order that the Respondent renders an account as to how it arrived at the amount of K443,700,000.00 as the money owing under the judgment. The ' . said Summons were taken out under Order 43 Rule 2 of the Rules of the Supreme Court (White Book). This Rule stipulates:- "2-(1) The Court may, on an application made by summons at any stage of the proceedings in a case or matter, direct any necessary accounts or inquiries to be taken or made." The Court, in its Ruling of 22nd January dismissed the Appellants' application. The Judge found that there was no need to ask the Respondent to render an account. He was satisfied that the Respondent had 'given sufficient information' to indicate how the sum of K410,000,000.00 was accounted for. The said information was contained in the affidavits that were before Court. Having rejected the application, it cannot now be said that the Court treated the opposing affidavit as the rendering of an account. No case was made to persuade the Judge to order the Respondent to render an account. On this premise therefore, the ground of appeal in this case was not properly formulated. It is anchored on the assumption that the Court had found that the Respondent rendered an account through the affidavit in opposition. The question should be whether the Court below was on firm ground to have rejected the application. In other words, was there sufficient ground to order the Respondent to render an account? • I The hearing of the application in the Court below was on 21 st January 2008. The record shows that at the said hearing, the learned Counsel for the Appellants requested the Court to confine itself to two items; interest that was deducted from the purchase price and costs. Before us, the learned Counsel for the Appellant has argued that the judgment sum rose from K186,651,818.91 to 9 K294,207,700.00 within ten days of the judgment. In our view this argument is flawed. It is oblivious to the fact that the amount of the debt in this case was not static. The case was filed in October 2003 and judgment was entered in March 2004. As explained by the Respondent, interest continued to accrue so that the amount claimed continued to accumulate. In fact, the terms of the loan facility stated that, "interest on the Medium Term Loan is 9 calculated daily and charged monthly to your current account at the prevailing Bank's base rate currently at 46% per annum." The verifying affidavit explained how the interest accrued. The Appellant did not file any affidavit in reply to counter the Respondent's averments in the affidavit in opposition. The said averments therefore remained unchallenged. On costs, the record shows , on page 8 of the Motion filed on 10 th July 2006, that they were taxed by the Master at K42 ,957 ,394.37. These costs related to expenses of the litigation. According to Counsel, the Appellant challenged the taxed amount and applied for review. The Respondent held an amount of K35,586,996.00 in lieu. This amount is less than the K42,957,994 initially taxed by the Master. Again, there was no affidavit in reply e to state whether this amount had been paid or taken into account. From what was before the lower court, these costs , taken together with the summary in paragraph 4 of the affidavit in opposition add up to more than the sell price of the property. The affidavit in opposition gave a clear picture of how the monies received from the sale of the properties were applied. We cannot therefore fault the trial Judge for concluding that sufficient information had been tt given to show how the K401,000,000.00 was accounted for. On the argument that no receipts were produced to justify the amounts stated in the affidavits , we agree with the Respondent's submission that this was not an issue in the Court below. There is nowhere in the proceedings of the Court below that the Appellants requested for receipts in respect of the said expenditure. The matter cannot now be raised on appeal. From the foregoing, we find that the Judge in the court below properly exercised his discretion to refuse the application to compel the Respondent to render an account. We find no merit in the appeal. It is dismissed. Costs will be for the Respondent to be taxed in default of agreement. I. C. Mambilima DEPUTY CHIEF JUSTICE it. D. K. Chirwa SUPREME COURT JUDGE H. Chibomba SUPREME COURT JUDGE 13