Konkola Copper Mines Plc (In Liquidation) v Milingo Lungu and Lungu Simwanza & Company (A Firm) (Appeal No. 70/2023) [2024] ZMCA 82 (9 February 2024)

! IN THE COURT OF APPEAL OF Z HOLDEN AT LUSAKA (Civil Jurisdiction) --IA'. eal No. 70/2023 BETWEEN: KONKOLA COPPER MINES PLC (In Liquidation) -- APPELLANT AND MILINGO LUNGU 1 ST RESPONDENT LUNGU SIMWANZA & Company (A Firm) 2 N D RESPONDENT CORAM : Siavwapa JP, Chishimba, and Makungu JJA On 16th January, 2024 and 9 t h February, 2024 For the Appellant : Mr. M Mileji and Mr. C. M. Sianoondo of Messrs. Malambo & Co. & Mr. Y. Yosa of Messrs May & Company For the 1 st Respondent : Mr. S. Sikota (S. C) & Mr. K. A Rumsey of Messrs. Central Chambers Mr. J . Zimba of Messrs. Makebi Zulu Advcocates For the 1st & 2 nd Respondent : Mr. N. Tembo of Messrs. Tembo Ngulube & CHISHIMBA JA, delivered t h e judgm ent of th e Court. CASES REFERRED TO: 1) Dr. Chitalu Gonzo Lumbwe v University of Zambia ( 1988) ZR 229 2) Milford Maambo & Others v The People Selected Judgment No. 3 1 of 3) Aristogerasimos Vangelatos v Demetre Vangelatos, Metro Investments Limited & King Quality Meat Products Limited (2007) ZR 74 4) Zambia Revenue Auth ority v Mwanza & Other s (2010) 2 ZR 181 J.2 5) Attorney General v Marcus Kampumba Achiume ( 1983) ZR 1 6) Avalon Motors Limited (In Receivership) v Bernard Leigh Gadsden Motor City Limited ( 1998) ZR 41 at 43 7) Patel v Mirza (2016) UKSC 42 8) Scott v Brown, Doering, Mcnab & Co. (3) (1892) 2 QB 724 9) Kenya Airways Limited v Satwant Singh Flora (2013) eKLR (Civil Appeal No. 54 of 2005) 10) Amon v Raphael Tuck & Sons Limited (1956) 1 All ER 274 11) The Attorney General v Aboubaker Tall (1995 - 1997) ZR 54 12) Fred M'membe & The Post Newspapers Limited v Abel Mboozi & Others SCZ Appeal No. 7 of 2021 13) Mike Hamusonde Mweemba v Kamfwa Obote Kasongo & Zambia State Insurance Corporation Limited (Intended Joinder) (2006) Z. R. 101 LEGISLATION CITED: 1) Corporate Insolvency Act No. 9 of 2017 2) Corpora te Insolvency (Forms and Fees) S. I. No. 41 of 2019 1.0 INTRODUCTION 1.1 This is an appeal against the ruling of the Hon. Mr. Justice E. L. Musona dated 27th January, 2023. It arose from a notice of motion for determination of preliminary questions on points of law raised by the 1 st respondent. The learned Judge upheld the 1 st respondent's preliminary application and held that there being a pending case under Cause No. 2019/HP/0455, the issues in this case can be determined in the existing case. 1.2 The lower Court further found that the appellant is not a competent party to commence these proceedings and dismissed the action for being incompetently before the Court. 2.0 BACKGROUND J.3 2.1 On 21 st May, 2019, the High Court appointed the 1s t respondent to be t h e provisional liquidator of the appellant company. Within the same month, a remuneration agreement was executed between the Administrator General and Official Receiver of the one part, and the 1 st respondent of the second part. The remuneration agr eement was later varied by an addendum. 2 .2 The app ellant alleged that the remuneration agreement and addendum thereto are tainted with illegality. Further, that contrary to the provisions of the Corporate Insolvency Act No. 9 of 2017 (the CIA) and the Corporate Insolvency (Forms and Fees) S. I. No. 41 of 2019, the 1st respondent illegally drew monies amounting to US$81, 132, 71 1.00 from the appellant in breach of his duties. Of that amount, US$29 , 154, 319.44 was paid to the 2 nd respondent as legal fees wh en no services were rendered to the appellant company. 2.3 For this reason, on 29th July, 2022, the appellant commenced an action by way of writ of summons against the respondents seeking several relief s inter alia a declaration that the remuneration agreement and addendum to the remuneration J.4 agreement are null and void for illegality; the sum of US$59, 336, 903.00 drawn by the 1 st respondent from the appellant's accounts; an order for an account of all the monies belonging to the appellant which came into the hands of the 1st respondent as provisional liquidator; payment of any sums found due to the appellant; and damages. 2.4 Before the matter could be heard, the 1 st respondent moved the Court below by way of notice of motion for the determination of preliminary questions or points of law pursuant to Order 14A rule 1 of the Rules of the Supreme Court of England, 1999. The 1st respondent sought the determination of the following questions: 1) Whether this action as commenced is properly or competently before this honourable Court? 2) Whether the appellant is a competent party to commence these proceedings? 3) Whether a fresh action may be commenced against the 1 st respondent for alleged acts and/or omissions arising out of the performance of his functions as Provisional Liquidator of the appellant? 4) Whether the appellant can commence fresh proceedings in respect of matters and issues that are currently pending before other Courts? 5) Whether the statement of claim discloses a reasonable cause of action for the declaration of the remuneration agreement as null and void for illegality; J.5 6) Whether a cause of action can be based on an allegation of illegality? and 7) In the alternative, whether the cause of action or claims for an account, reimbursement and a claim for alleged breach of duty herein have accrued? 3.0 AFFIDAVIT EVIDENCE 3.1 In his affidavit in support of the notice of motion, the 1st respondent, Milingo Lungu, deposed that there 1s no reasonable cause of action for the claim for restitution of the sum of $58 million on the grounds of illegality and that any person aggrieved by the exercise of his power or function as Provisional Liquidator ought to have applied to the Court hearing the winding-up proceedings to modify, revert or confirm any decision made by himself. 3 .2 He stated that following his appointment as Provisional Liquidator, he executed a remuneration agreement and addendum thereto with the Official Receiver and that the appellant is not privy to the said remuneration agreement. Both the law and the order appointing him as Provisional Liquidator of the appellant gave him express power to sell any asset of the appellant and enter into compromises in settlement of any disputes involving the appellant. That all the issues being raised by the appellant in this matter are issues J.6 which, if at all, are d d eterm1na e un er Cause No. . bl 2019/HP/0455, the winding-up action. 3.3 Milingo Lungu further deposed that by consent settlement agreement dated 17th March, 2022, entered into between the 1st respondent and the Official Receiver, the parties agreed to a reconciliation of account and appointment of independent auditors to audit the appellant's books of account during the tenure of the 1 st respondent as Provisional Liquidator of the appellant. Thereafter the accounts were to be filed before the Court hearing the winding-up petition for consideration. However, no such accounts have been agreed between the Official Receiver and the 1 st respondent. 3 .4 The deponent further stated that no application has been filed in to Court for his release as Provisional Liquidator by the appellant. No reconciliation of accounts has been done between himself and the Official Receiver, and that no reconciled statements of account have been filed into Court in relation to his tenure as Provisional Liquidator of the appellant to warrant this action and the claim herein. 3.5 He concluded by deposing that no order of Court within the winding-up proceedings has been issued to appoint and J.7 consequently authorise any of the actions of the Official Receiver to give instructions for the commencement of this action or indeed to carry out any of the functions as Provisional Liquidator of the appellant. Prior to the commencement of the action, the 1 st respondent was not served with a letter of demand in respect of any or all of the claims forming subject of this action. 3. 6 Celine Meena Nair, the Official Receiver and Liquidator of the appellant filed an affidavit in opposition to the notice of motion to raise preliminary issues on points of law. She deposed that the cause of action in this matter is anchored on section 70 (5) and (6) of the CIA. 3. 7 That the action has been commenced to recover monies illegally paid to the 1 st respondent and to redress the 1 st respondent's misfeasance and breach of fiduciary duties to the appellant company, and not to reverse the decisions or acts of the 1 st respondent. She stated that the Court has the requisite jurisdiction to determine the matter notwithstanding the proceedings under Cause No. 2019/HP/0499 which proceedings are currently stayed pending arbitration. J.8 3.8 That there is no mandatory requirement to raise the issues raised herein in the winding-up proceedings, which in any event, have been stayed by order of this Court under Appeal No. 181 of 2019 dated 20th November, 2020. That the issues raised herein are triable issues which can only be determined after a trial of this action by the Court. 3.9 Notwithstanding the terms of the purported consent settlement agreement, the 1 st respondent has a statutory duty to render an account of all receipts and payments, and provide a statement of the company's position at the winding-up upon ceasing to be liquidator. That of his own volition, the 1 st respondent has neglected and/ or refused to comply with his statutory duty to render an account despite being requested to do so, and as a result neglected, omitted and/ or refused to apply for an order for release as Provisional Liquidator. 3.10 Ms. Nair stated that her assumption of the office of Provisional Liquidator by virtue of being the Official Receiver, is by operation of law owing to the fact that the vacancy in the office of Provisional Liquidator was not filled by the Court. That at the time that the 1st respondent resigned as Provisional J.9 Liquidator, the winding-up proceedings had been stayed by this Court. 3. 11 The deponent further stated that there are currently no proceedings before any Court touching the entry into a consent order by the 1st respondent and Mimbula Resources Limited and Moxico Resources Limited as this Court, in a judgment dated 3 r d August, 2022 under Appeal No. 128 of 2021, upheld the dismissal of the action challenging the same by Vedanta Resources Holdings Limited. 3. 12 A letter of d emand was served on the 1 st respondent's advocates, Messrs. Lusenga Mulongoti Advocates. The letter of demand was filed before Court on 29th July, 2022. 4.0 DECISION OF THE COURT BELOW 4 . 1 The Learned Judge considered the notice of motion to raise preliminary questions on points of law. He considered the writ of summons and statement of claim in light of section 117 of the CIA which gives any person aggrieved with any act or omission of a liquidator the right to apply to t h e Court hearing the winding-up proceedings for an order to modify, reverse or confirm the act done or omission made. 4.2 The lower Court found that the appellant is aggrieved by J.10 certain acts, om1ss10ns or decisions made by the 1 st respondent in the execution of his duties as Provisional Liquidator and that there is a pending case under Cause No. 2019 /HP/ 0455 wherein the issues or claims raised herein can be determined. The Learned Judge further found that the appellant, who is under liquidation, is not a competent party to commence these proceedings, and that it is wrongful to commence a fresh action against the 1 st respondent for the alleged acts and omissions currently pending before another Court. 4.3 The Court below was not satisfied that the statement of claim discloses a reasonable cause of action for the declaration of the remuneration agreement as null and void for illegality, and that it was not sufficient to base a cause of action on illegality per se. The lower Court further reasoned that the claim against the 2nd respondent can also be determined under Cause No. 2019/HP/0455 without the involvement of the 2 nd respondent who was not privy to the liquidation process. J.11 4 . 4 All the preliminary issues raised by the 1 st r esp ondent h aving succeeded, the Court below found that the action 1s incompetent and dismissed it with costs to the r espondents. 5.0 GROUNDS OF APPEAL 5 . 1 Being dissatisfied with the d ecision, the appellant a ppealed advancing seven gr ounds couched as follows: 1) The Court below erred in law and in fact when it held that the claim for a declaration that the remuneration agreement and addendum to the remuneration agreement are null and void for illegality can be determined in the winding-up petition under Cause No. 2019/HP/0455 (sic) by way of confirming or reversing the remuneration agreement; 2) The Court below erred in law and in fact when it held that the cause of action for an account for reimbursement and the alleged claim for breach of duty by the first respondent are all matters that can be determined in the winding-up petition under Cause No. 2019/HP/0455 (sic) in the absence of supporting provisions in the Corporate Insolvency Act No. 9 of 2017 that the said issues can only be determined in the winding-up proceedings; The Court below erred in law and in fact when it held that the issues raised by the appellant herein are all matters that can be determined in the winding-up petition under Cause No. 2019/HP/0455 (sic) and thereby interfering with and contradicting the decision of a Madam Justice A. M. Banda Bobo, a Court of equal jurisdiction, dated 7f:h May, 2021 under Cause No. 2019/HP/0761 in which she rules that she had no jurisdiction to determine the said issues in the face of J.12 the stay of proceedings and referral of the matter to arbitration by the Court of Appeal; 3) The Court below erred in law and in fact when it held that it was wrongful for the appellant to commence a fresh action against the 1 st respondent for alleged acts and omissions arising out of the performance of his functions as Provisional Liquidator for the appellant company particularly that these issues are currently pending before another Court in the face of uncontroverted evidence that the said issues were in fact not pending before any other Court; 4) The Court below erred in law and in fact when it held that the appellant (under liquidation) was not competent to commence the above-named action without providing a factual or legal basis for the said funding; 5) The Court below erred in law and in fact when it held that it is not sufficient to base a cause of action on illegality; 6) The Court below erred in law and in fact when it held that all the issues raised by the appellant herein are all matters that can be determined in the winding-up petition under Cause No. 2019/HP/0455 (sic) when the 1 st and 2 nd respondents are not parties to the winding-up petition; 7) The Court below erred in law and fact when it held that the claim against the 2 nd respondent could be determined in the action under Cause No. 2019/HP/0455 (sic) without the involvement of the 2 nd respondent who was not privy to the liquidation process. 6.0 APPELLANT'S HEADS OF ARGUMENT 6. 1 The appellant filed heads of argument dated 21 st March, 2023. The gist of Learned Counsel's arguments in grounds one and two is that all the claims raised by the appellant in its cause of J.13 action cannot be determined in the winding-up petition under Cause No. 2019/HP/0455. It was submitted that while applying the literal rule in interpreting section 117 of the CIA, the Court below did not set out what words were construed and what its interpretation of the section is. 6.2 Counsel submitted that the question to be addressed 1s whether section 11 7 of the CIA provides that a grievance against the acts or conduct of the liquidator must be raised only in the winding-up proceedings. Learned Counsel took the view that the answer is in the negative. 6.3 Firstly, because nothing in the wording of section 117 of the CIA suggests that a grievance against the acts of a liquidator can only be raised in the winding-up proceedings. The words "in the winding-up petition/proceedings" do not appear anywhere in the provision. That the provision merely provides for grievances to be brought before the Court, which in section 2 is defined as "the High Court for Zambia". It was further con tended that section 11 7 falls under Part VIII of the Act which provides for "Miscellaneous Provisions on Winding-Up" and not Part VI which provides for winding-up J.14 by the Court. That the mode of bringing a grievance before the High Court under section 11 7 of the CIA is left open. 6.4 Thirdly, Counsel submits that section 117 of the CIA in providing for an application "to confirm, reverse, or modify the act or decision" of a liquidator, uses the word "may" which word in the case of Dr. Chitalu Gonzo Lumbwe v University of Zambia 111 was held to be permissive and not mandatory. Further that in Milford Maambo & Others v The People 121 , the Supreme Court held that the use of the word 'may' in Article 180(4)(c) of the Constitution of Zambia as amended, was discretional. 6 .5 In that regard, it was submitted that the use of the word 'may' in section 11 7 of the CIA denotes option on the part of the entity authorized to do so. That it is couched in permissible and not mandatory terms, meaning that the procedure outlined therein is not one that is mandatory to adhere to. 6.6 Secondly, Counsel contends that the application referred to in section 117 of the CIA is one concerned with confirming, reversing or modifying the act or decision of the Provisional Liquidator. In the case at hand, no confirmation, reversal or modification of the acts of the 1 st respondent is being sought. 6 . 7 Counsel further submitted that a review of section 11 7 of the J.15 CIA reveals that the section applies to a grievance against an act or decision of a liquidator whereas , in this case, the remuneration agreement and addendum thereto, are neither acts nor decisions of the liquidator, but agreements which cannot be equated to an act or decision of a liquidator. In any case, the appellant does not seek any confirmation, reversal or modification of the acts or agreements of and by the 1 st respondent. 6. 8 There being no prov1s1on 1n the CIA providing that such matters ought to be raised in winding-up proceedings, it follows that the intention of the legislature was to merely provide for the High Court as the forum for determination of grievances under section 11 7 of the CIA. Therefore, the Court below erred when it held that all the issues raised in the dismissed action, including the claims for an account and reimbursement, and the claims against the 2 nd respondent, could be ably determined in the winding-up proceedings. 6. 9 In addition, it was submitted that the ruling in Cause No . 2019/HP/0761 (the winding-up proceedings) by Justice Banda-Bobo, as she then was, determined that the matter, J.16 having been stayed, no further step can be taken therein. For authority, the case of Aristogerasimos Vangelatos v Demetre Vangelatos, Metro Investments Limited & King Quality Meat Products Limited 131 was cited for the principle that when proceedings in a case are stayed, a party cannot take further steps 1n the stayed proceedings before they are reactivated. 6.10 In ground three, Counsel submits that the alleged acts and om1ss10ns ar1s1ng out of the performance of the 1 st respondent's functions as Provisional Liquidator, are not pending before any Court. That the issues relating to the decision to enter into a consent agreement to sell surface rights to Moxico Resources Zambia Plc and others, and the issue of the restructuring of the appellant company, are not pending before any other Court, let alone in the winding-up proceedings. 6.1 1 For this reason, it was submitted that the finding of the Court below that the issues raised are pending before another Court is clearly perverse and not a finding which any Court on a proper review of the evidence and acting correctly and reasonably, can make. See the case of Zambia Revenue J.17 Authority v Mwanza & Others 141 was cited as authority for the above proprosition. 6.12 The winding-up proceedings 1n Cause No. 2019/HP/0761 having been stayed by a Court of equal and competent jurisdiction, the Court below ought to have followed and upheld Justice Banda-Bobo's decision. It was further argued that the decision of the Court below not only interferes with a decision of another Court but also prevents the appellant from seeking relief until the stay in the winding-up proceedings is lifted. We were urged to reverse the findings of the Court below on the authority of the case of Attorney General v Marcus Kampumba Achiume 151• 6.13 In ground four, Counsel contends that the Court below was obliged to thoroughly address the issue whether the appellant was a competent party to commence the action in the lower Court. That the lower Court made a finding that the appellant is not a competent party without providing any factual or legal basis for the said funding. 6.14 It was submitted that the appellant is a proper party to commence the action in the Court below to redress the wrongs to the appellant company by the 1 st respondent. This is J.18 because the monies that the 1 st respondent received were paid from the funds of the appellant and that the 1 s t respondent does not dispute that his purported invoices for work done were addressed to the appellant for payment. 6.15 Therefore, it is absurd for the 1st respondent to claim that the party from whom he seeks payment has no locus to question the basis upon which that payment is being made. If the 1st respondent's argument is accepted that the appellant has no locus standi because it is not a party to the remuneration agreement and addendum thereto, then it follows that the appellant has no obligation to pay his invoices for the reason that it is not privy to the remuneration agreement. 6.16 To demonstrate that the appellant is competent to bring the action, we were referred to the case of Avalon Motors Limited (In Receivership) v Bernard Leigh Gadsden Motor City Limited 161 where the Supreme Court guided as follows: "What is certain is that companies under receivership are not left without remedies in the event of wrongdoing by the Receiver. Misfeasance, gross negligence, anything amounting to fraud and various other breaches or transgressions can result in a Receiver or former Receiver being sued. The true issue in this case was "who should sue"; or when can the directors and shareholders of the company still under J.19 receivership be allowed to maintain an action in the name of the company? There can be no doubt whatsoever that the shareholders and Directors, as well as anybody who is properly interested and who has beneficial interests to protect can sue a wrongdoing Receiver or former Receiver in their own names and in their own right. In the case of an action against a former Receiver, a current Receiver if so minded can join the company in the action. However, as far as persons who are not Receivers suing in the company's name is concerned, we agree with Mr Wood that the circumstances when this will be permitted should be limited. For instance, it would be improper for a current Receiver being sued in his own name by the company as this would amount to suing himself. See Magnum (Zambia) Limited v Basit Quadri (Receiver/Manager) and another (1981) ZR 141 (which held, inter alia, that a company under receivership has no locus standi independent of its Receiver). However, whenever a current receiver is the wrongdoer (as where he acts in breach of his fiduciary duty or with gross negligence) or where the directors wish to litigate the validity of the security under which the appointment has taken place or in any other case where the vital interests of the company are at risk from the Receiver himself or from elsewhere but the Receiver neglects or declines to act, the directors should be entitled to use the name of the company to litigate . ... " 6. 17 On this basis, Cou nsel submitted that th e app ellant has a right at com mon law to su e a d elinquen t liquida tor for redress for misfeasance while in office, wh ich righ t is indep en dent of J.20 section 70(2) and (6) of the CIA relied upon by the 1 st respondent to deny the appellant that right. 6 .1 8 In ground five, the appellant contends that the traditional approach as regards actions founded on illegality is that no action can arise from an illegal contract. As authority, we were referred to the cases of Patel v Mirza 171, Scott v Brown, Doering, Mcnab & Co. 181 and Kenya Airways Limited v Satwant Singh Flora l9 l_ 6. 19 It was s ubmitted that 1n this case, the appellant is not seeking to enforce the remuneration agreement, but rather, to pursue its statutory remedy as set out in section 70(6) of the CIA to recover monies unlawfully paid by the 1 st respondent in excess of the prescribed amounts. That in arriving at its decision, the lower Court neither referred to nor interpreted section 70(6) of the CIA in its assessment of the respondents' preliminary objections. 6.20 Lastly, in grounds six and seven, the appellant submits that the 1 st and 2 n d respondents are not parties to the winding-up proceedings and that there is no relief sought against them therein. Save for being appointed Provisional Liquidator in the winding-up proceedings, which office the 1 st respondent no J.21 longer holds on account of his resignation, the 1 st respondent has no interest in the winding-up. 6. 21 It was further argued that the action in the Court below was brought against the 1 st respondent in his personal capacity while the 2 nd respondent was brought in on account of the legal fees purportedly paid to the said firm in the sum of $29, 154, 319. 44 when no legal services were provided by the said firm. Therefore, it was a misdirection for the Court below to hold that the claims against the respondents ought to be pursued in the winding-up proceedings when they are not parties and have no interest therein. 6.22 The cases of Amon v Raphael Tuck & Sons Limited 1101 and The Attorney General v Aboubaker Tall 1111 were cited on joinder of any person as a defendant against whom the right to any relief is alleged to exist and for purposes of ensuring that matters in the cause may be effectually and finally determined and adjudicated upon, and put an end to any further litigation. 6 .23 The Court was invited to reverse the decision of the lower Court, uphold the appeal with costs and order that the matter J.22 -:: be remitted to the Court below for hearing before a different judge. 6.24 The respondents did not file heads of arguments of arguments on record. 7.0 ANALYSIS AND DECISION OF THE COURT 7.1 We have considered the appeal, the authorities cited and the arguments advanced by the Learned Counsel. Before considering the grounds of appeal in detail, a brief recap of the facts is necessary. It is not in dispute that under Cause No. 2019/HP/0455, winding-up proceedings against the appellant were commenced by ZCCM-IH leading to the appointment of the 1 st respondent as Provisional Liquidator. During his tenure as Provisional Liquidator, the 1 st respondent executed a remuneration agreement and an addendum thereto by which he is alleged to have paid himself some monies from the appellant. He also appointed and paid the 2 nd respondent for legal services from funds belonging to the appellant . 7.2 Later, by consent agreement, the 1st respondent was removed from the role of Provisional Liquidator and replaced by Celine Meena Nair, the Official Receiver and Liquidator. The winding up proceedings were subsequently stayed by order of this J.23 Court under Appeal No. 181 of 2019 on 20th November, 2020. The appellant then commenced a fresh action against the respondents seeking several reliefs. 7. 3 We shall first address ground four before proceedings to address, grounds one, two, three, six and seven which will be dealt with together as they address the issue whether the claims by the appellant against the respondents can be determined in the winding-up proceedings as opposed to commencing a fresh action. 7.4 In ground four, the appellant challenges the finding by the Court below that the appellant (under Liquidation) is not competent party to commence these proceedings. The basis by the lower Court in holding that the appellant company under liquidation is not a competent party to these proceedings being that the issues raised in this action can be determined in under the winding up proceeding. Is the appellant a competent party to have commenced the proceedings in the Court below subject of appeal? The appellant in the lower Court sought the following claims. i) A declaration that the remuneration agreement and addendum to the remuneration agreement are null and void; J.24 ii) The sum of $59, 336, 903.00 being the sum drawn by the 1st respondent from the appellant's accounts; iii) An order that the 1 st respondent renders an account of all money belonging to the appellant which came into the hands of the 1s t respondent as Provisional Liquidator of the appellant or received by any other person on behalf or on account of the respondent as such an agent or employee; iv) An order for payment by the 1st respondent to the appellant of any sum found due upon taking such account; v) An order for loss of use of the monies improperly drawn and paid by the 1 s t respondent; vi) In the alternative to (i) above, reimbursement of the sum of $53, 872, 952. 00 being remuneration collected in excess of the amount prescribed by the CIA and CIA regulations; vii) Damages for the 1s t respondents' breach of duties as Provisional Liquidator of the appellant company to be assessed; viii) As against the 2 nd respondent, the sum of $29, 154, 319. 44 being the sum received by the 2nd respondent for which no service was provided by the 2 nd respondent to the appellant company. 7.5 The Supreme Court in the case of Avalon Motors Limited (In Receivership) v Bernard Leigh Gadsden Motor City Limited 161 held as fallows· ' " ... However, whenever a current receiver is the wrongdoer (as where he acts in breach of his fiduciary duty or with gross negligence) or where the directors wish to litigate the validity of the security under which the appointment has taken place or in any other case where the vital interests of the company are at risk from the Receiver himself or from elsewhere but the Receiver neglects or declines to act, the directors should be entitled to use the name of the company to litigate . ... " J.25 7 .6 In casu, the appellant alleges wrong doing by the receiver. It is trite that there are remedies available to a company in receivership/liquidation where wrong doing is imputed upon the receiver /liquidator. The wrong doings are not limited to fraud but are wide encompassing misfeasance, negligence and other breaches. These wrong doings give rise to actions against the wrongdoers. Therefore, the company having interest to protect is a properly interested/ competent party to sue the respondents. 7. 7 From the statement of claim, it is evident that the appellant company in liquidation has grievances with the 1 s t respondent in the manner he proceeded with the liquidation process. 1.e the colossal sums of remuneration paid to himself as liquidation fees and alleged legal fees paid to the 2 nd respondent. Further, the appellant sought damages for breach of duty against the Provisional Liquidator. For this reason, we hold the view that the only legitimate avenue available to the appellant is to bring an action against the liquidator in the name of the company so as to get redress for the alleged wrongs committed against it. On this basis, ground four must J.26 succeed. The holding by the Court below that the appellant (under liquidation) is not a competent party to commence these proceedings is set aside and substituted with the holding that the appellant is a competent party to have commenced the proceedings in the lower Court subject of appeal. 7. 8 Grounds (i) (ii) (iii) a & (b), (vi) and (viii) all assail the holding by the Court below that all the claims by the appellant could be determined in the winding up proceedings. The said claims being as follows, (i) Claim for declaration that the renumeration agreement and addendum to the renumeration agreement are null did void for illegality. (ii) The claim for an account, for reimbursement and for alleged breach of duty by the 1 st respondent. 7. 9 The appellant further contended in its grounds that the holding by the Court below to the effect that all claims could be determined in the winding up proceedings interfered and contradicts the decision of Justice A. M Banda, under Cause 2019/HP/0761 where she held that she had no jurisdiction to determine the said issues in the face of the stay of proceedings and referral of the matter to arbitration by the J.27 Court of Appeal. That the issues before the Court below were not pending before any other Court. Further that the 1 st and 2 nd respondents are not parties to the winding up petition. In addition that it was wrong of the Court below to hold that the claim against the 2 nd respondent could be determined in the said winding up cause, without the involvement of the 2 nd respondent who was no privy to the liquidation process. 7. 10 The claims show that they arise from the exercise of the duties and functions of the Provisional Liquidator by the 1 st respondent when he held office. The 1 st respondent took the view that these claims, being against the 1 st respondent in his capacity as Provisional Liquidator, should be dealt with by way of an application to the Court which heard the winding-up petition and not by a fresh action. This view is said to be anchored on the provisions of section 11 7 of the CIA which provides as follows: 11 7. A person aggrieved by an act or a decision of the liquidator may apply to the Court, which may confirm, reverse, or modify the act or decision complained of and make such order as it considers just. 7.11 The appellant contended that there is nothing in the wording of section 11 7 of the CIA that suggests that a grievance J.28 against the actions of a liquidator can only be made in the winding-up proceedings. It was also argued that some of the claims are against the remuneration agreement and addendum thereto which are neither acts nor decisions of the liquidator but agreements, and as such do not come within the ambit of section 11 7. 7 .12 A further argument by the appellant is that this Court stayed the winding-up proceedings pending arbitration in a judgment dated 20th November, 2020. Therefore, the only recourse available to the appellant was to commence a fresh action. 7.13 We are of the view that all the claims sought by the appellant arise from the appointment of the 1 st respondent as Provisional Liquidator. They are a direct consequence of the actions and decisions taken by the 1 s t respondent while exerc1s1ng his functions as Provisional Liquidator. Even the execution of the remuneration agreement and addendum thereto, followed by the alleged drawing of colossal sums of money from the appellant's accounts are actions and decisions he undertook as provisional liquidator. It is against these same actions that the appellant seeks redress. J.29 7. 14 The next issue to be determined is whether such an action can only be brought within the winding-up proceedings or by a fresh action. It is accepted that section 117 of the CIA is not couched in mandatory terms in that it provides that "(A) person aggrieved by an act or a decision of the liquidator may apply to the Court ... " to confirm, reverse, or modify the act or decision complained of. 7 . 15 The issue is whether there are special and compelling reasons to commence a fresh action, as was the case in Fred M'membe & The Post Newspapers Limited v Abel Mboozi & Others 1121 , where the conduct of the Court and liquidator made the option of joining the main winding-up proceedings not viable. Should an aggrieved party first apply to the Court that heard the winding-up proceedings and appointed the liquidator to obtain redress? Is the company precluded from commencing a fresh action? 7.16 In this case, we recognize the fact that in our judgment; Appeal 181 of 20 19, dated 20th November, 2020, we stayed the winding-up proceedings and referred the parties to arbitration. By so doing, the parties are precluded, no matter the hardship from taking any further steps in the proceedings. We refer to J.30 the guidance of the Supreme Court 1n Aristogerasimos Vangelatos v Demetre Vangelatos, Metro Investments Limited & King Quality Meat Products Limited l3 l that: "The critical issue in this appeal is whether after the winding up proceedings were stayed without reservation, it was open to any of the parties to take further steps in the action. Therefore, whatever hardships that arose from the stay of the winding up proceedings cannot in themselves create a procedural right for a party to take further steps in the proceedings that have been stayed or suspended until the happening of some event, in this case, until the determination of the appeal." 7. 1 7 We hold the view that the circumstances of this case do present special or compelling reasons for the appellant to commence a fresh action over its grievances against the 1 st respondent during his tenure as Provisional Liquidator, 1n respect of the earlier highlighted claims. 7. 18 The second limb to grounds six and seven is to the effect that the respondents are not parties to the winding-up proceedings and that the 2 nd respondent is not privy to the liquidation process. On this basis, the Court below held that the claim against the 2 nd respondent can be determined in the winding up proceedings without the involvement of the 2 nd respondent. 7 .19 It is appreciated that the appellant brought the action against J.31 the 2 nd respondent in that it was paid for legal services by the 1 st respondent from monies drawn from the appellant, which services, it is argued, were never provided. Therefore, whatever decision is made against the 1 st respondent with respect to the monies paid by the 1 s t respondent in its capacity as Provisional Liquidator to the 2 nd respondent from the accounts of the appellant, will affect the 2 nd respondent. This is yet another special circumstance for commencing of a fresh action against the former liquidator and the 2 nd respondent. Therefore, the claims by the appellant cannot be pursued 1n the winding up proceedings. 7. 20 Ground five assails the holding by the Court below to the effect that the statement of claim does not disclose a reasonable cause of action for the claim for a declaration that the renumeration agreement is null and avoid for illegality. Further, that it is not sufficient to base a cause of action on illegality. Numerous English decisions and a Kenyan authority were cited on the legal maxim "Ex turpi cause non oritur actio" that no Court ought to enforce an illegal contract or allow itself to be made the instrument of enforcing J.32 obligations ansing out of a contract or transaction which is illegal. 7 .21 One of the claims sought by the appellant was a declaratory relief, in respect of the renumeration agreement. The other reliefs were for monies paid out pursuant to the said renumeration agreement. We have perused section 70(6) of the CIA which provides that: A liquidator who knowingly collects remuneration in excess of the prescribed amount is personally liable to reimburse the amount of the excess remuneration so collected and commits an offence and is liable, on conviction, to a fine not exceeding three hundred thousand penalty units or to a term of imprisonment not exceeding three years, or both. 7.22 Having consid ered the provisions of section 70(6) of the CIA, we are satisfied that the cause of action for reimbursement of sums of money allegedly gotten by the respondents is based on statute. It is a claim in th e circumstances of this case that cannot be pursued in the winding-up proceedings which were stayed pending arbitration. Most important is that the claims also arise from misfeasance, alleged breaches and transgr essions on the part of the former liquidator. 8.0 CONCLUSION • J.33 8.1 We reiterate that the Court below erred in law and fact by dismissing the appellant's action in the Court below on the basis that all the claims by it could be pursued in the winding up proceedings. The said winding proceedings having been stayed by this Court in Appeal 181 of 2019 in a ruling dated 20th November 2020 and by virtue that the appellant under common law can sue the respondents against wrong doing in a fresh action under the circumstances of this case, we find merit in the appeal. 8 .2 We hereby set aside the decision of the lower Court dismissing the action. The matter shall proceed in the lower Court before another Judge. Costs to the appellant to be taxed in default of agreement. . ................ 1 ..................... . M. J. Siavwapa JUDGE PRESIDENT .. .•......•..•••••••••......• ......... . C. K. Makungu COURT OF APPEAL JUDGE ..........•....................... F . M. Chishimba COURT OF APPEAL JUDGE