Mercy Chileshe Lengwe v PICLA Women Empowerment Foundation Limited (APPEAL NO. 86/ 2023) [2024] ZMCA 101 (10 May 2024)

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 86/2023 HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: MERCY CHILESHE LENGWE APPELLANT AND PICLA WOMEN EMPOWERMENT FOUNDATION LIMITED RESPONDENT Coram: Chashi, Sichinga and Sharpe-Phiri, JJA on 3()th April and 10th May, 2024 For the Appellant: Mr. M. Phiri of Messrs M. C. Phiri and Associates as agents of Messrs VK Mwewa and Company For the Respondent: No Appearance JUDGMENT Sichinga JA delivered the Judgment of the Court. Cases referred to: 1. The Minister of Home Affairs and Others v Habasonda (2007) ZR 207 2. China H enan International Economic Technical Cooperation v Mwange Contractors Limited SCZ Judgment No. 7 of 2002 3. Chazya Silwamba v Lamba Simpito (2010) 1 ZR 475 4. Codeco Ltd v Elias Kangwa and Others SCZAppeal No. 199 of2012 5. Himani Alloys Limited v Tata Steel Limited (2011) 15 SCC 2 7 6. Zega Limited v Zambezi Airlines Limited and Diamond General Insurance Limited SCZAppeal No. 39 of2014 J1 7. Finance Bank Zambia PLC v Lamasat International Limited CAZ Appeal No. 175 of2017 Legislation referred to: 1. The Banking and Financial Services Act No. 7 of 2017 2. The Rules of the Supreme Court of 1965, 1999 Edition (White Book) 3. The Court of Appeal Rules, Statutory Instrument No. 65 of 2019 1.0 Introduction 1. 1 This is an appeal against the Ruling of the High Court at Ndola, delivered by Musonda J on 28th February, 2022 1n which the lower court ordered that judgment on admission be entered in favour of the plaintiff. 2.0 Background 2.1 On 20th July, 2021, the plaintiff, PICLA Women Empowerment Limited (now respondent) commenced an action by way of writ of summons, against the defendant, Mercy Chileshe Lengwe (now appellant) in the High Court at Ndola, seeking the following reliefs: 1. A paym ent of the sum of ZMW477,376.31; 11. Interest as by statute provided ; 111. Costs; and 1v. Any other relief and/ or furt her reliefs the court shall deem fit. 2.2 A defence and counterclaim was filed by the defendant on 15th March, 2021, denying some allegations in the statement of claim. It was filed under a different cause number. She J2 averred that she obtained loans from two village banking groups namely, W4W Smart Saver and Innovative Smart Saver. That she failed to service the loan fully due to the Covid-19 pandemic which adversely affected her events management and wedding planning business. That by August 2020 the loan had accumulated to K300,000.00 due to compound interest that kept accruing on the outstanding amount. 2.3 The defendant further averred that her calculations of her indebtedness as at 1st December, 2020 were the sum of K130,362.00 owed to Innovative Smart Saver group. That her total savings with interest under the said group was K121,668.00. She stated that her indebtedness to W4W Smart Saver Group as at 1st December, 2020, was K130,362.00 and her total savings were Kl53,240.00. 2.4 The defendant claimed interest on her savings. She further sought an order for the appointment of an independent auditor to calculate and reconcile the debt as she was of the view that there was a miscalculation of interest. That compound interest was only to be added on the defaulted amounts and not the whole total amount owed. She ultimately denied owing the plain tiff monies. 2.5 On 21 st July, 2021, the plaintiff applied for an order to enter judgment on admission. 2.6 On 26 th August, 2021, the defendant applied to amend her defence and counter-claim. In her affidavit in support, she J3 maintained that she had no relationship with the plaintiff. The gist of her amended affidavit was that her acknowledgment of the debt and subsequent admission was made under a genuine mistake and misapprehension of facts by the plaintiff that the money circulating in the group was provided by the plaintiff. She further charged, in her affidavit, that the plaintiff's directors were engaged in money laundering, tax evasion, and charging exorbitant compounded and extortionist interest rates. By way of relief in her counter-claim, she sought orders: that the plaintiff had no role to play in the village banking groups; that the plaintiff cannot in terms of the provisions of section 6 of the Banking and Financial Services Act1 conduct any financial business or provide financial services without a licence; and that all monies paid by the defendant to the plaintiff under the guise of the village banking groups be accounted for and paid back to her with interest. 2. 7 On 28t h August, 2021, the defendant opposed the summons to enter judgment on admission by way of an affidavit. She admitted that she signed the debt acknowledgements, but that she did so under a genuine mistake and possible misrepresentation on the part of the plaintiff. 2.8 On 12t h October , 2021 , the defendant filed an application to withdraw the application for leave to amend the defence and counter-claim. In the affidavit in support of the application, it was averred that the same was filed by mistake as it was in J4 response to the issues raised by the plaintiff under cause no. 2021/HN/052, which had since been discontinued. 2.9 On 26 th November, 2021, the plaintiff filed an affidavit in opposition to the summons for leave to amend defence and counter-claim. The gist of the affidavit in opposition was that the defendant had neither entered appearance nor filed a defence or counterclaim. That as such the defendant lied on oath and her application was an abuse of the court process. 2.10 Further, on 26th November, 2021, the plaintiff filed an affidavit in opposition to the summons for leave to withdraw admission. The gist of the affidavit is that the defendant was fully aware that the contracts she signed related to the debts she willingly contracted under the two village banking groups. 3.0 The High Court's Ruling 3.1 Musonda J considered three applications: the application for judgment on admission; the defendant's application to withdraw admission; and the defendant's application to amend the defence and counter-claim. 3.2 On the application to amend defence and counter-claim, Musonda J heard the application ex-parte on 26th October, 2021 and granted it. He found that at the time when the plaintiff was responding to the application by the defendant to withdraw the defence and counter-claim, the same had been JS withdrawn. He held that the application turned out to be an abuse of the court process and found against the defendant. 3.3 On the application to withdraw admission, the learned Judge found there was no material on which h e could exercise his discretion to permit the withdrawal of the admission contained in the acknowledgement of the debt signed by the defendant. 3.4 On the plaintiff's application to enter judgment on admission, the learned Judge found that the defendant admitted owing the claimed amounts. That there was no defence filed. He proceeded to enter judgment on admission in the sum of K477,376.31 with interest at 6% per annum from the date of writ to date of judgment, and thereafter at 10% per year until the debt was fully settled. 4.1 The appeal 4.1 Dissatisfied with the outcome of the lower court's Ruling, the defendant appealed to this Court raising four grounds of appeal as fallows: 1. The honourable Court below erred in law and fact when it failed to consider the difference between the plaintiff (now Respondent), and the village banking groups in the name of Innovative Smart Savers Group; . 2. The honourable Court below erred in law and fact when it entered judgment on admission against the Appellant largely on the basis that there was no defence and counter-claim J6 filed by the Appellant yet it is on record that the appellant filed a defence and counter-claim on the 21 st October, 2021; 3. The honourable Court below erred in law and fact by failing to consider the circumstances under which the acknowledgements were signed; and 4. The honourable Court below failed to address the issue as to whether the Respondent is a limited company registered to lend money by virtue of the provisions of the Banking Services Act. 5.0 Appellant's heads of argument 5. 1 At the hearing of the appeal, Mr. Phiri, learn ed cou nsel for the a ppellant relied on th e app ellant's h eads of argument filed on 29 th March, 2023. Grounds on e and two wer e argued separately. Gr ounds three and four were argued a s on e . 5 .2 In the first ground of appeal, it was advanced that the learned Judge appeared to be treating the respondent, which is a limited company by guarantee, as being the same as th e village banking groups, Innovative Smart Savers and Wom en Smart Savers. It was argued that they were not the same as evidence on record shows that the appellant and others were m embers of the two village banking groups to which they made their contributions in return for profits and advance loans. 5.3 The appellant stated it was important for t he Court to appreciate the essence of Village Banking concept. We were referred to a Bank of Zambia Statement on Village Bankin g/ J7 Savings Groups issued on the 16th September, 2020 which states the following: "Village Banking/Savings Groups are small savings and lending schemes organized outside the formal financial sector. As the term "Village" implies, membership is usually among people who are familiar with each other and share certain commonalities through that family and community membership. Membership is thus self-selection and the number of members in the group is limited. Members formulate rules and procedures to guide the governance of the group. The group is self-managed and does not involve the placement of savings/deposit or arrangement of borrowing by an individual agent or company outside the group membership." 5.4 It was submitted that 'village banking' is the term used to describe informal mutual support groups within a community. That it is a banking practice in which members form a group of usually between 25 to 30 people to save collectively, with the option to borrow from the accumulated funds. It was argued that the learned Judge in the court below failed and/ or omitted to discern this distinction from the respondent herein, being a limited company whether by guarantee or shares. That the respondent has completely no role to play in village banking, and as such, it is illegal for the respondent to do so. 5.5 To buttress this point, it was demonstrated that the appellant signed an application for membership form at the time she J8 was joining the village banking groups. We were referred to the form at page 93 of the record of appeal. 5 .6 It was stated that the learned Judge observed 1n his ruling that the appellant joined the village banking groups and appended her signature on their constitution. Pages 101 and 105 of the record of appeal refer. 5.7 It was submitted that a limited company does not have a constitution, and is not governed by one. That it is governed by a memorandum and Articles of Association. It was argued that the respondent's participation in the affairs of the two village banking groups offended the principles of village banking as pronounced in the Bank of Zambia statement of 16th September, 2020. Further, that the learned Judge failed to discern the differences between the respondent and the two village banking groups to which the appellant was a member. It was contended that if the learned Judge had done so, no judgment would have been entered in favour of the respondent. 5 .8 In support of the second ground of app eal, it was submitted that the appellant filed a defence and counter-claim on 21 st October, 2021. Pages 150 to 155 of the record of appeal refer. That the defence and counter-claim were filed after withdrawal of the earlier memorandum of appearance and defence filed by the appellant on 15th March, 2021. Pages 23 to 26 of the record of appeal refer. J9 5.9 We were asked to note that on page 23 of the record of appeal the cause number quoted is 2021 / HN / 186 (the right cause number for this matter), while on pages 24 to 26, which formed the bulk of the defence and counter-claim the cause number quoted was 2021/HN/052, a cause which according to the respondent was discontinued. That the said defence was hence inconsequential after the said discovery. It was stated that the appellant then caused to be filed the defence and counter-claim since there was no judgment in default of appearance and defence. It was contended that if the lower court had addressed itself to the said defence and counter claim it would have discovered that the same raised a number of issues for the court to resolve. 5.10 In support of the third and fourth grounds of appeal, it was submitted that the lower court glossed over the circumstances under which the acknowledgments were made. It was advanced that it is the duty of the court to pronounce itself on matters before it. In support of this submission reliance was placed on the case of the Minister of Home Affairs and Others v Habasonda1 where the Supreme Court stated the following: "We are satisfied that both parties raised very important points of law and fact in their arguments and submissions. Regrettably the learned trial Judge never discussed them. However the court having not made any specific finding of fact, we as an appellate court, are not in a position to make JlO those findi ngs of fact on the consideration of the pleadings on record and the issues raised it is our view that this is not a case w here we should recreate the judgment on behalf of the trial Judge. In the circumstances we set aside the p u rported judgment and order the matter goes for a retrial before a d iffe rent Judge of the High Court" 5.11 Buoyed by the Supreme Court's holding above, it was advanced that had t h e learned Judge in the court below cared to a ddress this issue as contained in the various affidavits and t h e m em or andum of d efence and counter-claim it would have been clear t h a t there was much more on record other than entering judgmen t on a dmission. 5.12 We were u r ged to allow the appeal with costs to the appellant. 6.0 Respondent's heads of argument 6 .1 Neither the respondent nor its counsel were in attendance at the hearing of the appeal. We proceeded to hear the appeal and noted the respondent's heads of argument filed into court on 30th May, 2023. Ground one is argued separately. Grounds two and three are argued together. Ground four is also argued separately. 6.2 In response to the first ground of appeal, it was submitted that it was wrong for the appellant to claim that the lower court failed to consider the difference between the respondent and the two village banking groups. That the court below J11 considered the said difference at page R 10 of the Ruling in which it stated that: "It is clear to observe that the defendant joined two women village banking groups known as Women for Women and Innovative Smart Savers. The rules governing the groups were contained in a constitution of the plaintiff, which constitution the defendant appended her signature to". 6.3 The respondent argued that it was clear that it is an incorporated entity engaged in, inter alia, the business of empowering women businesses. That in its quest to empower women, it formed a number of village banking groups to which the appellant belongs to two village banking groups. 6.4 In response to grounds two and three, it was submitted that it was wrong for the appellant to claim that the lower court erred to enter judgment on admission against the appellant largely on the basis that there was no defence and counter-claim filed by the appellant and for failing to consider the circumstances in which the acknowledgments were signed respectively. It was advanced that it is on record that the appellant filed a defence and counter-claim on 21 st October, 2021, and that the court considered the circumstances before arriving at its decision. Pages 7 and 8 of the record of appeal referred to. 6.5 It was advanced that the appeal appears to be a desperate attempt by the appellant to escape her indebtedness to the respondent. That the lower court noted the appellant's attempt at page 9 of the record of appeal where it said in part: J12 "However, a few points can be made; it appears that the defendant did not do a search. If the search was d one, t he application to withdraw defence and counter claim could not have graced the case record. Clearly, the application turned out not (sic) to be an abuse of the Court process for w hich the plaintiffs are entitled to costs." 6.6 The respondent submitted that in arriving at its decision to enter judgment on admission in favour of the respond en t, the court below took into account what it was called upon to decide including at page R 12 of the ru ling (page 18 of the record of appeal) where it stated: "In the case before it, the Defendant admits owing the claimed amounts. There is no defence that has been filed. In my view, there is no reason the discretion in Order 26 rule 1 HCR Chapter 27 of the Laws of Zambia cannot be exercised in favour of the plaintiff." 6 . 7 In support of the lower court's ruling counsel referred us to Order 21 Rule 6 of the High Court Rules supra wh ich provides as follows : "A party may apply, on motion or summons, for cancelled judgment on admissions where admissions of facts or part of a case are made by a party to the cause or matter either by his pleadings of otherwise." 6.8 Order 27 rule 3(2) of the Rules of the Supreme Court supra, was referred to where it provides that: "Admission of fact - such admissions may be express or implied, but it must be clear." J13 6. 9 The case of China Henan International Economic Technical Cooperation v Mwange Contractors Limited2 was cited where the Supreme Court gave the following guidance on judgments on admission: "The case flow management techniques at play requires the Court to be in control of the pace of litigation and properly direct the course of events. It would be absurd to expect a Court which is in control, to pause and wait for an application where clearly the defence is deemed to have admitted the claim. This is without prejudice to Order 27 Rule 3 of the Rules of the Supreme Court and Order 21 Rule 6 of the High Court Act where a plaintiff "may" apply by Motion or Summons to enter Judgment on admission." 6.10 Further the respondent adverted to the case of Chazya Silwamba v Lamba Simpito3 where the Supreme Court held: "1. A party may admit the truth of the whole or any part of another's case. When a fact is admitted, it is unnecessary for a party to advance evidence in relation to the admitted fact(s) at trial. 2. When a fact is admitted, it ceases to be an issue and neither party is required or permitted to advance evidence about it at trial. 3. An admission may be made expressly in a defence or in a defence to counterclaim. 4. An admission may also arise by virtue of the rules. For instance, where a defendant fails to traverse an allegation of fact in a statement of claim or where there is a default of defence. 5. If a defendant fails to address an allegation, he is deemed to admit it. J14 6. The function of an admission is to ensure that the Court's time at trial is not wasted and delay is avoided. Admissions also narrow the issues to be decided." 6 . 11 The respondent advanced that it was plain that the d ecision of the court below was based on the admissions made by the appellant. 6.12 It was submitted that by signing the acknowledgment, the appellant admitted her indebtedness to the respondent in clear, unequivocal and unambiguous terms. That the court below was on firm ground when it entered judgment on admission in favour of the respondent. 6.13 In response to ground four, it was submitted that the ground lacked merit because it seeks to address an issue that was not raised before the lower court. In support of this submission we were referred to the case of Codeco Ltd v Elias Kangwa and Others4 where the Supreme Court held: "In respect of the question whether or not the judge in the Court below erred in refusing to review his earlier ruling declining to set aside his judgment on 21 October 2011 raised in ground 1, we want to state at the outset, that this ground is incompetent before us as it deals with an issue which did not come up for determination in the court below. Our decision in the Buchman case is this point where we held that: 'A matter which is not raised in the lower court cannot be raised in a higher court as a ground of appeal'." J15 6.14 In light of thes e submissions, the respondent argued that all grounds of this appeal should fail. We were urged t o dismiss the appeal with cos ts to t h e r espondent. 7.0 Our consideration and decision 7. 1 We have given this appeal our due consideration and are grateful for the submissions by counsel for both parties. We have considered the grounds of appeal, the arguments by counsel, authorities cited, the evidence on record and the impugned Judgment. We shall address grounds one and four separately . Grounds two and three shall be dealt with together. 7 .2 The issue raised in the first ground of appeal relates to the appellant's denial that she had any dealings with the respondent company, but rather dealt with two village banking groups: Innovative Smart Savers and Women for Savers. In support of this ground the appellant referred the Court to a Bank of Zambia statement of 16th December, 2020, defining 'village banking/ savings groups., She further asserted that she signed acknowledgment forms with the said two village banking groups and not the respondent, a corporate sole. 7 .3 The issue of whether or not the appellant had dealings with the respondent is a matter of fact and one which in the circumstances of this case was irrelevant for the lower court to consider. In its statement of claim, the respondent averred that it is a company limited by guarantee incorporated under J16 the laws of Zambia and in the business of empowering various women's businesses. At pages 39 are 40 of the record of appeal are the respondent's contractual documents which the appellant executed to obtain the loans from the two village banking groups under the auspices of the respondent. The issue raised in the first ground of appeal is clearly a red herring to the main contention of the debt allegedly owed by the appellant to the two village banking groups under the umbrella of the respondent. It was further averred that it was the promoter of the two village banking groups through which the appellant borrowed the monies in contention. We find no merit in ground one and accordingly dismiss it. 7.4 The main contention in this appeal, is as captured 1n the second and three grounds of appeal, that is, whether the respondent was entitled to judgment on admission. 7. 5 It is trite law that a court has power to enter judgment on admission where the evidence reveals that the admission is clear and unequivocal. The court may enter judgment without waiting for the determination of any other question between the parties. We refer to Order 27 Rule 3 of the Rules of the Supreme Court2 which provides as follows: "Where admissions of fact or of part of a case are made by a party to a cause or matter either by his pleadings or otherwise, any other party to the cause or matter may apply to the court for such judgment or order as upon those admissions he m.ay be entitled to, without J17 waiting for the determination of any other question between the parties and the court may give such judgment, or make such order, on the application as it sees just. " 7.6 In the case of Himani Alloys Limited v Tata Steel Limiteds the Su p reme Cou rt of Ind ia h eld as follows: "Where admission of facts have been made in the pleadings or otherwise, whether oral or in writing, the court may at any stage of the suit either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admission." 7 .8 In t h is jurisd iction , the Supreme Court cit ed th e Himani Alloys case with approval in th e case of Zega Limited v Zambezi A irlines Limited and Diamond General Insurance Limited6 when it held as follows: "The court, on examination of the facts and circumstances has to exercise its judicial discretion, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion of the court should not be exercised to deny the valuable right of the defendant to contest the claim. In short, the J18 discretion should be used only where there is clear admission which can be acted upon. " 7 . 9 Bound by t he Suprem e Court's guidance, we s tated the following in t h e case of Finance Bank Zambia PLC v Lamasat Inter national Limited7 : "The court has discretionary power to enter judgment on admission under Order 27 of the High Court Rules. This power is exercised in only plain cases where admission is clear and unequivocal. An admission has to be plain and obvious, on the face of it without requiring a magnifying glass to ascertain its meaning. Admissions may be in pleadings or otherwise. A court cannot refuse to grant judgment on admission in the face of clear admissions." 7. 10 In casu, th e docu men ts u pon which j u d gment on a dmission was enter ed are at pages 39 and 4 0 of the record of a ppeal. They are iden t ical documents for t h e loans acces sed from b oth village b anking grou ps save for the name of the village banking group and th e valu e of t h e loan accessed . The d ocumen t a t p age 39 of t he record reads in p art as follows: "CONTRACTUAL DOCUMENT I , the undersigned, duly accept that I owe PICLA WOMEN EMPOWERMENT FOUNDATION (INNOVATIVE SMART SAVERS GROUP) the sum of K270, 954=00 as from 1s t September, 2020. I promise to pay back in three instalments plus interest based on the Reducing Balance Method as follows: J19 PAYMENT PLAN INSTALMENT DATE AMOUNT SIGN FIRST 1 st October, 2020 SECOND 1 st November, 2020 THIRD 1 st December, 2020 COLLATERAL: _________________ _ Failure to honour the above payment plan will AUTOMATICALLY lead to the forfeiture and consequently disposal of the asset/s that has/have been placed as collateral so as to recover the outstanding amount and penalties thereof NAME: Mercy Chileshe WITNESS:LTC SIGNATURE: Signed SIGNATURE: Signed NRC #: 332074/61/1 CELL #: 0978 ... PHYSICAL ADDRESS: .... .. Ndola" 7.11 Our reading of paragraph 4 of the statement of claim at page 2 1 of the record of appeal reveals that the parties entered into a contract in respect of monies, advanced to the appellant by the respondent, on 1 st September, 2020. This is confirmed by paragraph 7 of the affidavit in support of the summons to enter judgment on a dmission at page 27 of the record of J20 appeal. In her defence and counterclaim filed on 15th March, 2021 at pages 24 to 26 of the record of appeal, the appellant's position was that she made payments to amortise the loans obtained from the respondent's village banking groups. However, she sought the court's intervention to reconcile the debt believing that the interest was compounded. 7 .12 In the present case, besides the contractual documents, there was no subsequent document showing that the appellant had unequivocally admitted to the respondent's claim. The documents at pages 41 to 47 of the record of appeal are statements prepared by the respondent showing the alleged outstanding amounts and the respondent's instructions to its bank to credit its village banking members with various loan amounts. 7.13 Upon a careful perusal of these documents produced on the re spondent's application to enter judgment on admission, we take the view that the appellant did not acknowledge its indebtedness to the respondent in clear and unambiguous terms. We accordingly find that the learned trial Judge erred to enter judgment on admission in favour of the respondent. We find merit in grounds 2 and three for the reasons stated and allow it. 7 . 14 Turning to ground four, the appellant has not made any submissions 1n respect of the provisions of the Banking Services Act as contended. The record of appeal does not J21 contain the appellant's skeleton arguments addressing this issue. It would appear that it is being raised for the first time on appeal. We accept the respondent's submissions and the Supreme Court's guidance in a plethora of authorities including the Codeco case cited, that a matter that is not raised in the lower court cannot be raised in a higher court as a ground of appeal. There being no arguments advanced on the Banking Services Act, ground four of the appeal is considered abandoned and in fact misconceived. 8.0 Conclusion 8.1 In the net result, the appeal substantially succeeds in grounds two and three. Ground one fails. Ground four is considered abandoned. 8.2 We set aside the ruling of the lowe c urt and remit the matter to the lower court for trial be£ e 8.3 Costs will abide the outco in the court below. J. Chashi COURT OF APPEAL JUDGE , SC ~ -1e N. A. Sharpe-Phiri COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE J22