Nathan Sinkala and 119 Ors v Charles Chanda (2022/HP/0927) [2025] ZMHC 56 (24 July 2025)

IN THE HIGH COURT FOR ZAMBIA AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA ( CIVIL JURISDICTION) 2022/HP/0927 BETWEEN: NATHAN SINK. ALA AND \G't'- yi c - ~ . PETITIONERS PRI NICIPAL AM.iJ1 ~ CHARLES CH For the Petitio 2 4 JUL 2025 _ ___ __ _, , RESPONDENT R Nyirenda - Messers Ferd For the Respondent: No Appearance JUDGMENT ---------------- / / , / CASES REFERED TO: · / ~ 1. Access Bank (Z) Limited Vs Group Five/ZCON Business Part Joint 1 _ 2. Nathan Sinkala & 119 Others Vs Brook Cherith Es,tate Agents & Charles Venture (SCZ/8/52/201';1); , Chanda2019/HP/1476; and 3. Nyampala Safaris & 4 Others Vs Wildlife Authorit~ & 6 Others (2004) Z. R 49 (S. C). -- L / LEGISLATION AND WORK; R'iiFERRED TO: 1. The Bankruptcy Act, Chapter 82 ojihe Laws of Zambia; and 2. The Bankruptcy Rules of 1952 of the Laws of Zambia. 1. INTRODUCTION 1.1 . This is a Matter where the Petitioners herein, on 16 th February, 2023, filed into Court a Creditors' Petition for Bankruptcy against the Respondent pursuant to Sections 6 and 7 of the Bankruptcy Act, Chapter 82 of the Laws of Zambia and Rules 143 and 144 of the Bankruptcy Rules of 1952. Jl CamScanner 1.2 The said Petition was accompanied by an Affidavit Verifying Bankruptcy Petition as well as a Schedule of all Petitioners. BACKGROUND 2.1 On 31st January, 2020, Judgment was rendered in favour of the Petitioners wherein the Respondent Debtor was found to be indebted to the Petitioners in the total sum of ZMW3,837,637.00 in an action concluded in the High Court under Cause No. 2019/HP/1476 awarded together with damages for breach of contract and damages for fraud to be assessed by the Deputy Registrar, interest on all sums due, with Costs . awarded to the Petitioners to be agreed in default to be taxed. __ ~ ·- The Respondent Debt9r has not made any payments to ~ / 2 .2 reduce the debt since 1the Judgment referred to above and the Judgment Debt still stands at ZMW3,837,637.00. 2.3 . Further, that the Respondent Debtor was served with a Bankruptcy Notice on 5 th April, 2022,· and has since failed to comply with the requirements of the same. 2.4 It is against this background, that this Application has been made. THE PETITIONER'S APPLICATION 3.1 The Petitioner's did on 16th February, 2023 file into Court a Creditor's Bankruptcy Petition which was accompanied by an Affidavit Verifying Bankruptcy Petition. 3.2 The said Affidavit was sworn by NATHAN SINKALA, the 1s t Petitioner in the present Matter, who had been duly J2 CamScanner authorized by the other 119 Petitioners to swear the Affidavit. 3 .3 The Deponent avowed that Judgment was entered in favour of himself and the other 119 Petitioners herein, on 31 st January, 2020, in the sum ofZMW3,837,637.00, with interest and Costs. A copy of the said Judgment was produced and marked "NSl." 3.4 It was averred by the Deponent that on 17th March, 2022, the Bailiffs executed the said Judgment against the Respondent which was returned as nulla bona. 3.5 That the Respondent has since not settled the Judgment Debt even though he is aware of the outstanding amount due to the Petitioners herein. 3.6 The Deponent avowed .,,tliat a Bankruptcy Notice was consequently issued and served on the Respondent on 8th July, 2022. A copy of the said Notice was exhibited and marked "NS2." THE RESPONDENT'S RESPONSE 4 .1 Since the re-allocation of this Matter, there have been no documents filed by the Defendant, to date. 5 HEARING 5.1 At the Scheduling Conference held on 27th March, 2025, Counsel stated that the Respondent was served by way of Substituted Service, including the date of hearing on 19th and 20th March, 2025, and they had filed an Affidavit of Service as proof thereof. 5 .2 Counsel submitted that under the circumstances, they wished to proceed with the Application before Court. as J3 CamScanner Ordered by the Court and that the Affidavit of Service to that effect on 11th March, 2025. 5.3 The Court noted that there were no reasons tendered by the Respondent for his lack of appearance and proceeded to grant Counsel for the Petitioner's Application to proceed to hear their Application. 5.4 Counsel submitted that before the Court were Bankruptcy Proceedings issued by the Petitioner's against the Respondent. That these proceedings emanated from a Judgment that was entered in favour of the Petitioner's by this Court on the 31st of January, 2020. 5.5 It was submitted by Counsel that the Petitioner's would rely on the documents filed on 16th February, 2023, to be precise; the Notice of Bankruptcy Proceedings, the Affidavit Verifying Bankruptcy Petition and the Creditor's Bankruptcy Petition. 5 .6 It was Counsel's submission that they had also attached the Schedule to the Creditor's Bankruptcy Petition, which Schedule contained all the 120 Petitioners, entitled to the benefit from the said Judgment against the Respondent. 5.7 It was Counsel's prayer that the Court would grant the Order as prayed by the Petitioners. 5 .8 -The Defendant had not filed Opposition as at the time of the Hearing held on 27th March, 2025. 5.9 The Matter was adjourned for Judgment to the 9th of May, 2025, with the same to be placed in Counsel's pigeon holes . J4 CamScanner CONSIDERATION AND DECISION OF THE COURT 6.1 It is hereby noted that notwithstanding multiple duly noticed scheduling conferences convened before this Court, the Respondent has failed to file any responsive pleading or opposition to the instant Matter and otherwise participate in these proceedings, despite proper service and adequate opportunity to do so. 6.2 In the case of Access Bank (Z) Limited Vs Group Five/ZCON Business Part Joint Venture 111 the Supreme Court stated as follows: Justice also requires that this Court, indeed all Court, must never provide succor to litigants and their Counsel who exhibit scant respect for rules of procedure. Rules of procedure and timelines serve to make the process of adjudication fair, just, certain and even-handed." 6.3 In light of the aforementioned, the Court will proceed to render its Judgment in the Matter. 6.4 In casu, the determinative issue before this Honourable Court is whether the Petitioners have discharged their evidentiary burden by proving that the Respondent meets the legal criteria for bankruptcy and the Petition presents sufficient grounds for granting of a Receiving Order in the terms sought. 6.5 Sections 6 and 7 of the Bankruptcy Act, Chapter 82 of the Laws of Zambia upon which this Application is predicated provides as follows: JS CamScanner "6(1). A creditor shall not be entitled to present a bankruptcy petition against a debtor unless- (a) The debt owing by the debtor to the petitioning creditor, or, if two or more creditors join the petition, the aggregate amount of debts owing to the several petitioning creditors, amounts to ten ngwee; and (b) The debt is a liquidated sum, payable either immediately or at some certain future time; and (c) The act of bankruptcy on which the petition is grounded has occurred within three months before the presentation of the petition ... " 7(1). A creditor's petition shall be verified by affidavit of the creditor, or of some person on his behalf having knowledge of the facts and served in the prescribed manner. (2) At the hearing, the Court shall require proof of the debt of the petitioning creditor, of the service of the petition, and of the act of bankruptcy, or, if more than, one act of bankruptcy is alleged in the petition, of one of the alleged acts of bankruptcy, and if satisfied with the proof, may make a receiving order in pursuance of the petition ... " 6.6 Additionally, Rules 143 and 144 of the Bankruptcy Rules of 1952 set out the form which the Petition must take, as J6 CamScanner well as the description and address of the debtor, respectively. 6. 7 Bankruptcy proceedings may be classified in two distinct categories under prevailing insolvency legislation: voluntary bankruptcy, where a debtor initiates judicial proceedings by filing a petition seeking formal adjudication of bankruptcy and consequent debt relief; and involuntary bankruptcy, where one or more petitioning creditors file an application with the court seeking a compulsory bankruptcy order against a debtor, upon sufficient demonstration of the debtor's insolvency and fulfillment of statutory requirements for involuntary proceedings. 6.8 In both instances, the Court retains the jurisdiction to determine the validity of the petition, assess the debtor's financial condition, and prescribe the appropriate insolvency resolution 1n accordance with statutory requirements. 6.9 In the present Matter, the Record definitively establishes that a Notice of Bankruptcy Proceedings was duly served upon the Respondent on 17th August, 2022 in accordance with Section 4 of the Bankruptcy Act, Chapter 82 of the Laws of Zambia. 6.10 It is a well-established principle that a creditor holding an unsatisfied judgment is entitled to commence bankruptcy proceedings against a debtor by serving a Bankruptcy Notice. Non-compliance with the Notice's requirements by the debtor renders them liable to be deemed to have committed an act of bankruptcy. J7 CamScanner 6.11 Section 3(1)(g) of the Bankruptcy Act is couched in the following terms: "1. A debtor commits an act of bankruptcy in each of the following cases: (g) if a creditor has obtained a final judgment or final order against him for any amount, and, execution thereon not having been stayed, has served on him in Zambia, or, by leave of the court, elsewhere, a bankruptcy notice under this Act, and he does not, within seven days after service of the notice, in case the service is effected in Zambia, and in case the service is effected elsewhere, then within the time limited in that behalf by the order giving leave to effect the service, either comply with the requirements of the notice or satisfy the court that he has a counterclaim, set-off or cross demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid, and which he could not set up in the action in which the judgment was obtained, or the proceedings in which the order was obtained." 6.12 Furthermore, Section 5 supra, states that: "Subject to the conditions hereinafter specified, if a debtor commits an act of bankruptcy the Court may, on a bankruptcy petition being presented either by a creditor or by the debtor, make an J8 CamScanner Order, in this Act called a receiving order, for the protection of the estate." 6 .13 Rule 1 79 of the Bankruptcy Rules of 1952 provides as follows: "Where the act of bankruptcy alleged in the petition is non-compliance with the requirements of a bankruptcy notice, then- {a) If the debtor has applied to set aside the notice, no receiving order shall be made against him until the application has been heard; and (b) If the notice is set aside or while proceedings are stayed, no receiving order shall be made; and the petition shall be adjourned or dismissed as the court thinks fit." 6.14 The purpose of Section 5 Order is to restrain the debtor from disposing of or otherwise dealing with their property prior to seizure, thereby ensuring that the property remains available to the trustee or receiver of the bankrupt estate in the event that a seizure order is subsequently granted. 6.15 In accordance with Section 7(2) of the Bankruptcy Act, upon hearing a Bankruptcy Petition, the Court must be satisfied of the existence of the following elements: (i} (ii} the existence of a debt; effective service of the petition; and J9 CamScanner (iii) the commisswn of an act of bankruptcy that supports the Petition and warrants the bankruptcy proceedings. 6.16 The Court, having examined the Record, is satisfied that the Petitioner has met the statutory prerequisites for the granting of a Bankruptcy Order, as follows: (a)the outstanding indebtedness owmg by the Respondent to the Petitioners is conclusively established by the Judgment entered on 31 st January, 2020, which remains wholly unsatisfied and has neither been stay~d or set aside; (b)substituted service was duly effected upon the Respondent on 6th and 7th March, 2025, as evidenced by the Affidavit of Service sworn on 11 th March, 2025; and (c) a failure by the Respondent to comply with the requirements of the Notice of Bankruptcy Proceedings served on ] 7th August, 2022, thereby resulting in the commission of an act of bankruptcy. 6.17 In an Application for a Receiving Order, creditors are not typically required to identify specific assets for inclusion in the Order as the Order operates universally upon all property belonging to the debtor at the date of the Order or acquired before discharge. 6.18 The Order itself is a judicial mandate that commences the bankruptcy process, placing the debtor's assets under the control of an official receiver or trustee. The Court JlO CamScanner subsequently determines the assets that fall within the purview of the order, based on the debtor's financial situation and the specific circumstances of the case. 6.19 In summation, the Court seeks to invoke the precedent established in Nathan Sinkala & 119 Others Vs Brook Cherith Estates Agents and Charles Chanda 121 to demonstrate a recurring pattern of conduct by the Respondent characterized by the deliberate delay of due process. In the cited case, it was held that: "Careful consideration has been made of the circumstances of this case. It is pretty clear from the record and dispositions that the 2 nd Defendant attempted to mislead the court that he never had notice of proceedings. However, this is inconceivable that the 2 nd Defendant who received process on behalf of the 1 st Defendant and instructed Counsel in the matter was unaware of the proceedings. The record even has an affidavit in opposition deposed to by the 2 nd Defendant, dated 6 th November, 2019. Clearly from the record and facts deposed to by the Plaintiff, there is no shred of truth in support of the applications that have been set out by the 2nd Defendant. The applications if granted will only delay the Plaintiffs enjoyment of the fruits of their judgment. The evidence on the record clearly shows that the 2 nd Defendant was always aware of the matter in Jll CamScanner i I court. In view of the foregoing, the applications are dismissed with costs for the Plaintiffs." 6 .20 The Court takes judicial notice that the litigants presently before it are identical to those in the case referred to above. The Respondent in casu was properly the 2nd Defendant in the referenced proceedings. Furthermore, the Court observes that the Respondent's conduct is consistent with an intention to delay judicial process, thereby impinging the Petitioner's rights to reap the benefits of their Judgment. 6.21 For the foregoing reasons, this Court respectfully submits that the holding in the Nathan Sinkala 121 case is instructive in evidencing a persistent course of conduct by the Respondent amounting - to undue delay in the administration of due process. 6.22 As was held in the Supreme Court case of Nyampala Safaris and 4 Others Vs Wildlife Authority & 6 Others 131 wherein Mambilima, JS, as she then was, stated that: "A successful litigant should not be deprived the fruit of litigation as a matter of course." 7 CONCLUSION 7 .1 Upon due consideration of the Affidavit and evidentiary materials submitted in support of the instant Application, and being duly satisfied that the Petitioners have established evidence of the Respondent's wilful non compliance with the Court's enforcement processes and failure to satisfy the outstanding Judgment Debt, I hereby J12 CamScanner grant the Petition for a Receiving Order pursuant to Section 5 of the Bankruptcy Act, Chapter 82 of the Laws of Zambia and direct that the Official Receiver take custody of the Respondent's estate. DELIVERED AT LUSAKA THIS 24th DAY OF JULY, 2025 ~ - - ·········································· A. MALATA-ONONUJU HIGH COURT JUDGE J13 CamScanner