African Banking Corporation (Z) Limited v Plinth Technical Works Limited & Others (SCZ 8 128 of 2015) [2015] ZMSC 42 (9 September 2015)

.. • SELECTED JUDGMENT NO. 28 OF 2015 IN THE SUPREME COURT OF ZAMBIA HOLDEN AT NDOLA (CIVIL JURISDICTION) APPEAL NO. 104/2015 SCZ/8jl28/2015 BE~WEEN: AFRICAN BANKING CORPORATION (Z) LIMITED (T/ A BANK ABC) APPELLANT AND PLINTH TECHNICAL WORKS LIMITED 1ST RESPONDENT IAN HARUPERI JOSEPH MBAZZI MUGLUMA JOHN BOSCO KASASIRA VICTORIA SIKOMBE NEO MUBIANA 2ND RESPONDENT 3RD RESPONDENT 4TH RESPONDENT 5TH RESPONDENT 6TH RESPONDENT CORAM: Chibomba, Hamaundu and Kaoma, JJS On: 1st September and 9th September, For the Appellant For the 1st, Respondent: For the 2nd Respondent: Mr. G Pindani Pindani Advocates N/ A Mrs. A. D. A. Theotis Sampa Legal Practitioners For the 3rd, 4:h, 5th & 6th Respondents: N/ A - Chonta, Musaila & - Theotis Mataka & J2 JUDGMENT KAOMA,JS, delivered the Judgment of the Court. Cases referred to: 1. National Westminster Bank v Kitch (1990) 1 W. L. R. 1316 2. Royal Bank of Scotland v Etridge (2001) UKHL 44 3. Barclays Bank Pic v 0' Brien (1994) 1 AC 180 4. National Westminster Bank Pic v Morgan (1985) AC 180 5. National Westminster Bank Pic v Alfonso and Others (2012) EWHC 1020 6. Kalusha Bwalya v Chadore Properties and Ian Chamunora Nyalungwe Haruperi - SCZ Appeal No. 222/2013 7. Nkongolo Farms Li'Tlited v Zambia National Commercial Bank Limited, Kent Choice Limited (In Receivership) and Charles Huruperi , 8. Corpus Legal Practitioners v Mwanandani Holdings Limited - SCZ Judgment No. 500f2014 9. Aristogerasimos Vangeletos and another v Metro [;'1vestments Limited and others - SCZ Ruling No. 21 of 20 13 10. New Plast Industries v The Commissioner of Lands and another - SCZ Judgment NO.8 of2001 Statutes referred to: 1. High Court Act, Cap 27, s. 13 and Order 6, r. 1, O~der 30, r. 11 and r. 14 2. RSC 1999, Order 15, r. 4 and 5, Order 28, r. 8 and Order 88, r. 1 3. Companies Act, Ca.p 388, s.2 Other works referred to: 1. Fisher and Lightwood Law of Mortgage 14th Editicn, 2014 para. 1.3 2. Chitty on Contracts-General Principles, 1999, para 12-095 and 12-096, 26th ed para 772, 28th ed para 22-001 3. Ewan Mckendrick, Good on Commercial Law 4th Edition 2010 Bookwell, Finland pp. 671, 674 and 675 4. Osborn's Concise Law Dictionary, 12th Edition 2013 p. 79 5. Halsbury's Laws of England, Volumes 9, 12, and 32, 4th Edition 6. The Encyclopedia :JfCourt Forms and Precedents in Civil Proceedings, Lord Atkin, Volume 11, Butterworth & Co.(Publishers) Ltd, 1948 pp. 399-400 J3 This appeal is against a decision of the High Court at Lusaka dismissing the appellant's action in its entirety. The brief facts relevant to the appeal are that on 30th November, 2011 the appellant availed the 1st respondent a 12 months advance payment guarantee facility in the sum of KI4,510,466.62 for the purpose of performing on contracts awarded by the Ministry of Education and Ministry of Local Government and rehabilitation of selected urban roads in Lusaka. The facility was also for a sum of US$700,000 for a letter of credit facility. The borrowing was secured by a third party mortgage over Stand No. 11989, Chudleigh, Lusaka owned by the 2nd respondent. The third party mortgage was executed by the appellant, and the 1st and 2nd respondents. Prior to that, in a letter of undertaking and consent dated 5th December, 2011, the 2nd respondent had consented to the creation of a third party mortgage over his property in favour of the appellant. The facilities were also secured by a fixed and floating debenture dated 5th December, 2011 over all the assets of the 1st :-espondent and personal guarantees of the 3rd to 6th respondents dated 29th November, 2011. J4 On 15th November, 2012, before the expiry of the facility, the 1st respondent applied for and was granted a 1:ridging loan facility, continuation of a term loan, continuation of an advance payment guarantee facility and continuatio:J. of a letter of credit in the total sums of KI7,124,114.69 and TJS$700,000 to enable the 1st respondent meet working capital requirements relating to purchase of materials and hire equipment on the contract for the rehabilitation of selected urban roads in Lusaka, to commence works on a new contract with Zambia Revenue Authority of building semi-detache::l staff houses at Chirundu Border, and to enable the 1st respondent to cor_tinue to perfoJrmon contracts awarded by the Ministry of Education for constn.::.ctionof high schools in Chiengi District and in Samfya and for rehabilitation of selected urban roads in Lusaka. According to the appellant, the additional borrowing was also secured by the third party mortgage over Stand No. 11989 Chudleigh since the mortgage contained provisions indicating that it was continuing security for all future, ad::litional and further facilities and adva...ces; and by the personal guarantees of the 3rd to J5 6th respondents as clause 3 of the guarantees also stipulated that the guarantee was a..!d at all times shall be a continuing security and shall extend to cover the ultimate balance due at any time from the principal debtor to the creditor under or in respect of any of the facility documents. Admittedly, the appellant did not inform the 2nd respondent that it would be granting further advances or additional facilities to the 15t respo:1dent. The 15t respondent defaulted on its repayment obligations and the appellant effected several demands for the outstanding sum from the respondents. On 10th September, 2013, the 15t respondent through the 3rc. respondent, its Country director admitted its indebtedness to the appellant in the sum of Kll,OOO,OOOand proposed settlement in installments. Subsequently, the appellant commenced proceedings by originating summons against the SL,{ respondents seeking, for payment of all monies which as at 13th May, 2014 stood at KIL,203,809.41 from the main loan account, K4,491,237.66 from the main current account, K657,610.69 from the Treasury account and US$14,166.37 from the US current account with interest at the J6 agreed rate of 19.25% per annum and other charges due and owing to the appellant on the two facilities; foreclosure, possession, and sale of the mortgaged property; an order that the 3rd to 6th respondents honour their personal guarantees; any other relief the court may deem fit; and legal costs. The court process was served through substituted servIce by advertising. Only the 2nd and 4&.respondents filed affidavits in opposition, and admitted that the 1st respondent was availed the first facility and that the 2nd respondent consented to provide his property as security, but alleged that the first facility was paid in full and that the 2nd respondent did not consent for his property to be used as security for any further borrowing by the 1st respondent. Apparently, the other respondents could not be traced. At the hearing of the originating summons, only the appellant and the 2nd respondent attended. In his judgment delivered on 17th April, 2015, the learned trial judge first discussed the relief that is obtainable under Order 30, rule 14 afthe High Court Rules, Cap 27 and Order 88, rule 1 RSC 1999. The learned juc.ge then found that a claim by a mortgagcr or mortgagee would only fall within the realm J7 of a 'mortgage action', if and only if, such mortgagor or mortgagee relies on the mortgage in making his claim. The learned judge found support in the case of National Westminster Bank v Kitehl where the court was of the view that the claim for payment of money secured by a mortgage only falls within the definition in Order 88 rule 1(l)(a) of the RSC if the plaintiff is relying on the mortgage to make such claim ar_d that the mere fact that the moneys claimed are secured by a mortgage does not of itself bring the action within the definition of a mortgage action. The learned judge then opined that an criginating summons issued under Order 30, rule 14 of the High Court Rules and Order 88, rule 1 of the RSC cannot be used to make any claim which does not arise under a I:lOrtgage and that where a party seeking to enforce a mortgage also claims relief which do not arise under the mortgage, the appropriate course of action is 'generally' to commence the proceedings by way of writ of summons. Furthermore, the learned judge found as a fact that a third party mortgage was executed to secure the repayment of the initial loan facilities which the 1sl respondent obtainec: from the appellant J8 and that since the appellant's assertion was H'_atthe loan facilities specified in the facijty letter of 15th November, 2012 were also secured by the same third party mortgage, the claims for payment of the sums claimed, foreclosure, possessicn and sale of the mortgaged property would be said to have arisen under the mortgage notwithstanding the 2nd respondent's assertion to the effect that the mortgage only related to the initial facilities. Regarding the claim against the 3rd to 6th respondents, the judge found that it related to personal guarantees and had nothing to do with any mortgage and fell outside the scope of the remedies which could be granted in the action, as such it would be incompetent to consider the merits of the said claim; and that the appellant was at liberty to engage alternative court process to enforce the guarantees and the debenture. For that reason the judge declined the appellant's attempt to apply for leave to enter judgment in default c..gainstthe 3rd to 6th respondents. With regard to the claims relating to the mortgage and the 2nd respondent's defence that the loan facility secured by the third party mortgage was repaid in full, the learned judge found that the J9 third party mortgage was created in respect of specific loan facilities. He referred to the title of the mortgage deed and the letter of undertaking and consent signed by the 2nd respondent, both which he said confirmed that the 2nd respondent's consent was in respect of tr_e sums of K14,510,466,621.00 and US$700,OOO. OO and found that those were the specific sums the parties had intended to and were secured by the mortgage. The judge rejected the suggestion by the appellant that the use of the words 'other obligations' in the letter of consent meant that the consent extended to other subsequent faciEties and that in any event, 'other obligations' was too ambiguous an expression to mean anything specific in the absence of a satisfactory explanation as to what the parties referred to thereby. The judge was elso of the view, after examining the clauses of -he third party mortgage deed (to which his attention was drawn), on behalf of the appellant, in a bid to show that the mortgage was created as a continuing security, that the said clauses were not, in any way, intended to allow the 1st respondent to borrow at will from -he appellant, upon the security of the third party mortgage. 11J The judge also opined that though recital 2 of the mortgage deed made reference to "future facilities", it would be absurd to suggest that the mortgage was intended to give latitude to the 1st respondent to bor:-ow limitlessly without consulting the 2nd respondent and expect that all its borrowings would be secured by the third party mortgage and that this was not clearly the intention of the parties. The judge further found that it was incumbent upon the appellant to obtain further consent from the 2nd respondent and to create a further charge if it sought to secure :he subsequent loan facilities by way of a mortgage in respect of the subject property and tha- in the absence of such further charge, the third party mortgage would not cover those facilities. In addition, the judge found that smce the loan facilities secured by the third party mortgage were repaid in full, the appellant's claims against the 1st and 2nd respondents could not be sustained under that cause; and that the court could not order the 1st and 2nd respondents to pay the sums being claimed as the repayment was not secured by the mortgage. Ultimately, the judge J1: held that the claims for foreclosure, posseSSion and sale of the mortgaged property had no basis as the mortgage was redeemed when the facilities secured were paid in full. There was another defence which the 2nd respondent had raised. This was to the effect that the family :-elationship between him and his uncle Ellington Haruperi, on whose his request, he had executed the third party mortgage raised an irrebuttable presumption of undue influence which the appellant ought to have taken note of and taken steps to ensure that h:s consent to execute the mortgage was obtained without undue influence. The cases of Royal Bank of Scotland v Etridge2 and Barclays Bank PIc v 0' Brien3 were relied on. Counsel for the 2nd respondent had alSO argued that the appellant exerted undue influence on the 2nd respondent when it caused him to secure further facilities obtained by the 1st respondent when his understanding was that the third party mortgage was only intended to secure the initial facilities and put him in a manifestly disadvantaged position. The case of National Westminster Bank PIc v Morgan4 was quoted to support this 730 argument. The case of National Westminster Bank Pic v Alfonso and Otherss was also cite:! in which it was argued, that the court held that in order for a guarantee to be enforceable against a third party, the bank must have ensured that the guarantor was involved in the business and if not, that the guarantor obtained independent legal advice. However, the learned judge did not consider this defence which he found otiose because he had already found that the mortgage was paid off in full and discharged. The appellant has now appealed on three grounds. We shall first discuss ground 1 and then grounds 2 and 3 at once. The first ground alleged that :he trial judge failed to uphold the sanctity of contract when he held that it was incumbent upon the appellant to obtain further consent from the 2nd respondent and to create a further charge if it sought to secure the subsequent loan facilities by way of mortgage of the subject property contrary to the express provisions of the duly signed and registered third party mortgage. In support of this ground, counsel for the appellant has cited a number of authorities which we will take into account in our judgment. He quoted Fisher and Lightwood's Law of Mortgage, 14th J13 edition, 2014 paragraph 1.3 at page 4 which defines a mortgage as a --ormof security created by contrac: conferring an interest in real or personal property defeasible UP0::1 performing the condition by paying a given SurL of money with or without interest or on performing some other condition. He also cited Chitty on Contracts, 26th edition, Volume 1, paragraph 772 where it is stated that where the agreement of the parties has been reduced into writing and the document containing the agreement has been signed by one or bob of them, it is well established that the parties signing will be bo".md by the terms of :he written agreement whether or not he has read them or whether or not he is ignorant of their precise legal meaning. He further cited Chitty on Contracts, VOlume 1, 28th edition, paragraph 22-001 where it is stated that a party to the contract must perform exactly what he undertook to dc and when an issue arises as to whether performance is sufficient, the court must first construe the contract. He then submitted, in brief, that the terms and conditions of the third party mortgage which was duly signed by the 1st and 2nd J14 respondents must be enforced. That the learned trial judge misdirected himself by holding that further consent of the 2nd respondent was required in order for the appellant to rely on the third party mortgage as security to cover the subsequent facility, and was wrong in failing to uphold what the parties had expressly agreed in the third party mortgage. It was also argued that nowhere m the mortgage deed was consulting the 2nd respondent made a condition to borrow on the held security and that the 2nd respondent's cansent to pledge his property as security was without any restriction and the intention of the parties is discernible from the document itself. Counsel also relied on our recent decision in the case of Kalusha Bwalya v Chadore Properties and Ian Chamunora Nyalungwe Haruperi6• It was further submitted that as the mortgage deed expressly provided that it was up to the 2nd respondent as mortgagor to request for the discharge of the mortgage, the mortgaged property could only cease being continuing security once the 2nd respondent had notified the appellant, which he never did at the time the appellant advanced the additional facility to the 15t respondent. J15 It IS also the appellant's argument that there being a duly signed mortgage deed as a binding contract and continuing secu.rity, extrinsic evidence should not have been admitted to vary or contradict the express terms 0:- the contrac:; and that the letter of undertaking and consent was signed by the 2nd respondent before the mortgage deed, hence what was of paramount consideration was the mortgage deed. In response, counsel for the 2nd respondent submitted that the agreement between the parties is not to be in:erred from the third party mortgage alone, but also from the letter of consent and the facility letter of 30th November, 2011. We were referred to Chitty on Contracts-General Pr.nciples 1999. paragraph 12-095 regarding the scope of the parole evidence rule. It was also submitted that the third party mortgage was executed by the parties in order to secure repayment of the initial loan facility, which is evident from the mortgage deed, the facility letter, and the certif:.cate of title of the mortgaged property. That it was not in dispute that the sums secured by the third party mortgage were repaid by the 1st respondent or that the appellant J16 did not inform the 2nd respondent about the further facilities which were provided to the 151 respondent. It was further argued that the words 'other obligations' used in the mortgage deed and consent letter are vague in the absence of a satisfactory explanation as to the meaning; and that following the payment of the sums secured by the mortgage the attachment of the 2nd respondent's property ceased. We were also referred to Ewan Mckendrick, Good on Commercial Law 4th Edition 2010 at pp. 671, 674 and 675. It was then argued that the only existing obligation at the time of execution of the mor:gage deed was repayment of the sums comprised in the initial facility and not the later facilities availed to the 151 respondent without the 2nd respondent's consent. It was also contended that clauses 2 and 8 of the mortgage deed did not give the 151 respondent a green light to borrow at will on the strength of the third party mortgage; that the parties to the mortgage did not intend that the same extends to the 151 respondent's indebtedness which would arise later; and that the appellant ought to have obtained further consent from the 2nd respondent before securing later facilities or ought to have created a J17 further charge, even if the mortgage was created as a continuing security (which is deded). We have considered the arguments and the authorities cited in support of the parties' respective positions on this ground of appeal. The fact that the apI=ellant availed the 1st resp,::mdent a 12 months advance payment guarantee in the sum of K14,51O,466.62 and the sum of US$700,000.00 for 12 months letter cf credit facility; and that the 2nd respondent consented to the creation of a third party mortgage over his property, being Stand No. 11989 Chuldlegh, Lusaka as security for the said faci ity is not in dispute. The 2nd respondent's argument is that the mortgage only related to this first facility. We agree with the 2nd respondent and the learned trial judge that both the first facility letter dated 30th November, 2011 and the third party mortgc..ge deed dated 12th December, 2011 mention the specific sums of K14,510,466.62 and USS700,000.00 as the actual sums advanced and secured by the mortgage. So does n"_esigned and sealed letter of undertaking and consent delivered by the 2nd respondent dated E,th December, 2011. Jl3 In our view, however, there is more to the third party mortgage than the 2nd respondent admits. Clearly, the action in the court below centered on the construction of the d::Jcuments that were before the court. It is trite that the interpretation of a written document is a matter of law for the court. The function of the court is to ascertain wha~ the parties meant by the words which they have used; to declare the meaning of what is written in the instrument, not of what was intended to have been written; and to give effect to the intention as expressed. The object is to discover the real intention of the parties and the intention must be gathered from the written instrument read in the light of such extrinsic evidence as is admissible for the purpose of construction. It is not permissible to guess at the intention of the parties and substitute the presumed for the expressed intention (Halsbury's Laws of England, Volume 12, 4th Edition at paras 1460 and 1461). In this particular case, as rightly observed by the learned trial judge, recital 2 in the mortgage deed states that the mortgage over the properties in favour of the Bank was to secure the repayment of the principal monies and payment of all interest, costs, commission J19 and all other accessones thereon, whether under that facility or otherwise including future facilities or additional, further or otherwise under any facility as may from time to time be varied, extended or replaced for which the 15t respondent may be or become liable to the Bank on any current or other accounts or in any manner whatsoever. Further, recital 3 read that the customer and the mortgagor had agreed to accept the facility ane: the other accommodation granted to the customer by the Bank, upon having such advances secured in the manner therein after appearing. Coming to the operative part of the mortgage deed, in clause 1, the customer covenanted with the Bank to pay and discharge on demand all monies and liabilities whether certain or contingent then or thereafter owing or incurred to the B311kfrom, or by the customer including present and future facilities or advances whether additional, further or otherwise under any facility as from time to time varied, extended or replaced upon any current or other account or in any manner whether alone or jointly with any other J20 person and whether as principal or surety and in whatever name or firm including ... In clause 3, the mortgagor as beneficial owner and in consideration of the sums of ZMW14,510,466,621.00 and US$700,OOO. OO(the receipt of which the customer and mortgagor acknowledged) demised unto the Bank the property in issue together with all the unexhausted improvements thereon subject to the provisions relating to redemption therein contained provided always that if all the monies thereby secured and therein before covenanted to be paid shall be duly paid then the Bank shall at the request and cost of the mortgagor and customer execute a discharge of the mortgage relating to the property. And in clause 4, it was agreed that the mortgagor would at any time if and when required by the Bank to do so, execute to the Bank or as the Bank shall direct, such further legal or other mortgages or charges as the Bank shall require of, and on the mortgagor's estate and interest in the premises comprised in the said deposited deeds and writings or which may thereafter be acquired by and belong to the mortgagor (including any vendor's J23 obligations" is not the same as "other facilities" and found that the words "other obligati:ms" is too ambiguous an expression to mean anything specific in the absence of a satisfactory explanation as to what the parties referred to thereby. In our view, there can be no doubt from a reading of all the above mentioned covenants in the mortgage deed, using the grammatical and o:-dinary sense of the words, that the 2nd respondent agreed to his property being used as security not just for the initial facility granted In the specific sums of K14,510,466.62 and US$700,OOO. OO.but also as continuing security for any further facilities or future advances. The question is whether that was the real intention of the parties. It is quite clear that recital 2 in the mortgage deed, which the learned trial judge quoted in full, supports the operative clauses in the mortgage deed and the appellant's contention that the security was a continuing security and covered further advances and other banking facilities, including future facilities. In the letter of undertaking and consent which the 2nd :-espondent voluntarily and willingly executed, be indicated that he J24 was fully aware of (i) the nature and extent of the security intended to be created, (ii) the 1st respondent's obligation to redeem or settle the facility that had been availed to it by the appellant, and (iii)the appellant's recourse to exercise its rights of enforcement over the property in the event of the customer's default in complying with its repayment obligations and other obligations to the bank (underlining ours for emphasis). As we have already said the letter of undertaking and consent was written on 5th December, 2011 before the execution of the mortgage deed and as submitted by counsel for the 2nd respondent the document should be read together with the first facility letter and the mortgage deed. When this is done the oeaning of the words "other obligations" b:>th in the letter of undertaking and consent and in the mortgage deed become very clear and can easily be interpreted to mean 'other facilities' or ':-urther advances', We do not see any ambiguity at all in these words and the real intention of the parties when they signed the mortgage deed can very easily be discerned from the documents, which is that the security was continuing security for further facilities or further advances. J25 Counsel for the 2nd respondent has also spiritedly argued that because of the relationship that existed between the 2nd respondent and his uncle who was involved in a business transaction with the 1st respondent and on whose request he executed the third party mortgage, there was an unirrebutable presumption of undue influence and that the appellant should have ensured that the 2nd respondent was advised to seek independent legal advice especially that he did not benefit from the facilities that were granted to the 1st respondent by the appellant. On the other hand, it IS the appellant's argument that the Issue of undue influence was :-lot pleaded in the affidavit in opposition to originating summons and therefcre, cannot be raised now and that there is no cross-appeal on the issue. We agree with the appellant that undue influence was not :-aised by the 2nd respondent in his affidavit in opposition but there was evidence in cross-examination on the relationship between him and his uncle and in her submissions, counsel for the 2nd respondent had made the same argument as she has done now. J26 However, we agree with the appellant that the learned judge did not determine the issue cn the merits and that there is no cross-appeal. Even if there was, the defence would still fail. Undue influence IS defined by Halsbwy's Laws of England, 4th edition, Volume 9 as "the unconscientious use by one person of power possessed by him over another in order to induce the other to enter into a contract." And in allowing the appeal in the case of Nkongolo Farms Limited v Zambia National Commercial Bank Limited, Kent Choice Ltd (In Receivership) and Charles Hurupen7, we held, inter alia: "(5) (6) The law imposes on a creditor a dli.ty to take steps to ensure that not only does a borrower or debtor not exercise undue influence and or make false representation to a surety, but c.lso that the creditor has of the a duty to ensure that a surety has adequc.te understanding nature and effect of the transaction in question. The creditor has the obligation to inform itself as to whether or not there is a rebtionship of trust and confidence between the borrower and guarantDr, and the attendant risk to abuse that relationship. The Bank has the further obiigation to ensure that the guarantee did not in any way exercise undue influence on ~he guarantor. " As the learned trial judge observed, undue influence makes a contract voidable at law. The question is did the 2nd respondent's uncle exert any undue influence on him before he executed the third party mortgager We do not think so. It is patently clear that J27 the 2nd respondent does not dispute sIgmng the mortgage deed which he admitted he did freely and voluntarily. What he has a problem with is the further facility which was obtained by the 1st respondent without his consent. Clearly, the English cases heavily relied upon by for the 2nd respondent are inconsequential as circumstances in those cases were totally different from this case. What remains for us to resolve is simply whether the appellant discharged its duty to ensure that the 2nd respondent had adequate unc.erstanding of the nature and effect of the third party mortgage. This is in view of the fact that the third party mortgage was not limited to the principal sums mentioned therein but also provided cover for further facilities or further advances. The 2nd responc.ent testified, in the court below, that he is a businessman and he holds a Bachelor of Science degree in economics; that he had before pledged title deeds as security to the appellant bank before the mortgage in question; that he had signed a mortgage deed before; and that it was prudent for him to read before signing. The 2~drespondent had also testified that he only J23 read the cover of the mortgage deed because his knowledge of the transaction and the consent letter he signed were for specific sums. From this evidence, and even if there was no evidence that the appellant had advised the 2nd respondent to seek independent legal advice, it is discernible that the 2nd respondent is an adult of full capacity who is well educated, and who is highly literate and well exposed, having executed similar contracts or mortgages with the appellant bank previously. The 2nd responc.ent may not have oenefitted from pledging his property as security, but he signed the mortgage deed voluntarily and willingly and without any pressure from the appellant or his uncle a.ld, he cannot be heard to argue that the appellant did not ensure that his consent to execute the mortgage was obtained without undue influence. In our view, there is also no evidence to show that the appellant misled the 2nd respondent into securing further facilities obtained by the 1st respondent when his understanding was that the third party mortgage was only intended to secure the initial facility. The burden was on tl'"e2nd respondent to prove other vitiating J29 factors such as fraud, mistake or misrepresentation that could have rendered the mortgage voidable, but he failed to do so. In the Kalusha Bwalya6 case which, althcugh not on all fours, IS strikingly similar to this case and to which the 2nd respondent was also a party, we provided guidance as to tr_econstruction of the intention of the parties when executing written contracts. In that case, the appellant alleged that he executed a contract of sale and assignment in favour of the respondents as security for the sum of US$26,250 that he got from them. He argued that the intention of the parties was not to transfer or sell his house situate in Lusaka's Woodlands area but simply for them to hold it as security. We held, among others, that the intention of the parties was discernable from the documents signed by the parties freely and voluntarily as the acknowledgment of receipt on the record of appeal confirmed. Tr_atthe parties chose to embody their agreement in two documents, namely, the contract of sale and the deed of assignment and they were bound by those documents in the absence of fraud, mistake or misrepresentation. We also reiterated the position of the law that extrinsic evidence is not generally J3C admissible to add to, vary, subtract from, or contradict the terms of the written contract. In this case, even if the operative part of the mortgage deed in clause 4 mentioned further legal or otr_er mortgages or charges, we can only agree with counsel for the appellant that there is no provisi~n in the mortgage deed that required the appellant to obtain consent from the 2nd responden+ before any further advance or facilities could be availed to the 1st respondent. The 2nd respondent agreed to the terms of the mortgage deed and he is bound by it. Indeed, it is axiomatic that the sanctity 0: contract must be preserved and agreements which are freely and voluntarily entered into by the parties must be enforced by the cou::-tsof law. Indeed, it was incumbent upon the 2nd respondent to notify the appellant as mortgagor of his wish to discharge the mortgage before the appellant advanced the additional facility to the 1st respondent. Therefore, we find merit in ground one of this appeal. The second ground of appeal attacked the trial judge for holding that there was no mortgage and consequently dismissing the entire action on ground that it ought not to be commenced as a J31 mortgage action ignoring the Deed of Debenture creating a fIxed and floating charge ever the 1st respondent's assets which was also part of the security being enforced. In support of this ground counsel for the appellant fIrst quoted the defInition of 'debenture' and 'charge', in section 2 of the Companies Act, Cap 388, in Osborn's Concise Law Dictionary, 12th Edition 2013 at p. 79 and, in Fisher and Lightwood Law of Mortgage 14th Edition 2014 pa~agraph 1.3 and reiterated that the third party mortgage covered the subsequent additional, further and future facilities. The gist of his argument is that the action was properly commenced as a mortgage action and that even if the trial judge found that the claimed sums were not secured by the mortgage, he still should have held the 1st respondent liable under the action because there was c. signed debenture deed which is a charge on the assets of the 1st respondent and charges cover all forms of security which if stretched includes personal guarantees. It was also argued that the judge's dismissal of all claims and suggestion of recovery by recommencing the action by writ is erroneous in view of the debenture whose terms also covered future 750 facilities as it was also a continuing security. Further, that the judge having ordered that the deponents of the affidavits be cross- examined, essentially turned the action into a trial, and the affidavits stood as pleadings, while the exhibits were the documents relied on in line with Order 28 rule 8 RSC, so no different objective could have been achieved by commencing the action by writ. On the other hand, the essence of the 2nd respondent's submission on this ground is that the facilities intended to be secured by the mortgage were paid in full, so the appellant could not seek orders for foreclosure, possession and sale of the mortgaged property, hence the trial judge holding that there was no mortgage. Further, that the wording of Order 30, rule 14 suggests that an originating summons can only be taken pursuant to that Rule if the action is strictly a mortgage action and that a mortgage action is distinct from an action to enforce a debenture. The case of National West Minister Bank v Kitch} is again reEed on. The third ground of appeal attacked the trial judge's holding that the claim for enforcement of personal guarantees against the 3rd to 6th respondents could not be made under a mortgage action 751 for being outside the scope of the remedies which could be granted under a mortgage action commenced by originating summons. The main argument made by counsel for the appellant based on Order 30, rule 11 of the High Court Rules is that enforcement of personal guarantees require the interpretatio::l of the terms and provisions of the written documen- in order to pronounce the rights of the parties; that the appellant in its claims was not only enforcing the irrevocable personal guarantees but the third party mortgage and debenture which could properly ':Jedone under Order 30, rule 14; and that a guarantee is merely secondary security and a judgment creditor only turns :0 the guarantee if the primary security is not adequate to payoff the debt. Alternatively, it was contended, on the authority of the case of Corpus Legal PractitIOners v Mwanandani Holdings LimitedB that there would be multiplicity of actions if parties were to apportion their claims in piecemeal, and that a guarantee could be enforced together with other relief in the manner commenced in this matter. In response, counsel for the respondent argued that the claim for enforcement of the personal guarantees coul::inot be made J34 under a mortgage action as a personal guarantee is neither a mortgage nor a charge so as to entitle a beneficiary of the guarantee to remedies of a mortgagee or charge holder. Halsbury's Laws of England, 4th Edition, ~Tolume32 paragraph 804 was cited as authority where the learned authors explain what a mortgage action is. It was argued that in this case, the appellant did not rely on the :nortgage to enforce the personal guarantees; -hat none of the relief provided for under Order 30, rule 14 of the High Court Rules can be used to enforce a guarantee and so Order 6 rule 1 of the High Court Rules becomes applicable. The cases of Aristogerasimos Vangeletos and another v Metro Investments Limited9 and New Plast Industries [;The Commissioner of Lands and anotherlOwere cited for this argument. We have considered the arguments by the appellant and 2nd respondent on the two grounds of appeal. As we have already said, the rest of the respondents have not participated in this appeal and they failed to defend the matter in the court below even though the 4th respondent had filed an affidavit in opposition. However, we are alive to the general rule that joinder of parties, whether as plaintiffs • J35 or as defendants is allowed where the right to relief is in respect of or arise out of the same transaction or series of transactions; and there is some common question of law and fact (Order 15 r. 4 RSC). And in the same way, any number of causes of action, whether joint or separate, may be joined in one action, subject to the power of the court to order that the action be confined to those causes of action that can be conveniently disposed of together or that any cause of action be excluded or that separate trials be held, if the joinder of causes of action or of parties, as the case may be, may embarrass or delay the trial or is otherwise inconvenient (Order 15, r.5 RSC). The principal objective of these provisions is to ensure that a :nultiplicity of actions is avoided where all issues can be brought together properly and conveniently and dealt with in one action. We are also alive to the fact that applications by originating summons are appropriate where the decision depends on the construction of an instrument or statute or the granting of relief in mortgage proceedings; and that the court has refused in practice on an originating summons to decide questions of priority or disputed . ' . J36 questions of fact on the ground that procedure by originating summons is only imended for the decision of simple questions of fact; so that where there are several conflicting affidavits such procedure is obviously neither convenient nor expedient (The Encyclopedia of Court Forms and Precedents in Civil Proceedings, Volume 11, pp. 399-400). It also seems t::>us that originating summons IS appropriate for determining questions of fact pertaining to questions of construction, but not for determining questions both of fact and construction where a decision on the latter would not necessarily put an end to the question. When, however, it appears to the court that its decision on the construction of a written instrument will satisfy the proceedings then at issue, the court will not refuse a decision on the possibility of further litigation arising in connection with matters not directly before it (The Encyclopedia of Court Forms and Precedents in Civil Proceedings, p. 400). In addition, where, in a matter begun by originating summons, it appears to the court that the matter should have been commenced by writ of summons, the court has power under Order iii '. .• 755 28, rule 8 RSC, at a:1Ystage of the proceedings, to order that the proceedings should continue as if the matter had been so begun and may, in particular, order that any affidavits shall stand as pleadings and give fu::-therdirections on the conduct of the matter. Even though the principal debtor is the person primarily liable :0 the creditor for the debt or default answered for by the surety and even if the principal debtor is not a party to the surety's contract to be answerable to the creditor although sometimes bound by the same instrument as his surety, it is not uncommon for claims in a mortgage action to be joined to a claim for enforcement of personal guarantees even though a guarantee is a contract ancillary and subsidiary to some other contract or liability on which it is founded, but without which it must fail. In this case, a debenture and personal guarantees do not, strictly speaking, fall under a mortgage action, but the question that was before the court below was really one of construction of the documents executed by the parties to secure the facilities granted to the 151 respondent and the rights to the relief claimed arose out of the same transaction or series of transactions as the facilities were • • J38 secured by the third party mortgage, personal guarantees and the debenture. Further in our view, the court's decision on the construction of the written instruments would have satisfied the proceedings then at issue and avoided a multiplicity of actions. In the case of Corpus Legal Practitioners v Mwanandani Holdings Limited8, we took the view, looking at the circumstances of the case, that to insist that the claim for removal of the caveat must be brought in a separate action, commenced by way of originating summons, would aoount to asking that different claims in that case, although involving the same parties and arising from the same set of facts be severed and brought in separate actions which in turn, would amount to multiplicity of actions, a practice which we have always frowned upon. This is still a sound legal position. The appellant's argument that as the court had allowed the cross-examination of the deponents of the affidavits, which was tantamount to a tricJ in which any contentious issues could have been heard and determined, there would have been no need for the appellant to recommence the matter by writ in line with Order 6 rule 1 of the High Court R:.lles has merit, especially that the causes of • • • J39 action that were joined could be conveniently dealt with together and involved simple questions of fact. The cases of Aristogerasimos Vangeletos and another v Metro Investments Limited9 and New Plast Industries v The Commissioner of Lands and anotherlO relied on by the 2nd respondent are not available to him. In our view, the learned trial judge should also have entered judgment as requested by the appellant both -~nder the debenture and personal guarantees which we:-enot defended, particularly that section 13 of the High Court Act, Cap 27 mandates the court or the judge to resolve all issues in dispute between the parties. For these reasons, we find merit in grounds two and three of the appeal. All the three grounds of appeal having succeeded, the sum total is that the appeal is allowed. Consequently, judgment is hereby entered in favour of the appellant against the 151 respondent for the sums of KI4,203,890.41 from the main loan account; K491,237.66 from the main current account; K657,610.69 from the Treasury account (all in rebased Kwacha) and US$14,166.37 from the US$ current account, respectively, together with contractual interest at 19.25%, to be paid within 30 days from date hereof. --- -_.:. ~-:: = ~~.~ thaI In the event the judgment debt and interest remain unpaid at the expiry of the stated period, then the 2nd respondent shall deliver vaca.p.t,Possession of the mortgaged property being Stand No. 11989 situate in the Lusaka Province of the Republic of Zambia to the appellant who shall be at liberty to foreclose and exercise its right of sale. Further, the appellant shall also exerCIse its right as debenture holder over the assets of the 15t resp:mdent in settlement of the judgment debt. Should the:-e be any amount due after the sale of Stand No. 11989, Chudleigh, Lusaka and enforcement of the debenture, then the 3rd, 4th, 5th, and 6th respondents shall pay the difference as guarant~rs. We award costs to the appellant, to be taxed III default of agreement . ...-=z==g>c? C_,-- H. CHIBOMBA SUPREME COURTJUDGE ( t c !J E. M. HAMAUNDU SUPREME COURTJUDGE I ;-.~:~----- ~- -~. SUPREME COURTJUDGE