Agrilink Limited v First National Bank Zambia Limited and Hollard Insurance Zambia Limited (2020/HPC/0840) [2024] ZMHC 108 (14 February 2024)

IN THE HIGH COURT FOR ZAMBIA AT THE PRINCIPAL REGISTRY COMMERCIAL DIVISION HOLDEN AT LUSAKA (Commercial Jurisdiction) 2020/HPC/0840 BETWEEN: AGRILINK LIMITED AND PLAINTIFF FIRST NATIONAL BANK ZAMBIA LIMITED 1 st DEFENDANT HOLLARD INSURANCE ZAMBIA LIMITED 2 nd DEFENDANT Before Hon. Mr. Justice Bonaventure C Mbewe in Open Court For the Plaintiff liSt Defendants 2 11d Defendant Mr. A . Roberts of Messrs. Alfred Roberts & Company Mr. K Wis himanga of Messrs. AMW & Comp any Ms . M. Tembo ofMesers. Willson & Comhill Company JUDGMENT CASES REFERRED TO: 1. Stanbic Bank Zambia Limited v A. S and Enterprise and 2 Others (2008) ZR 2 5 9; Jl 2. Madison General Insurance Limited v Avril Cornhill and Michael KalomaAppeal 9/2017; 3 . Thomson v Weems and Others (1884) AC Val IX; 4. Gemstar Holdings Limited vAfgri Corporations SCZ 183 of2014; 5. Stanbic Bank Zambia Limited v Bruce Mwewa Appeal No. 112 of 2020; 6. Yonah Shimonde, Freight and Liners Ltd v Meridien Biao Bank (Z) Limited SCZ No 7 of 1999 I (1999) ZR page 4 7; 7. Cape Brandy Syndicate v Inland Commissioners ( 1921) ALL ER 64· ' 8. Zambia Revenue Authority v Stallion Motors Limited, African Cargo Services Limited 2009/ HPC/ 0575; 9. Citizens Economic Empowerment Commission v Mercy Mwambazi, Sunday Mwambazi 2016/HP/2230; 1 0. Savenda Management Services v Stanbic Bank Zambia Limited Selected Judgment No 10 of 2018; 11. African Banking Corporation Limited v Plinth Technical Works and 5 Others SCZ Judgment No 28 of2015; 12. Printing and Numerical Registering Co v Sampson (1875) L. R 19. Eq. 462; 13. Kalusha Bwalya v Chadore Properties and Ian Chamunora Nyalugwe Haruperi Selected Judgment No 20 of 2015; 14. Phillip Mhango v Dorothy Ngulube & Others (1983) ZR 61; 15. Musingah Daka (1974) ZR 37; 16. J. Z Car Hire Limited and Malvin Cala Seirocco Enterprises J2 Limited SCZ Judgment No 26 of200); 17. Khalid Mohamed v the Attorney General (1982) ZR 49; 18. Christopher Lubasi Mundia v Sentor Motors Limited (1982;) 19. National Milling Corporation v Angela Chileshe Bwalya Silwamba Appeal No 1717 of 2015 (unreported); 20. Wilson Masauso Zulu us Avondale Housing Project Limited (1982) ZR 172; 21 . National Drug Company Limited and Zambia Privatization Agency v. Mary Katongo Appeal No. 79/2001; 22. Colgate Palmolive (Z) Inc v Shemu and Others Appeal No. 181 of 2005; 23. L'Estrange v F Graucob Ltd (1934) 2 KB 394; 24. Parker v South Eastern Railway (1877) 2 CPD 4; 25. J. Z Car Hire Limited v Malvin Chala, Scirocco Enterprises Limited SCZ Judgment no 26 of 2002. LEGISLATION AND OTHER AUTHORITIES REFERRED TO: 1. H . G Beale's 'Chitty on Contracts'. Volume 2, 28th Edition, London Sweet and Maxwell, 1999; 2. H. G Beale's, 'Chitty on Contracts', Volume 1 26th Edition, London Sweet and Maxwell; 3. Ewan Mckendrick, Contract Law, 12th Edition, Palgrave Law Masters, 201 7; 4. Halsbury's Laws of England, Volume 9 (1) Sweet and Maxwell; 5. Banking and Financial Services Act No 7 of 2017; 6. Insurance Act No. 38 of 2021; J3 7. Value Added Tax Act Chapter 331 of the Laws of Zambia (as amended by S. I 29 of 2009); 8. Value Added Tax {Amendment) Act No 12 of2017; 9. Gazette Notice Number 46 of 2014; 10. Gazette Notice Number 663 of 2018; 10. Law Reform (Limitation of Actions) Act 1939, Chapter 72 of the Laws of Zambia. 1.0 INTRODUCTION AND BACKGROUND 1.1 This Judgment is delivered on an action brought by the Plaintiff Agrilink Limited, against First National Bank Zambia Limited as 1st Defendant, and Hollard Insurance Zambia Limited as 2 nd Defendant (the Defendants), in respect of monies it claims it was over charged on insurance premiums on lease facilities provided to it by the Defendants and a tax refund it claims it lost out on. 1.2 By a Writ (Amended) dated 23rd February 2021, the Plaintiffs claim is for: (a) The Plaintiffs claim is a refund of the sum of US $ 17, 508, 39.00 being over-charge on insurance premiums debited to the Plaintiffs Bank account with the 1 st Defendant that were paid or partially paid by the 1st Defendant to the 2 nd Defendant in respect of a comprehensive motor insurance no UCN: 38367680 dated for two motor vehicles availed to the Plaintiff through an Asset and Finance Agreement dated 3 rd November J4 (b)An order or declaration that the Defendants ought to have based the monthly premiums on the retail value of the motor vehicles and not the Insured Sum for a brand-new vehicle in accordance with Clause A 8 of the contract of insurance executed by the Plaintiff and 2 nd Defendant (c) An order or declaration that such an arrangement amounted to an unfair contract term under section 118 of the Banking and Financial Services Act no 7 of 2017 (d)Refund by the 1st Defendant of US$ 30, 467.12 or such other amounts debited to the Plaintiffs Bank account for Value Added Tax (VAT) without proper tax invoices which has resulted in the plaintiffs failure to claim a VAT refund from the Zambia Revenue Authority. An order or declaration that the 1 st Defendant breached provisions of section 7 (3) of the Value Added Tax {Amendment) Act no. 12 of 2017 (e)An order that the debiting of the Plaintiffs account with value added tax (VAT) on insurance after 1st January 2016 contravenes section 4 (2) of the Insurance Premium Levy Act No 21 of 2015 and that the Defendants refund the Plaintiff the sum of US$ 17, 786.45 or such amount as shall be due {!) Refund by the 1st Defendant of US$ 6, 039.00 debited to the Plaintiffs Bank account allegedly for debt collector charges (g) Damages for loss of business arising out of the Plaintiff being listed with the Credit Reference Bureau by the 1st Defendant (h)An interim injunction restraining the 1 st Defendant or its agents from possessing motor - vehicle Land Rover Discovery ALZ 41 JS (i) Costs and interest on the monies claimed; and Further and / or alternatively relief 2.0 PLEADINGS Plaintiff's Statement of Claim 2.1 In its Statement of Claim (Amended) of 23rd February 2021, the Plaintiff who is a private limited liability company, duly registered and incorporated under the Companies Act of Zambia and is involved in farming and agricultural activities, states that it and the 1 st Defendant being a duly registered commercial Bank entered into a Vehicle and Asset Finance Agreement (the VAF Agreement), on the 3 rd of November 2014. 2.2 The said agreement was, according to the Plaintiff, for the purchase of two brand new motor vehicles: a Landcruiser V8 registration number AJD 4371 and a Land Rover Discovery registration number ALZ 41. 2.3 According to the Plaintiff, the Landcruiser V8 cost United States Dollars (USD) 83, 376.46, the total of which was USD 61, 500.00, together with finance charges of USD 21, 261.46. The same was to be paid by the Plaintiff within 5 years under the V AF agreement. 2 .4 The Plaintiff, also states that the 1 st Defendant through the 2 nd Defendant, arranged comprehensive insurance cover for the two vehicles in accordance with clause 5 of the V AF agreement for which the Plaintiff was requested to sign Comprehensive J6 Insurance Policy number UCN: 38367680 with the 2nd Defendant. 2 .5 The Plaintiff, states that the VAF agreement in clause 5.3 stated: "In respect of any insurance policy arranged by us we will: 5.3.1 - Disclose the cost to you of any insurance supplied 5.3.2 - Give you a copy of the insurance policy, explain the terms and conditions thereof to you and you confirm that you have understood the same 5.3.3 - At our request, you authorize us to pay any premiums due under that policy during the term of the Agreement on your behalf as they fall due and to debit you monthly with the amount of such premiums The Plaintiff further quoted clause A8 on page 2 of the contract of Insurance, which provided; 8 "Maximum Indemnity" the current sum Insured specified in the Certificate of Insurance or the Retail Value, whichever is lesser 2.6 The Plaintiff states, in its statement of claim, that it, in 2017 noticed that the 1s t Defendant was debiting its bank account with unusually high amounts charged for monthly insurance premiums, which amounts were USD 420.00 per month per vehicle. J7 2 . 7 Following this realization and according to the Plaintiff, it made numerous complaints disputing the high premium payments and the 1st Defendant adamantly maintained via a letter dated 24th December 2019, as well as e-mail correspondence, that the monthly premiums were based on the insured sum or "show room price of a brand-new vehicle" and not on the diminishing annual retail market value of the vehicle. 2 .8 The Plaintiff, argues that its understanding of the words • "whichever is lesser", in clause A 8 of the Comprehensive Policy of Insurance, meant that the diminishing market value on a yearly basis should be the basis of the premiums, not the insured sum or show room price of a brand-new vehicle. 2.9 The Plaintiff argues that the Defendants maintained that the vehicles were insured at the insured sums of brand-new vehicles and yet in the event of a claim based on loss, the pay out would not be based on the same value, but the retail market value. 2 . 10 The Plaintiff, states that the Defendants over-charged the Plaintiff insurance premiums in the amount of USD 1 7, 508.39 on the two vehicles, which arrangement amounts to an unfair contractual term and deemed to not be binding in accordance with section 118 of the Banking and Financial Services Act No 7 of 2017. 2 . 11 According to the Plaintiff, the 1 s t Defendant also continuously debited the Plaintiffs bank account with Value Added Tax (VAT), which VAT the Plaintiff failed to reclaim from the Zambia J8 Revenue Authority (ZRA), because the 1 st Defendant did not issue the Plaintiff any tax invoices as required by the provisions of section 7 (3) of the Value Added Tax (Amendment) Act No 12 of 2017, as read with section 18 (3) of the Value Added Tax Act, save only for two tax invoices dated 16th June 2019, for VAT amounts ofUSD 1,274.36 and Kl, 084.84. The Plaintiff further states that the 1 st Defendant did not avail the bank statements for these charges until the year 2019, at which time such statements could not be used to claim the VAT, as they fell short of the criteria required by the ZRA in reclaiming VAT payments. 2.12 The Plaintiff, avers that it lost 16% reclaimable VAT on the value of the new vehicles, which cost USD 83, 376.00 and USD 108, 168 respectively. The said amounts broken down as: USD 13, 340. 00 and USD 1 7, 306 totaling USD 30, 46 7 .12 which the 1 st Defendant is liable to refund the Plaintiff. 2.13 It is stated in the Plaintiffs pleadings, that by the 1 st Defendants Bank statements, which statements were printed on 24th October 2019, the following is posited by the Plaintiff: 1. That the Plaintiffs Bank statement was debited with "value added tax on insurance" after 1 st January 2016 contravening section 4 (2) of the Insurance Premium Levy Act No. 21 of 2015. Which prohibited VAT on insurance. J9 11. That the total VAT on insurance debited was USO 7, 587.00 for the Land Cruiser for the years 2016 - 2019. 111. That the total VAT on insurance debited was USO 10, 199 .45 for the Land Rover Discovery for the years 2016 - 2019. 1v. And the Plaintiff claims refunds for a total of USO 17, . 786.45 or such amount as shall be due. 2.14 According to the Plaintiff, the purported lease statements 1n possession of the 1 st Defendant with certain details relating to VAT and certain tax invoices, were never brought to the Plaintiff's attention prior to this action. 2.15 The Plaintiff also claims that the 1s t Defendant further debited the Plaintiffs Bank account with purported debt collector charges totaling USO 6, 039.00; and at no time whatsoever did the Plaintiff receive any demand letters or visits from any debt collectors to warrant such charges on its account. 2.16 The Plaintiff further states that it, without justifiable cause or formal written notice has been listed by the 1st Defendant with the Credit Reference Bureau, which is contrary to clause 2.3 of the Credit Data (Privacy) Code 2006, which has caused JlO business loss and damage to the Plaintiff as it fails to access credit facilities from other Banks due to the overcharges 1n insurance premiums and illegal debt collector charges. 2.17 The Plaintiff, claims against the Defendants, special damages for its failure to obtain financing from First Capital Bank to install a center pivot irrigation for 200 hectares of a newly purchased farm in 2018. According to the Plaintiff, the said financing was declined by the Bank due to the listing of the . Plaintiff with the Credit Reference Bureau by the 1 st Defendant. The 200 hectares of wheat would have generated 1800 tons of wheat at a price of USD 440.00 per ton, resulting in the Plaintiff's loss of the gross amount of USD 1, 179.00. 2.18 The Plaintiff states that it has suffered loss and repeats its claims against the Defendants as endorsed on the writ. 1 st Defendant's Defence and Counter-claim 2.19 In the 1 st Defendant's Amended Defence and Counter-claim, filed on the 09th of March, 2021, the Defendant, who is a commercial Bank registered under the Banking and Financial Services Act and carrying on the business of Banking, states that the contract of insurance Policy Number UCN: 38367680, was entered into between the Plaintiff and 2 nd Defendant, causing the 1 st Defendant to not be privy to the same. According to the 1st Defendant, its role was merely for the payment of insurance premiums on behalf of the Plaintiff Jll 2 .20 The 1 s t Defendant further provides, that the Plaintiff was made aware of the insurance premiums payable under Comprehensive Insurance Policy number UCN: 38367680 within the V AF agreement. 2.21 According to the Defendant, the premiums were initially charged at USD 420.00 per month for one vehicle being the Land Rover Discovery registration number ALZ 41 ("the First Vehicle") under VAF number LUS01752L, and later reduced to USD 332.79 following a revision of the rates by the 2 nd Defendant. 2 .22 The 1st Defendant further avers, that all insurance premiums under VAF number LUS01724X in respect of the Toyota Landcruiser registration number AJD 4371 ("the Second vehicle") were charged at USD 332.39 and later reduced to USD 287.35 2 .23 The 1s t Defendant, maintains the averment that the insurance contract was between the Plaintiff and 2nd Defendant and therefore all terms governing the Insurance policy between them were as stipulated therein. 2.24 The 1st Defendant, argues that the Plaintiffs understanding of the contents of clause 8 A of the Insurance Policy is inaccurate and misconceived, as the insurance premiums were based on the sum insured as defined in the Insurance Policy. J12 2.25 The 1 st Defendant further avers, that the Plaintiff was entitled and under an obligation to update the sum insured from time to time which options it elected not to exercise. This therefore caused the 1st Defendant to continue to pay, on behalf of the Plaintiff, insurance premiums based on the various certificates of insurance issued by the 2 nd Defendant, during the duration of the VAF Facility. 2.26 The 1 st Defendant, denies having overcharged the Plaintiff insurance premiums and instead avers that the Plaintiff read and understood all the agreements it was subject to, governing the relationship of banker and customer / lender and borrower. 2.27 The 1 st Defendant states that in the event the contents of the Insurance Policy were unfair, which it argues the contrary, the same are not covered under the Banking and Financial Services Act and the Banking and Financial Services Act No 7 of 2017, were not intended to be of retrospective effect and therefore do not apply. 2.28 The 1 st Defendant avers that all tax invoices, albeit in the form of monthly and bi- annual bank statements, were generated and sent to the Plaintiffs registered e-mail address as and when they were due. The 1 st Defendant denies the allegation of the Plaintiff that it did not avail the Plaintiff the Bank statements until 2019, J13 as the Plaintiff had the same from inception of the said facility in the required format. 2.29 The I st Defendant, further states that the Plaintiff was always at liberty to make valid VAT claims using the said Bank statements but elected not to do so. 2.30 The I st Defendant, avers that the Plaintiff hc\.s no locus standi to make the claim for a VAT refund and the claim by the Plaintiff that the bank statement was debited with "value added tax on insurance" is untrue because the said entries pointed out by the Plaintiff are marked as "VAT ON INS" referring to VAT on instalment as per agreement between the Plaintiff and the I st Defendant. 2. 31 The I st Defendant further avers that even in the event the said "VAT ON INS" referred to VAT on insurance, which it is denied, the same would have been a charge levied by the 2 nd Defendant and not on the 1st Defendant herein and therefore consequently any claim would fall with the 2°d Defendant and not the 1st Defendant as alleged. 2.32 According to the 1st Defendant, it engaged various debt collectors to collect the amounts due under the VAF facility from the Plaintiff and following demands by the said debt collectors concerning the amounts due, the Plaintiff would make some payments towards outstanding amounts and consequently, J14 debt collectors invoiced the 1 st Defendant who bore the costs deductible from the Plaintiff. 2.33 The 1st Defendant, further argues, that by virtue of clause 10.7 of the VAF facility terms and conditions, the Plaintiff was liable for the collection costs as a consequence of its default in making the agreed payments as and when they fell due. 2.34 The 1st Defendant also states that it did on numerous occasions, prior to June 2019 and after, notify the Plaintiff that failure to settle amounts due would result in its details being provided to the TransUnion being the Credit Reference Agency. 2.35 According to the 1st Defendant, the notification to TransUnion was done in line with clause 16.1.3 of the terms and conditions of the V AF facility and in accordance with clause 13 of the Banking Facility Letter. Additionally, the said notification was done in accordance with the Banking and Financial Services (Provision of Credit Data and Utilisation of Credit Reference Services) Directives and Bank of Zambia Guidance Note No 1 of 2014, which makes it mandatory for credit providers to submit both positive and negative information on the repayment behaviour of every borrower. 2.36 The 1 st Defendant, avers that the notification or negative report, is not what automatically led to the Plaintiff being denied credit facilities as the TransUnion Credit Report clearly states that the JlS information provided therein is not intended to reflect upon the solvency, financial standing or the stability, honesty or motives of any party referred thereto. 2.37 The 1 st Defendant, avers that it is not liable to refund any amount to the Plaintiff and alternatively the Plaintiff is still in default and indebted to it in the sum of USD 23, 239.68 as at 10th November 2020. 2.38 The 1 st Defendant denies each and every allegation in the statement of claim and further avers that the Plaintiff is not entitled to any relief sought 2.39 In its Counter - claim, the 1 st Defendant claims that by virtue of the VAF Facility, the Plaintiff upon application to the 1 st Defendant, was availed the sum of USD 500,000.00. The same is stipulated in the Banking Facility Letter of 6 th October 2014 (the Facility Letter). 2.40 The Defendant emphasizes, that the VAF facility was subject to the VAF facility terms and conditions, therefore, by finance lease agreement numbers LUS01724X (the first lease) and LUS001725L (the second lease) entered into in 2014 and 2015, respectively, the Plaintiff agreed to take leases of the First and Second vehicle. 2.41 According to the Defendant, the structure of the leases was that two bi- annual principal payments would be made in June and J16 December, while interest would be paid in monthly instalments. Therefore, during the tenure of the leases, a total of20 principal payments were due and· payable by the Plaintiff to the 1 st Defendant 2.42 The 1 st Defendant also contends, that it made payments to the suppliers of the vehicles under the leases by drawdowns made on the Plaintiff's account. 2. 43 Eventually, according to the 1 st Defendant the Plaintiff defaulted on the agreed payments and various letters of demand dated 17th May 2018, 1st August 2018, 15th May 2020, g th September 2020 and 9 th October 2020, were sent to the Plaintiff demanding the immediate payment of the then outstanding arrears and entire outstanding amounts. Despite the said demands, the 1 s t Defendant, argues that the Plaintiff failed to make full payment of the outstanding sums. 2 .44 The 1 st Defendant, avers, that this consequently resulted in its engaging the services of debt collectors in accordance with the terms of the Banking Facility Letter and the V AF facility terms and conditions. This resulted in the 1st Defendant to incurring fees and charges. 2.45 The 1 s t Defendant also avers, that the Plaintiff is in effective sole possession of the vehicles under the leases and remains in J17 default of payment of the principal and interest under the VAF facility. 2.46 According to the 1st Defendant the total amount due to it from the Plaintiff as at 10th November 2020, is the sum of USD 23, 239.68 being USD 1,340.24 under the first lease and USD 21, 899.44 under the second lease. 2.47 The 1st Defendant, states that despite several demands and reminders for payment of the outstanding amount, the 1 st Defendant has not received nor has any other person by the 1 st Defendants order, received the outstanding amount or any part thereof towards the satisfaction of the sum and naturally the 1 st Defendant has incurred and will incur certain expenses in enforcing the securities, the agreement which expenses ought to be catered for by the Plaintiff. 2 .48 The 1 st Defendant, further states that it has suffered loss and damage and therefor Counter-claims against the Plaintiff for: z. Payment of all sums due and owing by the Plaintiff under the Vehicle Asset Finance facilities numbers LUS01752L and LUS01724X together with all the accruing interest until final payment currently standing at USD 23, 239.68; ll. Payment of all other fees and charges incurred by the Applicant in enforcing the securities herein; J18 m. An order for the repossession and sale of the vehicles, registration numbers ALZ 41 and AJD 43 71; w. An Order pursuant to Order 88/ 5/ 1 7 of the Rules of the Supreme Court 1999 Edition; An order for costs; and Further or other relief that the Court may deem.fit. v. vz. Plaintiffs Reply & Defence to the 1 st Defendant's Counter - claim 2.49 In the Plaintiffs Amended Reply and Defence to the 1st Defendant's Counter - claim of 16th March 2021, the Plaintiff provides that the 1st Defendant was privy to the contract of insurance signed between the Plaintiff and 2nd Defendant by virtue of: I. the 1 st Defendant's interest in the contract of insurance as "the Financial Institution" or the "Credit Guarantor" which 1s clearly stated in clauses A.4 and A7 of the comprehensive insurance policy the insurance with the 2nd Defendant having been II. arranged by the 1 st Defendant pursuant to clause 5. 3 of the V AF facility / agreement 2.50 Further, the Plaintiff avers, that the 1 st Defendant unequivocally confirmed to the Plaintiff, in letters dated 24th December 2019 and 9 th September 2020, that it was the 1 st Defendant's policy J19 to comprehensively insure motor vehicles with the 2nd Defendant based on the "Insured Sum" for brand-new vehicles and not the real market value. 2.51 According to the Plaintiff, the 1s t Defendant presented the contract of insurance to the Plaintiff, requesting the latter to execute it and thereby implying itself to be an insurance broker . for the 2 nd Defendant without the relevant license. 2.52 The Plaintiff, states that at no time did it deal directly with the 2 nd Defendant in the procuring of the contract of insurance and it instead and at all material times dealt with the 1 st Defendant. 2.53 The Plaintiff also claims that no detailed explanation of the terms of the insurance policy were ever provided to it by either of the Defendants; which said actions are contrary to clause 5.3.1 and 5.3.3 of the VAF facility / agreement. 2.54 The Plaintiff states, that though later reduced, the reduced premiums charged on the vehicles well still very excessive and extortionate and fell far short of the premiums calculated on retail value of the vehicles or the outstanding loan balances, nor were there any non-claim benefits applied on the premiums. 2.55 The Plaintiff maintains, that it has been overcharged the amount of USD 17, 508.39 in insurance premiums and the reduced premiums served no real benefit to it. J20 2.56 The Plaintiff further maintains, that it was overcharged insurance premiums bas~d on the insured sum and not the diminishing annual retail value of the vehicles or loan facilities. 2.57 The Plaintiff, provides in its pleadings, that despite its protests and complaints as to the excessive charges, the 1s t Defendant continued to debit its account. 2 .58 The Plaintiff, also avers in its pleadings, that contrary to the 1 st Defendant's assertions, bank statements are not tax invoices and any usage of bank statements for tax purposes must have individual reference numbers to avoid duplication. Therefore, bank statements alone, without specific VAT reference numbers are not accepted by tax authorities 2.59 The Plaintiff demands, that both Defendant's render a true and proper account and explanation of all the VAT debited to the Plaintiff's account and why no insurance levy at 3% was debited to the Plaintiff's account from 1st January 2016 by either of the Defendant's. 2.60 The Plaintiff claims that the 1 st Defendant having admitted that "VAT ON INS" , refers to VAT on insurance, both Defendants are liable to refund the Plaintiff any purported VAT on insurance after 1s t January 2016. J21 2.61 The Plaintiff also denies that any debt collector at any point in time delivered to it any demand letters, visited the company nor "collected" money from it.· The Plaintiff also states that none of its payments were induced by any debt collector therefore making the debt collection charges unjustified. 2 .62 The Plaintiff also states, that the purported debt collector charge on the Land Cruiser account was debited several months after the 1 s t Defendant's e-mail of 30t h August 2019, which e mail confirmed full payment of the Land Cruiser lease. 2.63 The Plaintiff avers that any purported arrears on the Plaintiff's accounts were caused by the over-charging on insurance premiums and the 1s t Defendant ought not to have reported the Plaintiff to the Credit Reference Bureau. 2 .64 In its Defence to the Counter-claim, the Plaintiff specifies that the amount specified in the VAF facility/ agreement, which was USO 500,000.00, was never drawn or utilized by the Plaintiff and what was utilized was the actual cost of the vehicles as afore stated. 2.65 The Plaintiff also maintains, that any purported arrears on the accounts claiming to have arisen would not have arisen had there been no overcharge on the insurance premiums charged to the Plaintiff. J22 2.66 The Plaintiff, avers that it has fully repaid its leases to the 1s t Defendant and that it is the 1 st Defendant that owes the Plaintiff the sum of USO 17, 508.39 for overcharges on insurance premiums, USO 30,467. 12 in unclaimed VAT refunds and USO 6,039.00 in unjustified debt collection fees. 1 st Defendant's Reply to the Plaintiff's Reply and Defence to Counter-claim 2.67 The 1st Defendant settled its Amended Reply to the Plaintiffs Reply and Defence to counter-claim, on the 19t h of March 2021. 2.68 In the said pleadings, the 1 st Defendant avers that while it was the distributor of the insurance product for the benefit of the Plaintiff, it is still not the provider of the insurance and the same does not make it privy to the contract between the Plaintiff and 2 nd Defendant. 2 .69 The 1 st Defendant also denies, ever having been an agent or insurance broker for the 2 n d Defendant and further denies having been in breach of clauses 5 .3 . 1 and 5.3.3 of the VAF facility. According to the 1 st Defendant it requires that all vehicles under the VAF Facility to be comprehensively insured though it does not provide the insurance itself. 2.70 The 1st Defendant avers that the Plaintiff misunderstood the insurance policy, despite the contents having been explained to J23 it and a copy given for its perusal before execution on the 3 rd of November 2014. 2. 71 The 1 st Defendant, maintains that premiums were deducted in accordance with the insurance policy and the premiums communicated to it through the Certificates of Motor Insurance, it also maintains that there was no overcharge on any insurance premiums as alleged. 2.72 The 1st Defendant, maintains that the statements and bi-annual bank statements issued to the Plaintiff were in the required format and the said bank statements could be used to claim VAT, more so that the 1st Defendant had already submitted and paid the amounts due on VAT returns to the ZRA. 2.73 The 1st Defendant avers that account has already been rendered to the Plaintiff and no admission as alleged by the Plaintiff was made by the 1st Defendant in relation to insurance premiums. 2.74 The 1st Defendant also provides in its pleadings that the tax invoices in the form of bank statements issued to the Plaintiff contained reference numbers. 2. 75 In relation to the debt collection fee: the 1 st Defendant repeats that the same was existing on the Plaintiff's account and was discovered after the 1 st Defendant erroneously notified the Plaintiff that the amounts due under the lease or facility had been cleared. J24 2.76 The 1st Defendant, maintains that it was justified in reporting the Plaintiff to the Credit Reference Agency as the Plaintiff was consistently in default of its obligations under the banking facilities availed to it. 2. 77 The 1 st Defendant states 1n summation, that the Plaintiff remains indebted to it in the amounts clainied and repeats the contents of its Defence and Counter - claim. 2 nd Defendant's Amended Defence 2. 78 In the 2 nd Defendant's Amended Defence of 25th of March 2021, the 2 nd Defendant, who is an insurance company registered under the Insurance Act and carrying on the business of Insurance, denies all allegations in the Plaintiffs statement of claim. 2. 79 The 2 nd Defendant, only argues that the Plaintiff did indeed procure Insurance Policy Number UCN: 38367680, and further states that the 2 nd Defendant as insurer, insured the amount on the policy and claims are paid on the lesser of the insured sum or retail value. 2 .80 The 2 nd Defendant, avers that "VAT ON INS" refers to Value Added Tax on instalments of the loan and not the Value Added J25 Tax on insurance. The 2 nd Defendant avers that it never changed or collected Value Added Tax on insurance premiums after 31 st December 2015: 3.0 TRIAL Plaintiff's Evidence 3.1 The Plaintiffs first and only witness (PWl), was Mr. Elias Andrew Spyron, Managing Director of the Plaintiff company, who in his Witness Statement of 1 7 th May 2021 , testified that on the 3 rd of November 2014, the 1st Defendant entered into a Vehicle Asset Finance Agreement (hereinafter referred to as VAF agreement) for the purchase through a Bank finance of two brand new motor vehicles being: Land Cruiser V8 registration number AJD 4731 and a Land Rover Discovery ALZ 41. 3.2 He stated that the cost of the Land Cruiser V8 was USO 61, 500.00 with finance charges of USO 21, 261.46 causing it to have a total cost of USD 83, 376.36. As for the Land Rover Discovery, he provided that it cost USO 91,400.00 with finance charges of USO 28, 587.00 bringing it to a total cost of USO 108, 168.00. The Plaintiff had 5 years to pay its obligations under the VAF agreement by instalments that were 6 months apart - to coincide with farming seasons. Each vehicle would have 10 instalments paid over 5 years. J26 3.3 It is the witness's testimony, that of the 20 instalments due for the two vehicles, 19 were paid within five years and the 20t h and last instalment was delayed in order to facilitate the expected refund form the overcharge on insurance premiums for both vehicles and the VAT losses incurred by the Plaintiff 3.4 According to the witness, the 1s t Defendant Bank arranged comprehensive insurance cover for the two vehicles with the 2 nd Defendant insurance company pursuant to clause 5.3 of the V AF agreement. The witness testified that the 1 st Defendant's bank officials presented him with the Comprehensive Insurance Policy (hereinafter referred to as the Insurance Policy), which formed the contract of insurance and he signed it on behalf of the Plaintiff on the 3 rd of November 2014. The witness emphasizes that at no time whatsoever did he personally deal with the 2 nd Defendant insurance company or its employees during the time at which such insurance was being arranged. 3.5 The witness stated that clause 5 .3.1 and 5.3.3 of the VAF agreement states: "5.3 In respect of any insurance policy arranged by us we will: 5.3. lDisclose the cost to you of any insurance supplied 5 . 3 . 3 Give you a copy of the insurance policy, explain the terms and conditions thereof to you and confirm that you have understood the same." J27 3.6 He stated that notwithstanding the clauses highlighted, the 1 st Defendant never fully explained the insurance policy to him for him to fully understand but just gave him a document to sign. 3.7 The witness testified that in the first year, 2015, the insurance policy was understandably based on a brand-new vehicle. In 2017, he had several meetings with the l,st Defendant's VAF agreement customer relations officer, one Ms. Mwandizhya Daka and complained about the abnormally high insurance premiums being charged on the motor vehicles which premiums were in the range of USD 420.00 per month for each vehicle. According to the witness he was informed that the insurance cover on the vehicles is automatically activated before it expires in December of each year so that the asset is always covered and nothing could be done by Ms. Daka. 3.8 The witness provides that premiums continued to be charged under the policy based on new vehicles against his will, he also states that the said insurance premiums were being debited to the Plaintiffs account as the Defendants were basing premiums on the insured sum or value of a brand-new vehicle as opposed to the market or retail value which is contrary to clause A8 on page 2 of the insurance policy contract. Clause A8 states: J28 "8 "Maximum Indemnity" the current sum insured specified in the certificate of insurance or the Retail Value, whichever is lesser" · 3.9 The witness further provides that such practice by both Defendants' meant that whilst the premiums were based on a brand new motor vehicle, they would only make compensation or pay out in an event of loss based on tlie market or retail value. This amounting to unjust enrichment on the part of the Defendants and when he raised this to the 1 st Defendant via an e-mail of 3 rd December 2019, the response given was as follows: "As discussed the FNB vehicle and asset finance policy requires that all used leased vehicles are comprehensively insured at.full invoice value, including VAT. However, there is an option to adjust the sum insured at the customer's request provided the sum insured at least covers the accounting balance downwards, thus the original invoice value was maintained throughout the life of the lease. As highlighted by MiNET the broker, the basis of settlement for the FNB motor policy is based on Replacement Value or declared sum insured whichever is less. This means that in an event the vehicle is stolen or written off, the insurers will consider settling the claim based on the Replacement cost for the same make I model or the declared sum insured whichever is lower. These terms were specifically J29 negotiated for the benefit of FNB Scheme members and would certainly not be based on a standard Motor Policy" 3.10 The witness states in response to the the afore highlighted response and email of 29th January 2019 from the 1 st Defendant that: firstly, he is not aware of MiNET's involvement in the transaction as a broker and has never dealt with them, secondly that no one advised him he is not supposed't:o be advised he is supposed to read and then request the option therefore where is this correspondence that there was the option to adjust the premium, thirdly that no - claims discount of some 15% (for each year a client does not claim, amounting to a 60% non claim discount after 4 years) per annum which most other insurance companies were offering was not part of the Defendant's insurance cover and thus being disadvantageous to the Plaintiff. The witness provided that in fact the monthly premium charged by the 2 nd Defendant insurance company was higher than what other insurance companies like Savenda General Insurance Limited and Zambia State Insurance Corporation were offering. 3 . 11 The witness states that the Plaintiff claims a refund of USD 17, 508.39 being over - charge on insurance premiums debited to the Plaintiffs Bank account with the 1st defendant. This is broken down for each vehicle as: I. A total of USD 9, 298.32 on the Toyota Land Cruiser J30 II. A total of USD 8,210.07 on the Land Rover Discovery 3.12 The witness also testified. that the 1 st Defendant also debited debt collector's fees totaling USD 6, 441.36 when in fact the Plaintiff never received any visit or letter form any debt collector and no monies were gotten or recovered via this debt-collection from the Plaintiff. 3.13 He states that in an e-mail sent to him by the 1 st Defendant's senior manager - Vehicle and Asset Finance on 30th August 2019, the 1 s t Defendant confirmed that the lease of the Land Cruiser AJD 4 731 had been "fully paid" though the 1 st Defendant hasn't released the Motor vehicle ownership registration book to the Plaintiff. 3.14 The Plaintiff also notes that the 1st Defendant Bank continued to debit its Bank account with Value Added Tax (VAT) withot any supporting tax invoices as required by Law and as a result the Plain tiff was unable to claim a refund on tax from the Zambia Revenue Authority (ZRA) resulting in the Plaintiff sustaining a total loss of USD 30, 467.12 being 16% on the value of the newvehciles (USD 17,306.00 and USD 13,340.00). 3.15 The Plaintiff further provides that because he on behalf of his business submits VAT returns, the business is a VAT refund receiver and entitled to reclaim VAT on the vehicles. However the 1 st Defendant ignored his several requests for Tax invoices J31 and its officials appeared to not fully understand the Plaintiff's need for tax invoices. He states that only after great effort did the 1st Defendant issue two tax invoices being: I. Tax invoice number 8992 for USD 7, 939.99 dated 16th June 2019 II. Tax invoice number N15042820 for USD 9, 417.62 dated 16th June 2019 3.16 The witness further provides that it is not true that the Bank or lease statements by themselves are sufficient for the Plaintiff to claim VAT refund from ZRA and to the contrary ZRA officials requested that tax invoices be obtained. 3.17 The witness provides that he subsequently forwarded two emails from ZRA on 22nd September and 22nd December 2020 stating that a tax invoice and other information ought to have been provided by a Bank such as the 1 st Defendant. He also states that even assuming the Bank statements can be used as tax invoices, The Finance lease Agreements-Copy Tax invoices of the 1 st Defendant do not fulfil the standard requirements and the ZRA VAT guide. 3.18 The witness emphasized that the Plaintiff was never furnished with Bank statements except on the 24th of December 2019. He also provided that the Plaintiff was at no time furnished him with lease statements by the 1 st Defendant Bank and these lease J32 statements were only seen to him for the first time provided via the 1 st Defendant's affidavit 1n support to discharge interlocutory injunction. · 3.19 The witness also provided the 1 st Defendant Bank continued to debit the Plaintiffs account with VAT after 1 st January 2016 in contravention of the Insurance Levy Act no 21 of 2015 as the Plaintiff's Bank statement was debited with ·value added tax on insurance or "VAT ON INS" after 1st January 2016 to 2019. The total VAT on insurance amounted to USD 10,199.45 for the Land Rover Discovery for the years 2016 to 2019 for which the Plaintiff claims r efund. The witness also stated that the Plaintiff requires from the 1 s t Defendant clear explanation of the disputed debits 3 .20 According to the witness the 1 st Defendant without justifiable cause listed the Plaintiff with the Credit reference Bureau without any formal or prior written notification as required clause 2.3 of the Credit Data (Privacy) Code 2006 which has caused business loss and damage to the Plaintiff for failing to access credit facilities with First Capital Bank broken down as follows: I. The Plaintiff applied for financing form First Capital Bank as it was in the process of obtaining a loan to install center pivots irrigation for 200 hectares on a newly purchased farm in 2018 J33 II. At the request of First Capital Bank, the Plaintiff submitted a loan application of USD 1.4 Million. Senior Management and Credit Bank officials visit the farm for a credit appraisal. The Bank which had in principal approved the application for the loan later declined it on the premise that the Plaintiff had been listed with the Credit reference Bureau by the 1st Defendant and this was only verbally communicated to the witness by the Chief Commercial Officer of First Capital Bank. It was noted that the purchase of the farm in question was dependent on its ability to generate income justifying its purchase. III. The 200 hectares of wheat would have generated 1800 tons of wheat at USD 440.00 per ton resulting in gross loss of USD 792,000.00 by the Plaintiff 3.21 It is the witness's testimony that the information submitted by the 1 st Defendant to the Credit reference Bureau is inaccurate in that the scheduled repayment terms are listed as monthly whereas the leases in actual fact were payable every 6 months. 3.22 In Cross - examination, the witness testified that it was not the Plaintiff's 1 st time to borrow from the 1 st Defendant Bank. The witness confirmed that he is the one who signed the Banking facility letter on its last page and every other page indicating that he read and understood the terms of the agreement. J34 3.23 In his testimony, the witness denied that the 1 st Defendant allowed for a lease on vepicle and asset finance through the Banking facility letter at clause 2.2 and instead testified that the Finance Lease Agreement of 3 rd November 2014, which was a few days after the Banking facility and was not related to the lease of the vehicles subject of these proceedings. 3.24 The witness also testified that he signed the terms and conditions of the finance lease agreement of 3 rd November 2014 as well as each page of the said document. He stated that clause 4.5.3 and 5.1 of the Banking and facility letter prior referred to and subject of these proceedings was meant to take out and maintain comprehensive insurance of any assets taken out by the 1 st Defendant Bank. 3.25 The witness, further testified that while the terms and conditions of the VAF facility had an option for the 1 st Defendant to source its own insurance, he on the behalf of the 1st Defendant signed a comprehensive insurance policy with Hollard Zambia and accepted all the terms of its insurance policy. 3.26 The witness also stated that through clause 4.5.3 of the VAF Facility, the 1st Defendant Bank was to pay insurance premiums that were being charged by the insurer on his behalf, these specifically being the ones arising from the comprehensive J35 insurance policy he had signed with the 2 nd Defendant Insurance Company 3.27 The witness also confirmed, when referred to an email from Pensions and Insurance Authority (PIA), at page 49 of the Plaintiffs bundle, that the insurer was the 2 n d Defendant and the broker was Minet whom he had never met. 3 .28 The witness confirmed that according to clause A7 of the VAF facility letter, he was under an obligation to update the sum insured from time to time, at his request, and he did raise this issue starting the year 201 7. He stated that he had several meetings with representatives of the 1 st Defendant from 201 7 and he did also send an email to his account manager raising the issue. 3.29 According to the witness, after having complained to the PIA, about the conduct of the 1 s t and 2 nd Defendant, PIA wrote to him that the practice done by the 1 st and 2 nd Defendant was appropriate and the same seemed to him like a repetition of information they had been given by the 1st Defendant. He also stated that he was informed by PIA that the Plaintiff had an option to obtain its chosen insurance policy provided the Bank was named as first loss payee. 3.30 The witness states that he personally arranged insurance cover without either of the Defendants, with Savenda Insurance J36 Limited. This insurance cover was arranged on the 1 st of October 2019, for both the Land Cruiser V8 and the Land Rover Discovery whose leases were to expire in June 2019 and December 2019, respectively, he stated that though he supplied these certificates of Motor Insurance to the Bank on the 3 rd of December 2019, it had not been his first time to raise issues concerning overcharges on insurance premiums to the 1 st Defendant Bank. 3.31 Concerning the debt collector's fees and charges, the witness confirmed that the Plaintiff did on some few occasions delay to pay instalments to the 1 st Defendant as agreed and this signified a breach of agreement for which the Bank would claim immediate payment and charge collection fees for any overdue payments according to the clauses of the VAF agreement. The witness did also confirm in his testimony that he had been contacted via phone by a person who introduced themselves to him as a debt collector. 3.32 Concerning the VAT refund, the witness stated that despite having sent an email in February 2020 after the leases had expired requiring tax invoices to reclaim VAT with the ZRA; he had made requests concerning the invoices for the VAT from the beginning of his relationship with the 1 s t Defendant Bank and was not availed the said invoices. J37 3. 33 Concerning the reference of "VAT on INS", the witness stated that that the 1st Defendant was debiting the Plaintiff with VAT as inferred from the Bank statements. He rejected the entry "VAT on INS" as meaning "VAT on instalment" as it could not possibly be so as instalments under the Plaintiffs account were only charged every six months, whereas insurance premiums were applied every month. 3.34 The witness did however confirm that Bank statements from the 1 st Defendant contained on each one of them a sequence of inscriptions as follows: "Motor Comprehen" within the description column which refers to insurance premiums, and underneath such inscriptions would be the word instalment and beneath the word instalment would be V. A. T for which, next to it, in its reference column would be "VAT on INS" 3.35 The witness confirmed in his cross - examination that as per clauses 16.1.3 and 16.1.4 of the VAF facility the Bank had the right to submit his credit data to any credit bureau of its choice. He also stated that in an email to the Plaintiff from 1 st Capital Bank, the Bank did not state the reason for rejecting its application for financing. The witness also confirmed that the 1st Defendant did pay to the 1st Plaintiff USD 1,700.00 as a result of VAT on insurance premiums. 3 .36 In cross examination by the 2 nd Defendant's Counsel, the witness emphasized that the Plaintiff only authorized the 1 st J38 Defendant to debit its account of insurance premiums or make payments on its behalf for the first year and as far as he could recall the Plaintiff was never approached again. He stated that he never on behalf of the 1 st Plaintiff requested for the insurance agreement to cease and therefore the two vehicles continued to be insured for the entirety of the agreement as the 1 st and 2 nd Defendant renewed the premiums one month before they would expire. 3.37 The witness testified that he at no point approached the 2 nd Defendant to vary the amount of the Motor Vehicles. 3.38 In re - examination, the witness clarified that for the entire duration of the V AF agreement between the Plaintiff and the 1 st Defendant Bank the 1 st Defendant took it upon itself to insure both vehicles every year without ever consulting the Plaintiff. 1 st Defendant's Evidence 3.39 The 1st Defendant First Witness, DWl, was Mwewa Kayamba, the Business Development Manager of the 1 st Defendant Bank. He stated through his witness statement of 18th May 2021, that he has been employed by the 1 st Defendant since 2017. 3.40 He testified the Plaintiff has had a relationship with the 1 st Defendant since 2014 and was availed a VAF facility dated 6 th October 2014 after having applied for the same with the 1 st Defendant. The same was for 6 months and subject to the terms and conditions as outlined within the document. J39 3.41 According to the witness, the Plaintiffs Director Mr. Andrew Spyron (PWl), after being granted the VAF facility executed finance lease agreements numbers LUX0 1724X (the first lease) and LUS001752L (the second lease) sometime in 2014 and 2015 respectively. These leases were for a Toyota Land Cruiser registration number 43 71 under the first lease and a Land Rover Discovery Registration number ALZ 4 i under the second lease. 3.42 According to the witness, the 1 st Defendant made payment in respect of the vehicles directly to the suppliers as identified by the Plaintiff and according to clauses 4.1 and 4.2 of the VAF Facility the 1 st Defendant remains the owner of the vehicles until full payment under the V AF facility. The structure of the leases was that two bi - annual principal payments would be made in June and December each year and interest would be paid in monthly instalments. Therefore during the tenure of the leases a total of 20 principal payments were due and payable by the Plaintiff to the 1 st Defendant. In addition to the bi - annual instalments, each of the said bi - annual principal instalment payments were subject to VAT as required by the law. The witness stated that the monthly instalments were not subject to VAT as the same constituted interest payments only. J40 3.43 The witness further stated that the 1st Defendant remitted VAT payments for its customers to the ZRA each month and did so through the subsistence of the leases afore-mentioned. 3.44 The witness also stated that part of the VAF conditions was that the Plaintiff was required to take out comprehensive insurance in respect of the vehicles for the duration of the V AF facility; such insurance could be arranged by the Plaintiff himself provided the insurance policy was satisfactory to the 1 st Defendant, alternatively the 1 st Defendant could arrange such insurance for the benefit of the Plaintiff and the Plaintiff opted for the latter. 3.45 The witness stated that consequently and with full understanding of the V AF conditions, a contract of insurance was entered into between the Plaintiff and the 2 nd Defendant insurance company to the exclusion of the 1 s t Defendant Bank under Policy number UCN 38367680 (the insurance policy) and various certificates of motor insurance were issued under the policy. 3.46 The witness testified that, due to the fact that the VAF Facility was financed by the 1st Defendant: all instalment payments in respect of the insurance policy were paid by the 1 s t Defendant on behalf of the Plaintiff. The premiums were initially charged at USO 420.00 per month for the first vehicle and later reduced to USD 332.79 following a rev1s10n of the rates by the 2 nd J41 Defendant. For the second vehicle insurance premiums were initially charged at USD 332.39 and later reduced to USD 287 .35. 3.47 According to the witness the nature of the arrangement between the 1s t and 2 nd Defendant was such that the 2 nd Defendant Insurance company would issue invoices or batch statements to the 1st Defendant Bank based on the amounts agreed each year between the Plaintiff and the 2 nd Defendant and the said 1nvo1ces or batch statements would then be paid by the 1 st Defendant. 3.48 The witness provided that at all material times the 1 st Defendant Bank paid the insurance premiums based on documents received form the 2 nd Defendant Insurance company as the latter had a direct relationship with the Plaintiff in respect of the insurance policy. 3.49 The witness stated that in order for clause A8 in the definition section of the insurance policy to be understood reference must be made to clause A 7 which defines the sum insured. The witness read out that, "The sum insured is the value of the vehicle that is specified by the Plaintiff at the time of its application of the policy which amount is specified in the certificate of insurance and may have been varied at the Plaintiffs request from time to time during the subsistence of the lease". The witness therefore testified that 1 st Defendant was J42 justified in paying the amounts due under the insurance policy agreed between the Plaintiff and 2 nd Defendant 3 .50 The witness stated in testimony that the Plaintiff did not at any time complain about the insurance premiums that were being deducted which eliminates any claim under clause A8 of the insurance policy as it made no application to vary the premiums in accordance with the market value of tlie vehicles as per clause A7. 3 .51 The witness did admit, however, that it was only toward the tenure of the leases that the Plaintiff made the claims subject of this suit. 3 .52 According to the witness, the Plaintiff as part of its relationship with the 1 st defendant agreed to receive monthly Bank statements and issue instructions to the 1 st Defendant via its electronic e-mail address elico@agrilink.com. The Plaintiff also executed an indemnity with respect to the receipt of instructions by electronic mail and therefore all the Plaintiffs monthly Bank statements and bi - annual statements in respect of the V AF facility were sent to the Plaintiff's email address as stated. Such Bank statements were system generated and delivered by a server. 3 .53 The witness testified that the Plaintiff was charged VAT on the bi - annual instalments as and when they were paid. In any J4 3 instance were the Plaintiffs would aver that it did not receive a Bank statement, the 1 st Defendant would generate a manual invoice for that particular month. The said monthly Bank statements would contain the following information: I. II. The 1 st Defendant's name The 1 st Defendant's Tax Payer Identification Number (TPIN) III. The 1 s t Defendant's invoice / statement number IV. The date of issuance of the said invoice or statement V. The period covered by the statements VI. The description of the services VII. The Plaintiffs name VIII. The total amount due under the statement/ invoice IX. The VAT due 3.54 According to the witness, it is the position of the 1 st Defendant that it issued tax invoices in compliance with the law and advice accorded to the Plaintiff by ZRA. The witness emphasized that all amounts due as VAT on the VAF facility were submitted and payment remitted to ZRA. 3.55 The witness provided that due to the fact that tax invoices were issued as aforesaid, the Plaintiff was at liberty to make a claim for VAT refunds from ZRA and the 1 s t Defendant is not liable for any amounts allegedly lost on VAT as the failure to reclaim the VAT was as a result of the Plaintiffs own doing J44 3.56 The 1 st Defendant's witness also provided that the Plaintiff in breach of the VAF facility did default on agreed payments to the 1st Defendant and therefore various letters of demanded dated: the 17th day of May 2018, the 1st day of August 2018, the 15th day of May 2020 , the 09th day of September 2020 and the 09th day of October 2020 were dispatched to the Plaintiff demanding the immediate payment of the then outstruiding arrears and entire outstanding amounts. Despite these letters the Plaintiff still failed to make full payment and consequently on diverse dates the 1 s t Defendant Bank engaged the services of debt collectors in accordance with clause 8.4 of the Banking Facility Letter, clause 10.7 and 14.3 of the VAF facility terms and conditions. 3.57 The witness provided that the said debt collectors engaged included Blitz Consultants Limited and Power Debt Collection and Investigation services from whom the 1 st Defendant incurred fees and charges for their engagement. According to the witness the total amounts due from the said debt collectors as debt collection fees were: USD 2,864. 15 under the first lease and USD 3 ,577.23 under the second lease. 3.58 The witness also stated that despite having pnor and erroneously notified the Plaintiff that the funds due under the Funds Lease Agreement had been repaid, the Plaintiff in fact remains indebted to the 1st Defendant in the sum of USD 23, J45 239.68 under the first lease and USD 21, 899.44 under the second lease, the Plaintiff is in effective sole possession of the vehicles under the leases and remains in default of payment of the principal and interest under the facility 3.59 The witness stated that the 1st Defendant, did on numerous occasions prior to June 2019 and later, notify the Plaintiff that its failure to settle the amounts due, would result in its details being provided to Credit Reference Bureau (Africa) Limited, the credit reference agency, which it subsequently did as per the Bank of Zambia Guidance Note No 1 of 2014, clause 14.1.3 of the VAF facility and clause 13 of the banking facility letter. 3.60 The witness also testified that following demands for payment of all outstanding amount to the 1 st Defendant, the Plaintiff raised argument about being overcharged insurance premiums by the 1s t Defendant. 3.61 The 1st Defendant through its witness provided that the Plaintiff did not update the details of the sum insured within the insurance policy throughout the duration of the leases and despite clarification on this position the Plaintiff insisted on its claims. 3.62 The witness also testified that the Plaintiff reported the matter to the Pensions and Insurance Authority who investigated the matter and responded to the Plaintiff notifying it that the acts J46 of the 1 st Defendant were in accordance with the law and the fact that the Plaintiff executed the insurance policy was proof that it accepted the terms ·and conditions thereof. 3.63 In Cross - examination, the witness stated that because he was employed in October 2017, and was not present in 2014 when the relationship between the Plaintiff and Defendant's began, his knowledge of the matter prior to October 2017 is through what is documented on the Bank's files. 3 .64 The witness, in relation to the insurance policy, provided that the Plaintiff opted to get insurance through the 1 st Defendant Bank and as such premiums were paid on the Plaintiffs behalf by the 1 st Defendant to the 2 nd Defendant. He further stated that the premiums that were paid to the 2 nd Defendant on behalf of the Plaintiff were based on invoices issued by the 2 nd Defendant and the said invoices did not contain VAT amounts, but only contained the amounts due in premiums. 3.65 According to the witness, when the insurance policy was signed at inception it became effective until expiry of the lease and the customer being the 1 st Defendant was also consulted concerning the premiums at inception through the agreement. 3 .66 The witness stated that the renewal of insurance premiums was done by the 1 st Defendant and the Plaintiff was aware of this J47 through the issuance of cover notes and by verbal notification of Bank officials. 3 .67 In relation to correspondence from the 1 st Defendant of 24th December 2019 and 09th September 2020, the witness confirmed that it is the Bank's policy to insure the asset at full invoice value. In this case the full invoice value was the original value that was stated in the invoice when the insurance policy was first signed. The witness also confirmed that because it was Bank policy, the Bank maintained the same value because the customer did not update his policy. 3 .68 The witness provided that the Plaintiff customer was given an option to update the insurance policy by its Director having appended his signature on it. This according to the witness sufficed as consultation concerning renewal and the value. The witness also stated that clause 9 of the insurance policy sufficed as relevant consultation prior to renewal of each of the policies. 3.69 The witness stated that while the VAF facility availed the Plaintiff customer USD 500,000.00 for a number of assets for which the customer opted to draw or use the money to buy the two vehicles subject of these proceedings financed by the 1 st Defendant. The witness also confirmed that out of the 20 instalments required for the vehicles under the V AF facility the Plaintiff so far paid 19. J48 3.70 The witness also explained that the 1st Defendant Bank was named under the insurance policy between the Plaintiff and the Bank as the first loss payee which would result in any pay outs, in the event of any loss, would go to the 1 st Defendant. The witness also confirmed that the premiums charged on the vehicles during the 5 years of the leases were based on the original value of the vehicles. 3.71 The witness stated in cross - examination, that AON Minet, the broker under the insurance policy, was appointed by the 1 st Defendant. He also stated that the 1 st Defendant Bank paid insurance premiums on behalf of the Plaintiff based on invoices that came from the 2 nd Defendant insurance company and the same was in order. He emphasized that the agreement between the 1 st and 2 nd Defendant is for nothing other than distribution of insurance policies. 3.72 In relation to the finance lease agreement copy tax invoice the witness stated that the same were just like the statements e mailed to the Plaintiff customer and other copies would only be generated or printed out at the request of the Plaintiff. 3. 73 The witness also stated concerning the "VAT on INS" that the VAT on instalments were paid bi - annually and the same were charged in June and December. He stated that some amounts on VAT on instalment were erroneously debited but returned to the Plaintiff customer such as that of 16th April 2015. However, J49 when queried on why there was no reversal in the month of June 2015 the witness stated that such month was the month in which capital payment by the Plaintiff customer was due and therefore no reversals were to be made. 3.74 The witness confirmed that while the installments debited from the Plaintiff were USD 1,096.30 the VAT charged was USD 31. 94 which is not the prescribed 16% which would have been USD 175.40. However, the witness stated that the manner of calculation is unique. The witness also confirmed that he was aware that from 1 st January 2016 insurance levy of 3% was introduced and therefore charging VAT on insurance premiums was abolished. However, the witness noted that no insurance levy at 3% was debited to the Plaintiff's account on all Bank statements before Court. 3.75 It is the witness's testimony, that despite the e-mail of 30th August 2019, from the 1st Defendant to the Plaintiff's director that the Land Cruiser had been fully paid off, each payment received from the Plaintiff was subject to a 10% debt collection fee and this hadn't been effected making the e-mail to have been erroneously sent. He further explained that such mistake was not formally retracted by the Bank thereafter. 3 . 76 When asked why the Bank paid out debt collector commissions in the absence of demand letters from the debt collector the witness, he stated that the Bank is the one that issued demand JSO letters. The witness admitted that on the tax invoice from the Debt collector Blitz Consultants Limited, the payment under lease LUS 0 1752L was listed twice with debt collector's fees at 10% charged twice. He also stated that in the same company's tax invoice of 03rd August 2019, the same was issued in respect of future dates. 3. 77 The witness placed on record, that the letter·of the Bank of 24th December 2019, raised the issue of debt collector's fees and explained the same to the Plaintiff, though there was no letter of introduction of the same prior to the debt collectors' appointment. 3 . 78 In relation to the listing of the Plaintiff with the credit referencing bureau the witness stated that he was aware that the Bank is to give 30 days' written notice prior to the report in order that a customer may regularize their default. He stated that the 1 st Defendant Bank did give the Plaintiff notice through its letter of 1s t August 2018, although the said letter does not provide a specific number of days. The witness did testify that the listing with the bureau was made on the 10t h of June 2019, by the 1 st Defendant. 3.79 In relation to the refund of USD 1,700.00 by the 1s t Defendant Bank to the Plaintiff, the witness testified that after a reconciliation, it was discovered that one of the Plaintiff's leases was overcharged in terms of insurance premiums due to change J51 of insurance law and to that effect a refund was made to it. He clarified that such refund was not on any VAT, but insurance premiums. 3.80 In re - examination, the witness explained that the asset-based finance of USD 500,000.00, was a blanket limit to facilitate the acquisition of various assets and in the case of the Plaintiff it only opted to draw a portion of it to acquire the two named assets that were eventually financed by the Bank. Therefore, the unutilized limit fell off after 6 months. 3.81 The witness also stated that the 1st Defendant Bank would automatically renew the insurance policy on behalf of the Plaintiff because where a client does not provide alternative insurance within 7 days of expiry the 1 st Defendant would do it on their behalf. 3.82 In relation to the "VAT on INS" charged to the Plaintiff the witness clarified that an instalment has several components such as the interest and capital portion and therefore such VAT was charged based on the capital portion of the instalments. 3.83 Concerning the erroneous information communicated to the Plaintiff with regards settlement of his instalment payments for the Land Cruiser lease, the witness stated that a retraction was in fact made by the Bank via email. The witness also stated that in terms of what seemed to be a duplicitous charge on the debt J52 collection receipt was actually an erroneous listing of leases by the debt collector as one of the leases on which debt was levied was a lease LUS0 1724X charged on the same day (02 nd November 2018) as LUS0l 7521. 3.84 The second witness on behalf of the 1 st Defendant, DW2, Patrick Shanyinde, a Banker in the 1s t Defendant Bank testified that the Plaintiff who executed the V AF facility Teases with the 1 st Defendant was constantly in default of his obligations under the facility. 3.85 He stated that, while the Plaintiff promised to make good on the default, he seldom did so and subsequently demand letters for arrears would be addressed to the Plaintiff. Among these various letters of demand are those dated: 17th May 2018, 1st August 2018, 15th May 2020, 9 th September 2020 and 9th October 2020. 3.86 According to the witness, despite the said demands for payments through the letters afore listed, the Plaintiff did not make full payment of the amounts outstanding. 3.87 The witness stated that the 1st Defendant following advice of the witness then engaged the services of debt collectors in accordance with the terms of the V AF facility under clauses 10. 7 and 14.3. The said debt collection services resulted in incurred fees and charges to the 1st Defendant. J53 3.88 The witness stated that the said Debt collectors were in contact with the Plaintiff's director. PWl and each time he would receive their call, payments toward his obligations under the VAF facility would trickle in. 3.89 It was the witness's testimony that debt collector's fees were properly incurred by the Plaintiff as per clauses 10.7 and 14.3 of the V AF facility. 3.90 The witness provided that the total amount due as debt collection fees under the first lease is USD 2, 864. 15 and under the second lease is USD 3, 577.23 as per the detailed account enquiry. 3. 91 In cross - examination, the witness provided that he began to deal with issues pertaining to the 1 st Defendant in 201 7, as prior to the said year he was assigned to the international Banking department of the 1st Defendant. 3. 92 The witness stated that he was aware that the Plaintiff and 1 st Defendant entered into a vehicle and asset finance agreement from November 2015 to November 2019 and during the relationship the customer was usually in default of payments under the agreement. 3 . 93 The witness stated that several demand letters were issued by the 1 st Defendant against the Plaintiff, he provided that: the first J54 is dated 17th of May 2018, the second is dated 1 st of August 2018, the third is dated 15th of May 2020 and the fourth is dated 09th October 2020. He stated that while he could not confirm whether the demand letters of 17th May 2018 and 15th May 2020 were delivered to the Plaintiff as no acknowledgment for the same had been made by the Plaintiff, he confirmed to the Court that the letter of 1 st August 2018 had been acknowledged by the Plaintiff. 3.94 According to the witness, debt collectors were engaged via the letter of 1st August 2018 at page 157 of the Plaintiff's bundle of pleadings. He also stated that proof of every debt collection by each debt collector can be demonstrated through the account enquiry with the 1 st Defendant. 3. 95 According to the witness, while he dealt with the debt collectors, the debt collectors were also in touch with the Plaintiff and therefore was able to prepare invoices in accordance with their debt collection. These tax invoices, according to the witness were paid on the basis of clauses 10.7 and 14.3 of the Vehicle and Asset Finance Facility Terms and Conditions agreed between the 1st Defendant and the Plaintiff. 3.96 The witness clarified that while the Plaintiffs Director PWl had been informed that the Land Cruiser Account had been fully paid, it was discovered that debt collection fees had not been charged to the Plaintiff and therefore the same were recovered JSS and a letter dated 09th September 2020 was issued to the Plaintiff by the 1 st Defendant to correct the position. 3.97 In re - examination, the witness clarified that demand letters were written within the credit department of the 1 s t Defendant and handed to the external debit collector who would deliver them to the Plaintiff customer. The witness also stated that he, prior to demand letters being issued individually engaged the Plaintiff's Director PW 1 via phone calls to inform him of outstanding repayments or arrears on the Plaintiffs account. 3 . 98 The witness provided that the Plaintiff was in default of its payments on several occasions such as 19th December 2016, which was the first date of default and 29t h August 2019 which dates indicate in their references, 'reversal'. 3.99 The third witness on behalf of the 1s t Defendant, DW3, was Lackson Ambulaya, the Managing Director of Blitz Consultants Limited and an accountant by profession. He stated through his witness statement of 18th May 2021 that his company offers debt recovery services, amongst other services. 3 . 100 He provided that by a letter of engagement dated 1 st August 2018, the 1s t Defendant instructed Blitz Consultants Limited, to undertake a debt recovery in respect of arrears on the VAF Facility of USD 29, 852.43. The witness stated that the Plaintiff was to be contacted in respect to such recovery and J56 where the same was not recovered, Blitz Consultants would alternatively reposes the Toyota Land Cruiser V8 registration number AJD 4371 and -Land Rover Discovery Registration number ALZ41 via escort of the Plaintiff to the 1 st Defendants premises for official handover. 3.101 The witness submitted that he was on the 4 th day of 2018 in contact with the Plaintiff's managing director PWl, via phone and subsequently delivered to him a letter which he acknowledged and signed for. 3.102 The witness stated that following his explanation of the capacity within which he had contacted PWl as well as his instructions from the Defendant, PW 1 refused to deal with Blitz Consultants and did not engage any further. 3.103 The witness testified that he physically met PW 1 on several occasions at a farm in Chisamba and all such meetings were reported to the 1 st Defendant and are documented. 3.104 The witness also stated that PW 1 was as well informed that payments in pursuance of debt recovery were made in the name of the Plaintiff and invoices were subsequently prepared to this effect in order for commission to be paid out to Blitz Consultancy. J57 3.105 In cross - examination, the witness stated that he proceeded to recover money form the Plaintiff in 2019, as he was instructed to do so· by the Bank despite no letter of instruction for that year being placed on record. He also stated that he dealt with the Plaintiff's Director PW 1 on several occasions, specifically over seven meetings and the only time the Plaintiff director rejected to deal with him was on their meeting on the 4 th of August at which meeting PWl demanded ' to know whether the witness had been appointed by the 1 st Defendant. 3 . 106 DW3 also clarified that following issuance of letters for him to collect debt, whether or not the debt has been collected, another letter has to be issued by the appointing party - in this case the 1 s t Defendant and it is from this correspondence that he would receive further information concerning debts his company is appointed to pursue. 3.107 The witness stated that he did prepare a letter to the Plaintiff demonstrating that he was appointed debt collector on behalf of the 1st Defendant and PWl refused to acknowledge the same. 3.108 DW3 confirmed that the Plaintiff never paid him any money directly and his tax invoices were based on the conversations he had had with the Plaintiff who's record he'd J58 update after being informed of payments having made toward arrears. 3.109 In re - examination, DW3 clarified that he worked under both written and verbal instructions of the 1 s t Defendant 1n relation to the debt recovery from the Plaintiff. 3.110 The witness also clarified that the manner in which he operated was that the Plaintiff would inform him of the amount paid in satisfaction of the debt and he would then verify with the 1 st Defendant, after which an invoice would be issued. 3.111 The first witness on behalf of the 2 n d Defendant 2DW1, was Carlos Banda, the Bank Assurance Manager of the 2 n d Defendant Company. He stated through his witness statement of 18th May 2021 that: in 2013 the 1 st and 2 nd Defendant entered into an agreement for the latter to provide insurance cover for Motor Vehicles least to the 1 s t Defendant's clientele. 3.112 He submitted that in 20 15 and 2015, the 1s t Defendant procured insurance policies on behalf of the Plaintiff from the 2 nd Defendant for Toyota Land Cruiser registration number AJD 4 731 and Land Rover Discovery Registration number ALZ 41. 3 . 113 According to the witness, the insured amounts as provided by the 1 st Defendant to the 2 n d Defendant, were USO 70,085.29 for the Toyota Land Cruiser V8 and USD 91, 400 for the Land Rover Discovery J59 3 . 114 That the annual premiums in USD for each car were charged as follows YEAR DISCOVERY ALZ 41 LAND CRUISER AJD4371 322.39 5, 045.28 3,868.68 VAT inclusive 3, 873.48 3,448.20 VAT inclusive 3, 873.48 3, 448.20 Insurance Levy inc 3, 873.48 3,448.20 Insurance Levy inc 3, 873.48 3, 448.20 Insurance Levy inc 3.115 According to the witness, each premium represents insurance cover for a twelve-month period beginning from November, 2014. 3.116 The witness provided that premiums payable would be calculated as a percentage of the insured sum and VAT was charged on the premiums until 31 s t December 2015 when it was repealed. 3 . 117 In addition, the witness stated that while the Plaintiff and 1 s t Defendant were at liberty to vary the insured sum, the insured sum remained constant though from the commencement of the agreement until the commencement of this action. J60 3.118 In cross- examination, the witness provided that premium payments made on behalf of the Plaintiff by the 1st Defendant were based on invoices the 2nd Defendant would issue to the 1 st Defendant Bank through its broker MiNET Zambia. He explained that because the 2 nd Defendant has a number of customers through the 1 st Defendant Bank, the Bank would provide a report of all such clients due to paf at the end of every month and when such report is released to the 2 nd Defendant, the broker on the 2nd Defendant's behalf would invoice the 1 st Defendant Bank in relation to such accounts. 3.119 The witness also stated that he was aware that the Plaintiff and its director never had any direct dealings with the broker MiNET. He did however state that the Plaintiff had dealings with the 2 nd Defendant albeit indirectly. 3.120 As far as the witness was aware there was no mention by the 2 nd Defendant to the Plaintiff to effect or consider the adjustment of premiums. 3.121 The witness also noted that the Plaintiff exhibited within its documents a certificate of comprehensive motor insurance obtained from Savenda General Insurance Limited effective 1st October 2019, and expiring on the 30th of September 2020. The said insurance company insured the vehicle for USD 44,860.00 charging premiums of USD 1, 293. 76 whereas the 2 nd J61 Defendant in that very year insured the vehicle for USD 70, 085.29 charging premiums of USD 3, 448.20 in prior months. The witness stated that ·where the 2 nd Defendant insurance company was not notified or told, they would not know the market value of the vehicle within a particular period. 3.122 The witness stated that the regulator has given authority to insurance companies such as the 2 nd Defendant to distribute their insurance policies through the Bank and the 1 s t Defendant in this case had the right as they are the first loss payee or absolute owners of the assets insured. 3 . 123 The witness clarified that the amounts paid as premiums are not indicated in the certificates of insurance as all certificates as a matter of fact appear that way. He stated that because the certificate of motor insurance is not the only document that makes up the insurance, premiums were indicated on other documents and the Plaintiff were in search of such information was obliged to check with the 1 st Defendant Bank. 3 . 124 The witness stated that while the specific VAT amount was not indicated as the premium amounts were charged inclusive of VAT. VAT was collected by the broker and not paid to the 2nd Defendant but to ZRA. J62 3.125 The witness submitted that he was aware that beginning January 2016 VAT on insurance services at 17% was banned and what was instead introduced was a 3% insurance Levy. The witness stated that according to the documents shown to him the 1st Defendant continued to charge VAT on insurance to the Plaintiff after 2016. 3.126 When queried the witness stated that the calculations provided by the 2 nd Defendant showing insurance levy and VAT were all the 2 n d Defendant provided in accounting for the same despite the insurance levy and VAT being at the heart of the matter. He provided that in his opinion the said table was deemed sufficient and though VAT was stated as "inclusive" as opposed to calculated he stated that calculations at 3% could still be made via the table to arrive at the sums required 3 . 127 In response to the email of 05th March 2020 authored by one Mwewa Kayamba, an employee of the 1s t Defendant Bank, wherein the sender stated that upon examination the insurance premiums charged on the 1 st Defendant's statements appeared to be slightly high as he was on a monthly rate of 0 .364% the witness stated that annual rates which are collected at once are generally lo~er than short period rates that are collected monthly or overtime and therefore the latter will be slightly higher. J63 3.128 In cross examination, the 2 nd Defendant's 1st Witness clarified that the 1 st Defendant Bank was a distributor of the insurance policy on behalf of the 2nd Defendant insurance company. He also stated that the sum insured was stated under clause A 7 of the insurance policy; the same being the amount specified at the time of application for the policy which is also stated on the certificate of insurance. 3.129 He also stated that as per clause A 7 the Plaintiff was under obligation to update the sum insured with the 1 st Defendant Bank in accordance with the market value of the vehicle and throughout the period of insurance the 2 nd Defendant did not receive any notification that the value of the vehicle had been updated. 3.130 The witness stated that the regulator Pensions and Insurance Authority (PIA) reviewed the contract of insurance between the parties which is a contract of indemnity and explained to the Plaintiff the basis of indemnification which is the market value or insured sum - whichever is lesser because they seek to put the Plaintiff client in a position where the client can benefit from a higher amount in the event of loss happening. The witness also stated that within the same communication PIA confirmed that the licensed status of the 1 st Defendant was that it is neither an insurer nor a broker. J64 3.131 According to the witness, PIA had properly clarified the matter concerning the question of overcharged premiums and stated that the same was not overcharged as Plaintiff had instead consented to the premiums that were charged by the 2 nd Defendant. 3.132 The witness explained that the broker MiNET issued invoices which the witness would also receive-and ultimately the 2 nd Defendant would receive the money remitted under the insurance policy, this was demonstrated by the statement of the 2 nd Defendant produced into evidence. He stated that insurance premiums and VAT were accounted for as a block figure and after 2016 the same included insurance levy. 3.133 In re - examination, the witness stated that because the 2 nd Defendant in some instances such as this may not have direct contact with clients such as the Plaintiff, all relevant and necessary information is placed in the insurance policy which sets out terms and conditions that the client, may consent to by signing the document. 3.134 He also clarified that the system in prior use by the 2 nd Defendant which is similar to the one that the broker uses is one that would allow one to charge VAT combined and once the law changed the system as well changed. J65 3.135 The 5 th witness 2DW2, in the matter was a subpoenaed witness on behalf of the 1st Defendant, George Mwale the Director of Design, Monitoring and international Relations in indirect taxes at the Zambia Revenue Authority (ZRA). He testified that Bank statements do qualify as tax invoices because section 52 of the VAT Act on administrative rules bestows power upon the comm1ss1oner general to set administrative rules under subsidiary legislation using: Gazette . notices, therefore by use of this power the Commissioner General issued Gazette Notice Number 46 of 2014 on the 24th January 2014 in which there is VAT rule number 3 on tax invoices. This rule (number 3) prescribes the requirements of tax invoices and also provides: that for Banks registered under the Banking and Financial Services Act, the Bank statement shall qualify as a tax invoice. 3.136 The witness explained that for the purpose of Rule 3, a Bank statement that contains the amount received or paid and who the paying party is. He cited an example averring that where anyone provides services to a company that is remotely located and the said company does not provide the service provider with a tax invoice yet the service provider's Bank account has been credited, such Bank account would show the name of the payer or vice versa. The amount that will show on the Bank statement will show who the payer is, and in that case, if a tax invoice has not been submitted to the party in need of it, such party can use their Bank statement to claim input tax J66 credit or tax deduction as the party submits their VAT returns. Where auditor form ZRA carries out an audit on such books and wants to see the invoice against which a certain amount is being claimed, Bank statements may be furnished and the same would suffice as evidence for the tax invoice in accordance with Rule 3. 3.137 When referred to the ZRA VAT guide prociuced before court specifically at part 7 titled 'Bank Statements', the witness testified that the Bank statement is required to show the following details: 1. the details (name) of the Bank that has issued the said statement, 11. 111. the TPIN number of the Bank, the month of the Bank statement, 1v. The Description of the service rendered - this is limited to the space that the statement allows as one cannot enter a long statement in describing. Therefore, though the guidelines show descriptions of services it will be summarized, v. The total supplies of the month split in standard rated and zero rated. 3.138 The witness stated that because this is a Bank statement as opposed to a normal invoice that has more details, a provision has been made to accept a Bank statement because it J67 will tie the recipient of the credit to the payee and therefore so the afore listed is sufficient detail for the ZRA to carry out further checks should that be required. The witness also stated that where payment is being made to an account in some instances there are no descriptions of the principal amount etc, where block payments are made it is known to ZRA officers that VAT is included and therefore auditors ofZRA using a VAT ratio, use specific rates to easily determine whether VAT being ' claimed against such amounts are correct. 3.139 When referred to the Bank statements issued by the 1 st Defendant and exhibited within the matter the witness testified that the said Bank statements show that they were issued by the 1 st Defendant, they show the TPIN number of the Bank, the name of the account holder, the TPIN number of the account holder, a VAT registration number, the address of the account holder, the transaction details, the date, description which is split into standard rate and zero rated, a total rate of VAT charged in the month and the same relates to a Finance Lease Agreement as described. He stated that the statement had items described as VAT within it however there were some entries which had no VAT indicated and therefore such farm cannot be depended on from a VAT point of view and therefore source documents are required to determine whether entries are VAT inclusive or not. J68 3 . 140 The witness, in conclusion of his examination in chief, stated that one important point to note is that according to section 18 VAT Act, when filing a claim for return; the tax payer must be in possession of the tax invoices against which they are making a claim, not copies in order that the auditor verifying the same can have access to the same, similarly in the case of the Bank, the original Bank statement must be provided. 3.141 In cross - examination, the witness stated that he never dealt with the Plaintiff directly. 3 . 142 He also stated that he is aware of section 11 of the Value Added Tax Amendment Act no 12 of 2017, which made it mandatory for suppliers to provide tax invoices and therefore the guidelines afore-highlighted have not taken away or abrogated the need for a tax invoice. 3.143 He also provided that the entries within the Bank statements produced for the purpose of ZRA are not sufficient and more documents would have to be sourced. 3.144 When asked whether the Bank statements produced in the matter fully comply with the requirements at part 7 of the ZRA Guidelines, the witness stated that because Banks statements are different from Bank to Bank auditors would in this case have to confirm whether the document produced complies with requirements such as whether it is standard rated, exempt or J69 zero rated etc. He stated that the requirements at part 7 are just a guide and depending on the systems of Banks they fashion statements to allow all or such information and where further information is required supporting documentation would have to be added. The witness stated that if the Bank statement can justify what is claimed it will be equivalent to a tax invoice for the purpose of ZRA. 3.145 The 6 th witness, 1DW3, in the matter was a subpoenaed witness on behalf of the 1 st Defendant was Luwaile Mwenya an information and technology architect in the 1 st Defendant Bank. He testified that as an information and technology architect, he is responsible for developing systems and making sure that the systems work according to their appropriate use. 3.146 He averred that that the server of the 1 st Defendant currently sits in South Africa this means that that it is a virtual server and the only people allowed access to the same are administrators. 3.147 He further averred that the application on the server that generates e emails and the actual statement of account is the front-end system where the users create profiles for customers and also input information therein. He stated that the back end is inside the actual server where the data is stored. 3.148 According to the witness he logs on to the server using the server IP address. Once that is done, the files that are created by the front - end system ·come up which are statements. The witness made a physical demonstration of the same while in court, he accessed the folder VAFSTMNT - and stated that it is an abbreviation of VAF statements which means Vehicle and Asset Finance Statements. Within this there is an e-mail folder which contains e-mail statements and within that folder is a ' sub folder which contains sent e-mails. In opening the sent folder he testified that the same carry a date of when they were sent and provided that the folder dates back to 2014. Each of the dates according to the witness contain the mailing list of the successful e-mails that were sent as well as a copy of the actual statement that is attached to the e-mail. 3.149 The witness who stated that e-mails were automatically sent by the front-end system of the server also stated that the Bank Statements exhibited within the matter were generated form the Loan Management system which sits on the front-end system of the 1st Defendant's server. He stated however that he is not the one who printed them. 3.150 In cross - examination, the witness stated that he did not have any evidence whether the emails were received by the Plaintiff only sent to him. The witness also stated that he did not know who generated the Bank statements exhibited in the matter herein for purposes of these proceedings as he would J71 have to check the Loan Management System to obtain such information, for this reason he wasn't aware of who availed the 1 st Defendant's counsel the same. 3.151 In re - examination, the witness clarified that the reason he was not aware whether the Plaintiff had received the e-mails or not is due to the fact that the mail server on the receiver's end is not managed by the 1 st Defendant, tlius access by them to the same is restricted or not possible. 4.0 SUBMISSIONS 4 .1 The averments of both parties' submissions are similar to what is contained in their evidence and pleadings save for the following facts: 4.2 In the Plaintiffs submissions of 10th September 2021, the Plaintiff provides that the 1 st Defendant Bank breached its fiduciary duties of acting in the best interest of its customer the Plaintiff and was not responsible for upholding good customer protection under the Code of Ethics and Banking Practice 2020, which is now part of the Banking Law in Zambia as per the Supreme Court case of Stanbic Bank Zambia Limited v A. Sand Enterprise and 2 Others (2008) ZR 259. 4.3 The Plaintiff provides in relation to its claim for the refund of the amount of USD 17,508.39 in overcharged premiums that J72 debited to its account that the same ought to be based on the retail value of the Motor - Vehicles. It is submitted that the Plaintiff never agreed to paying premiums for the entire 5 years at the same amount based on brand new or show room value of the vehicles. Citing Halsbury's laws of England 5 th edition 2011, volume 60, paragraph 151, Madison General Insurance Limited v Avril Cornhill and Michael Kaloma Appeal 9/2017, the Plaintiff provides that 'it is not bound by the high unchanged premiums over the 5 year tenure of the V AF facility. 4.4 Citing Thomson v Weems and Others (1884) AC vol IX, and Gemstar Holdings Limited v Afgri Corporations SCZ 183 of 2014, as adopted by Stanbic Bank Zambia Limited v Bruce Mwewa Appeal no 112 of 2020, the Plaintiff provides that the Defendant cannot hide behind any ambiguity in the contract as the Contra preferentum rule applies. 4.5 The Plaintiff also states that the arrangement that existed was unfair and amounted to an unfair contract term under Section 118 of the Banking and Financial Services Act no 7 of 201 7. 4.6 The Plaintiff provides in relation to its claim for a refund of USD 30, 467 in respect of value added tax that despite the undisputed fact that the 1st Defendant was debiting VAT to the Plaintiffs Bank account: the Bank statements could not be J73 provided as tax invoices in order to claim a VAT refund with the ZRA and the Plaintiff not receive any of these Bank statements. 4. 7 The Plaintiff citing 18(3) of the Value Added Tax Act Chapter 331 of the Laws of Zambia, section 7(3) of the Value Added Tax (Amendment) Act No 12 of 2017 provides that it is mandatory that tax invoices in respect of goods and services supplied are issued. 4.8 The Plaintiff also submits that subsidiary legislation cannot alter or amend the provisions of a principal act as per the cases of Yonah Shimonde freight and Liners v Meridien Biao Bank (Z) Limited SCZ No 7 of 1999 (1999) ZR page 47, and Cape Brandy Syndicate v Inland Commissioners ( 1921) ALL ER 64, as adopted by Hon Mr. Justice C Kajimanga (as he then was) in Zambia Revenue Authority v Stallion Motors Limited, African Cargo Services Limited 2009/HPC/0575. 4. 9 The Plaintiff provides in relation to its claim for a refund of USD 6,039.00 in debt collector charges that it never received any visit nor letter from a debt collector but debt collection fees by a debt collector were recovered from it. Citing the case of Citizens Economic Empowerment Commission v Mercy Mwambazi, Sunday Mwambazi 2016/HP/2230 the Plaintiff states that no monies have ever been collected form the Plaintiff by any debt collector to warrant payment of the said debt collector's fees. J74 4.10 In relation to the claim for VAT on insurance debited after 1st January 2016, the Plaintiff provides that its Bank statement shows that the 1 st Defendant was debiting VAT even after 1 st January 2016, and the said debits have the narration 'VAT ON INS' and amount to USD 10, 199.45 in total. The Plaintiff citing section 4 (2) of the Insurance Premium Levy Act no 21 of 2015 provides that value added tax is not payable on insurance premiums. 4.11 In relation to the claimed Damages for Loss of Business arising out of the Plaintiff being wrongly listed with the Credit Reference Bureau, the Plaintiff citing the case of Savenda Management Services v Stanbic Bank Zambia Limited Selected Judgment No 10 of 2018 provides that it is a mandatory requirement for the service provider to give a defaulting person a written reminder within 30 days from the date of default and only unless the money is paid within 60 days of default can the defaulter be listed with the agency. 4.12 In the 1 st Defendant's submissions of 19th January 2022, the 1 st Defendant provides that the Plaintiff has failed to discharge its burden of proof and is not entitled to any of the reliefs sought. The 1 st Defendant provides that all claims of the Plaintiff relate to a dispute between the Plaintiff and 2 nd Defendant and as per the doctrine of privity of contract the 1 st Defendant was not privy and cannot be liable for claims related to the Comprehensive J75 Insurance Motor Policy (the insurance policy) entered into between the Plaintiff and 2 nd Defendant. 4. 13 In relation to the alleged overcharge in insurance premiums citing the Banking Facility Letter, the V AF terms African Banking Corporation Limited v Plinth Technical Works and 5 Others SCZ Judgment No 28 of 2015, Printing and Numerical Registering Co v Sampson ( 1875) L. R 19. Eq. 462, and Kalusha Bwalya v Chadore Properties and Ian Chamunora Nyalugwe Haruperi Selected Judgment No 20 of 2015, the 1st Defendant provides that the Plaintiff cannot escape liability as it is bound by the terms of the documents it signed. Further that the Plaintiff was charged contracted premiums and its allegation of being overcharged is anchored on a misunderstanding and misconstruction of the terms of the policy. 4.14 The 1st Defendant provides, in relation to the submission that the Insurance Policy relates to an unfair contract contrary to the Banking and Financial Services Act No 7 of 201 7, that the act does not apply because the insurance policy was executed in 2014. It further submits citing section 118 of the said act that the provisions of the policy cannot by any measure be deemed to be unfair. J76 4.15 The 1st Defendant also submits citing Principles of Equity, Megarry R. E and DV Parker, 26th Edition, London Sweet and Maxwell at page 37, that the Plaintiffs claim is statute barred causing the Plaintiff to have no locus standi before this honorable court. 4.16 Citing Section 18(3) of the Value Added Tax Act the 1 st Defendant avers that a Bank statement shall qualify as a tax invoice and therefore the Plaintiffs allegations are premised on a grave misapprehension of the law. The 1 s t Defendant also submits that according to the waiver of indemnity, the Plaintiff elected to receive its Bank statements by e-mail and allowed communications via telephone and other electronic medium. 4. 1 7 In relation to the alleged charges of VAT on insurance the 1 st Defendant submits that such allegation is unsubstantiated by evidence and the same has not been proved. The 1 s t Defendant further submits that the claim for a refund of USD 4,917.47 for debt collector charges is as well unsubstantiated because the Plaintiff is bound by the VAF terms wherein it consented to being liable for debt collector's fees. 4. 18 In relation to the claim for damages for loss of business due to the listing of the Plaintiff with the Credit Reference Bureau, the 1 st Defendant provides that it did notify the Plaintiff on numerous occasions that failure to settle its amounts would result in its details being provided to the Credit Reference J77 Agency. The 1 st Defendant also provided that it did write a letter to the Plaintiff explaining to it the CRB listing and all was executed in line with terms of the VAF Facility. In addition, the 1st Defendant avers that the Plaintiff has not tendered any evidence to prove that his loan with 1 st Capital Bank was declined because of the CRB listing and therefore fallowing this and the cases of Phillip Mhango v Dorothy Ngulube & Others 1983 ZR 61, Musingah Daka (1974) ZR 37, J. Z Car Hire . Limited and Malvin Cala Scirocco Enterprises Limited (SCZ Judgment No 26 of 2002), Savenda Management Services v Stanbic Zambia Limited Selected Judgment No 10 of 2018 failure to prove special damage by a Plaintiff is fatal to their claim and special damages must be carefully and correctly pleaded and particularized. 4.19 In relation to the counter - claim the 1 st Defendant submits that it is entitled to payment of USD 23, 239.68 due and owing under the VAF facilities and a total of USO 6, 441.38 being total debt collectors fees owed under both leases. 4.20 In the 2 nd Defendant's submissions of 19th October 2021, the 2 nd defendant provides in relation to the claim for a refund of ISO 17, 508.89 by the Plaintiff that the contract of insurance was renewed about four times and the Plaintiff was at liberty to adjust the insured sum any of these times. The 2 nd Defendant avers that it provided insurance cover for the amount provided and no claim was made during the period the 2 nd Defendant J78 provided insurance over for the Plaintiff causing it to be impossible therefore to reopen the concluded contract and vary terms after the fact 4.21 In relation to its claim for a declaratory order that the Defendant's ought to have based premiums on the retail value of the Motor Vehicles and not the Insured sum, the 2 n d Defendant submits citing Christopher Lubasi Mundia v Sen tor Motors Limited ( 1982), National Milling Corporation v Angela Chileshe Bwalya Silwamba Appeal No 1717 of 2015 (unreported) and Colgate Palmolive (Z) Inc v Shemu and Others that a declaration is a discretionary Judgment that must be granted with care and caution and the court cannot renegotiate a contract on behalf of parties. 4.22 The 1 s t Defendant further submits that the claim for a declaratory order that the arrangement amounted to unfair contract terms under section 118 of the Banking and Financial Services Act must fail as the act does not apply to the 2 nd Defendant and the services it offers its clientele which are insurance contracts regulated by the Insurance Act No 38 of 2021. 4.23 In relation to the claim for a Refund of VAT on insurance premiums in the sum of USD 17, 786.45 citing Khalid Mohamed v the Attorney General ( 1982) ZR 49 and Wilson Masauso Zulu v Avondale Housing Project (1982) Z. R 172 J79 the 1st Defendant provides that a Plaintiff must prove his case and the mere failure of the opponents Defence does not entitle him to Judgment. The 1 st ·Defendant states that the narrations on the Bank statement of 'VAT on INS' by the Plaintiff to mean VAT on Insurance are merely speculative and not proven and his claim cannot therefore be sustained 4.24 Citing Thomson v Weems and Others (1884) AC vol IX and Gemstar Holdings Limited v Afgri Corporation SCZ 183 of 2014 as adopted by Stanbic Bank Zambia Limited v Bruce Mwewa Appeal no 112 of 2020, the Plaintiff provides that the Defendant cannot hide behind any ambiguity in the contract as the Contra preferentum rule applies. 4.25 The Plaintiff also states that the arrangement that existed was unfair and amounted to an unfair contract term under section 118 of the Banking and Financial Services Act no 7 of 201 7. 4.26 The Plaintiff provides in relation to its claim for a refund ofUSD 30, 467 in respect of value added tax that despite the undisputed fact that the 1st Defendant was debiting VAT to the Plaintiffs Bank account: the Bank statements could not be provided as tax invoices in order to claim a VAT refund with the ZRA and the Plaintiff not receive any of these Bank statements. J80 5.0 JUDGMENT 5 .1 I have carefully considered the pleadings in this case as well as the Witness Statements admitted in evidence. I have also analysed the evidence from cross-examination of the parties and finally, perused the submissions of all parties in support of their respective cases. CLAIM FOR THE REFUND OF THE SUM OF USD 17, 508, 39.00 ALLEGED INSURANCE PREMIUM OVER-CHARGES. 5.2 The Plaintiffs claims from the Defendants a refund of the sum of USO 1 7, 508, 39. 00 being over-charges on insurance premiums debited to the Plaintiffs Bank account with the 1 st Defendant, which premiums were paid in respect of a comprehensive motor insurance policy no UCN: 38367680 dated 3 rd November 2014 for two motor vehicles availed to the Plaintiff through a Vehicle and Asset and Finance Agreement (VAF Agreement) dated 3 rd November 2014. 5.3 The Plaintiff and the 1 st Defendant company entered into the V AF agreement which agreement allowed for the purchase two brand new motor vehicles being: Land Cruiser V8 registration number AJD 4731 and a Land Rover Discovery ALZ 41 through Bank finance with the latter. The 1s t Defendant Bank on behalf of the 2nd Defendant insurance company and by authority of clause 5 of the VAF facility; distributed to the Plaintiff J81 comprehensive motor insurance policy UCN: 38367680 dated 3 rd November 2014 which provided comprehensive insurance cover for the two vehicles: Both agreements were executed by the Plain tiff signifying acceptance of the terms and conditions therein. 5. 4 The sum insured as provided for under clause A 7 of the Comprehensive Motor Policy states: "the value of The Vehicle specified by You at the time of Your application for this policy, as being applicable Market Value of The Vehicle at that time, including its accessories and spare parts (whether factory fitted or added subsequently) and VAT, which amount is specified in the Certificate of Insurance and should be updated from time to time at Your request in accordance with the current Market Value of The Vehicle." The Premium in accordance with the said policy is: "as stated in the Certificate of Insurance or any endorsement issued in terms of this policy" According to the 2 nd Defendant insurance company premiums payable are calculated at a percentage of the insured sum being as per description the value of the vehicle specified. J82 5.5 The Premiums payable for each vehicle as demonstrated by the evidence record is as follows: I. For the Land Rover Discovery: USD 5, 045.28 (being USD 420.44 per month) in the year 2015 later reduced to USD 3, 873.48 (USD 322.79 per month) in the years 2016 - II. For the Land Cruiser V8: USD 3, 868.68 (being USD 322.39 per month) in the year 2015, later reduced to USD . 3, 448.20 (USD 287.35 per month) in the years 2016 - Both are narrated to have been inclusive of Value Added Tax. 5.6 The rates at which premiums were initially charged in the year 2015 were later revised by the 2 nd Defendant as afore - highlighted. The sum insured however on which insurance premiums are calculated, for each vehicle from the initial date of their insurance with the 2 nd Defendant; was never adjusted. The sum insured for the Land Rover Discovery was USD 91, 400.00 and the sum insured for the Toyota Land Cruiser was USD70, 085.29 as per their respective certificates of Motor Insurance. 5. 7 Insurance premiums were debited by the 1 st Defendant who was first loss payee and paid to the 2 nd Defendant on behalf of the J83 Plaintiff in accordance with the V AF agreement and motor insurance policy. 5.8 The Plaintiff contends that its insurance cover or the premiums charged ought to have been calculated and based on the retail value of the vehicles in accordance with clause A8 of the insurance policy and that because the veli1cles were insured based on their original value, the company was therefore overcharged. clause AB of the Comprehensive Motor Policy provides: "Maximum Indemnity: the current Sum Insured specified in the Certificate of Insurance or the Retail Value, whichever is the lesser." The Plaintiff further states that it is not bound by the high unchanged premiums over the 5 year tenure of the V AF and Motor Policy Agreements as the contract terms were unfair because any pay-out of compensation would be at "retail value" and not the original invoice value. 5.9 It is trite law that contracts of Insurance are governed by the ordinary principles of contract law. H. G Beale's 'Chitty on Contracts'. Volume 2 (Specific Contracts) (9) defines an insurance contract as: J84 "A contract of insurance is one whereby one party (the insurer) undertakes for a consideration to pay money to provide a corresponding benefit to or for the benefit of the other party (the assured) upon the happening of an event which is uncertain, either as to whether it has or will occur at all, or as to,- the time of its occurrence, where the object of the assured is to provide against loss or to compensate for prejudice caused by the event ... When embodied in a document the contract is usually called a policy ... " 5.10 Chitty on Contracts (10) also provide concerning contractual agreements that: "Where an agreement of the parties has been reduced into writing and the document containing the agreement has been signed by one or both of them, it is well established that the parties signing will be bound by the terms of the written agreement whether or not he has read them or whether or not he is ignorant of their precise legal meaning." J85 5.11 It is also trite law that Public Policy allows men (and women) of full age and competent understanding as the parties herein to have the utmost liberty in contracting and that their contract when entered into freely and voluntarily is held sacred and shall be enforced by courts of justice. The law will seldom if at all interfere with the agreed terms of a contract between parties. I am fortified in this view by the cases of Printing and Numerical Registered Company v. Simpson ' ( 1), National Drug Company Limited and Zambia Privatization Agency v. Mary Katongo (2) and Colgate Palmolive (Z) Inc v Shemu and Others (3). 5.12 The agreements entered into between the Plaintiff and Defendants are definitive on their own terms which terms were agreed to by the parties themselves. Ewan McKendrick's Contract Law (11), at page 3, does provide that: "The Law of contract is perceived as a set of power conferring rules which enable individuals to enter into agreement of their own choice on their own terms. Freedom of contract and sanctity of contract are the dominant ideologies. Parties should be as free as possible to make agreements on their own terms without the interference of the courts or parliament J86 and their agreements should be respected, upheld and enforced by the courts". 5 . 13 In relation to The Agreement as to premium Halsbury's Laws of England (Volume 60) paragraph 151 (12) provides: "Agreement as to premium - There cannot be a contract of insurance unless and until the premium is agreed or there is some objective means of determining the amount of the premium. There need to be agreement as to the exact amount, provided the rate or basis of assessment is agreed." 5.14 The VAF agreement as well as the Motor Insurance Policy were signed by both parties causing them to be bound by terms of such agreement. While the Motor Insurance Policy speaks on indemnifying the insured at "the current sum insured specified on the Certificate of Insurance or the Retail value, whichever is lesser" it is specific as to what it deems to be the sum insured which is the sum on which premiums are calculated. This sum insured is the value of the vehicle specified by the insured (the Plaintiff) at the time of their application for the policy and the same being the applicable market value (retail value) at that time, the amount is specified by the insured and should be updated from time to time at the insured's request 1n accordance with the current market value of the vehicle. J87 5.15 In my view, the reason for such a term in the policy, in contrast to its terms on indemnity is because such insurance companies as the 2 nd Defendant issue out insurance to several customers for several different values or certain assets (insured goods). While they may not be able to keep up with all customers and evaluate their insured assets (in this case the Plaintiffs Motor Vehicles) from time to time to determine their retail value, the . customers themselves as per the terms and conditions of the insurance policies are able to determine and notify the insurer of the diminishing (or appreciating) value of their insured asset and demand insurance cover based on the same. The insurer intends not to suffer severe loss where the insured has neglected to inform them of the diminishing ( or appreciating) value of the asset insured, this is the reason; at the point of indemnification in the event of loss the insurer will make their own assessment of the sum appropriate to indemnify their customer. 5.16 It was therefore incumbent as per the terms and conditions of the Motor insurance policy, on the Plaintiff to inform the 2nd Defendant of the Market Value of the Vehicle prior to the (yearly) renewal the Comprehensive Insurance Cover in order that the sum insured and premiums could consequently be adjusted. 5.17 While the Plaintiff provides that did complain of or contest the allegedly overcharged insurance premiums, he did not in J88 accordance with the agreement inform or specify to the 2 nd Defendant the Market Value of the vehicle and his intent to adjust the same within the Comprehensive Motor Insurance Policy prior to its (annual) automatic renewal. I sympathise with the Plaintiff who did not have direct communication with the 2 nd Defendant at the beginning of his policy, he would however have requested the contact details from the 1 st Defendant who acted as its distributor or indeed the Pensio~s and Insurance Authority (PIA) its regulator. 5.18 The power to contract as well as the terms which would govern the parties therefore, lay with the parties herein and should not be interfered with by the courts especially provided that the contracts are concluded or beyond their expiry. 5 . 19 In addition, it is irrelevant as to whether or not the Plaintiff read the clauses of the agreement or not as the same bearing his signature results in him being deemed to have read and agreed the terms. I am fortified in this view by the holdings in the cases of L'Estrange v F. Gracoub Limited (4) and Parker v South Eastern Railway (5) in which it was stated: "the fact that L'Estrange had not read the clause was immaterial, and the fact that she had signed it meant that she was bound by it having been deemed to have read and agreed the terms of the contract." J89 "In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents." 5.20 The reason for that such principle is closely safe-guarded and upheld by the law and courts of law is to prevent parties who freely and voluntarily enter into contractual agreements from easily relinquishing their obligations once such obligations become for them; weighty or undesirable. 5.21 Section 118 of the Banking and Financial Services Act (13) provides that: "118. (1) An unfair term in a contract concluded with a customer by a financial service provider shall not be binding on the customer. (2) A contractual term shall be regarded as unfair if (a) it has not been individually negotiated; and (b) contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the customer." J90 Section 2 of the said act further provides: "financial service provider" means a Bank, financial institution or financial business; 5.22 I posit that by this definition the 2 nd Defendant who is regulated by the Pensions and Insurance Authority (PIA) and not under the Banking and Financial Services Act is not a financial service , provider. 5.23 In any event the 2 nd Defendant is closely regulated to the effect that even forms submitted as policy forms are reviewed under the Insurance Act (section 23 & 24) ( 14), where such forms as the Motor Policy of the Plaintiff are deemed suitable for distribution and approved by the regulator, the court will seldom interfere. CLAIM FOR THE REFUND OF THE SUM OF USD 30, 467.12 OR SUCH OTHER AMOUNTS DEBITED TO THE PLAINTIFF'S BANK ACCOUNT IN RESPECT OF VALUE ADDED TAX (VAT). 5.24 The plaintiff claims for the 1s t Defendant a refund of USD 30, 467.12 or such other amounts debited to the Plaintiff's Bank account for Value Added Tax (VAT) without proper tax invoices which has resulted in the Plaintiffs failure to claim a VAT refund from the Zambia Revenue Authority. The Plaintiff also J91 claims an order or declaration that the 1 st Defendant breached provisions of section 7 (3) of the Value Added Tax (Amendment) Act no. 12·of2017 5.25 It is not in dispute that the 1 st Defendant debited VAT to the Plaintiff's Bank account in respect of the leases subject of these proceedings. The Plaintiff placed on record that its director on behalf of it as a business submits VAT returns, the business is ' therefore a VAT refund receiver and entitled to reclaim VAT on the vehicles leased by the 1 st Defendant Bank. The Plaintiff, also provided that he has not to date reclaimed the said VAT from the Zambia Revenue Authority (ZRA). 5.26 It is a matter of fact that the Plaintiff did on the 3 rd of February 2020 via e-mail to agents of the 1st Defendant request the said tax invoices. It has also not been disputed that the Plaintiff made several other requests for Tax invoices from the 1 st Defendant which requests were not acted upon. I note that on the 05th of March 2020 the 1 st Defendant attached two invoices in respect of the two leases, the same being: I. Tax invoice number 8992 for USD 7, 939.99 dated 16th June 2019 II. Tax invoice number N15042820 for USD 9, 417.62 dated 16th June 2019 J92 5.27 The 1st Defendant contends that the Plaintiffs claim is statute barred as clause 3.1.2 of the VAT guide states: "Input tax cannot be reclaimed after a specified period (currently three months) from the date of issue of the tax invoice ... " The 1 s t Defendant provides that the claim for a refund to ZRA was not made by the Plaintiff within the specified period of three months. The 1 st Defendant also contends that the Plaintiff has no locus standi in the matter because all VAT was paid to the Zambia Revenue ' Authority (ZRA) and it is only the ZRA that can make a claim against the 1 st Defendant in this instance. Finally, the 1 st Defendant contends that the Bank Statements as per section 18 (3) of the Value Added Tax Act (15) allow for Bank statements to be treated as Tax invoices. 5 .28 Section 18 (3) of the Value Added Tax Act ( 15) provides the following: "(3) Input tax shall not be deduced, credited or claimed unless the registered supplier, at the time of lodgment of the return in which the deduction or credit is claimed, is in possession of a tax invoice, or other evidence satisfactory to the Commissioner-General, relating to the goods or services in respect of which the tax is claimed or, in the case of imported goods, such documentary evidence of the payment of tax as the Commissioner-General may, by administrative rule, prescribe; and a person claiming input tax in J93 contravention of this section shall, unless he satisfies the court to the contrary, be deemed to have taken steps for the fraudulent recovery of tax in contravention of section forty-four." Section 7(3) of the Value Added Tax (Amendment) Act (16) provides: "(3) A taxable supplier under subsection ( 1) shall issue a tax invoice in respect of goods and services supplied. (4) A taxable supplier who fails to issue a tax invoice under subsection (3) in the form and manner prescribed by the Commissioner-General from an approved computer package, a preprinted tax invoice book or a Fiscalised Cash Register, commits an offence and is liable, on conviction, to a penalty not exceeding three hundred thousand penalty units or to imprisonment for a term not exceeding three years or to both" Section 2 of the Value Added Tax Act ( 15) provides: ""taxable supplier" means a person who is required by this Act to be registered" J94 Part 1.4.1 of the Zambia Revenue Authority VAT Guide further provides: "Taxable Supplier: A taxable supplier zs a person who is registered or is required by the VAT Act to be registered and includes tax agent or recipient of imported services. To be a taxable supplier, a person or business must deal in taxable supplies . or a combination of taxable and exempt supplies but not solely exempt supplies." 5.29 The 1st Defendant is under the Value Added Tax Act considered as a taxable supplier. The said 1 st Defendant is required under the act to issue a tax invoice in respect of goods and services supplied and a VAT refund can only be claimed or the Plaintiff where a tax invoice or other evidence satisfactory to the Commissioner - General in relation to the goods and services is produced. 5.30 While I take note that that Gazette Notices Number 663 of 2018 and Number 46 of 2014 (17) provide within the commencement and section 3(1) respectively, that: "IN EXERCISE of the powers contained in sections ten, eleven, twelve, thirteen, eighteen, twenty-seven, twenty-eight, fifty-two and fifty-three of the Value J95 Added Tax Act, Chapter 331 of Laws of Zambia (hereinafter referred to as "the Act") the following Rules are hereby made: 3. ( 1) A tax invoice is to be issued for all supplies of goods and services and shall include the following features: ..... . Provided that: (a) invoices from Electronic Fiscal Devices shall include the terminal identity number, fiscal code and quick response code; and (b) for Banks registered under the Banking and Financial Services Act, a Bank statement shall qualify as a tax invoice." I find that the Zambia Revenue Authority VAT Guide specifically at part 7 titled 'Bank Statements', gives further guidance on the format Bank Statements shall take in order for their acceptance in the place of standard tax invoices. It provides: "Banks registered as Commercial Banks under the Banking and Financial Services Act (CAP 387 of the Laws of Zambia) shall issue Bank statements as their tax invoices to their clients which will show the following features: 1. 11. Name of the Bank in a prominent place of the Bank statement: Tax Payer Identification number (TPIN) of the Bank; J96 111. Month of transaction; 1v. Date of the transaction; v. Description of the service rendered, tax liability (standard rated, exempt or zero rated), the amount charged before tax and the VAT charged Total supplies of the month split into standard rated, exempt and zero-rated supplies v1. v11. Total VAT charged- in a month v111. Page numbers of the Bank statement e.g. 1 of 3, 2 of 3 and 3 of 3 5.31 It has been proven both in evidence and by perusal of the Bank statements provided to the Plaintiff the format of the same are unacceptable to be submitted in the place of tax invoices for the purpose of claiming a VAT refund as required. The subpoenaed expert witness on behalf of the Zambia Revenue Authority placed on record that not only were the same unacceptable as they were not fully compliant with part 7 of the ZRA VAT guide because some entries had no VAT indicated, the same were copies and original Bank statements in the place of a original tax invoices are required as per section 18 of the VAT Act. The witness stated that upon immediate perusal of the Bank statements provided by the 1 st Defendant one could not determine whether auditor would have to determine whether the tax liability is standard rated, exempted or zero rated and the auditor determining the case would have to determine the same J97 5.32 In my view, the reason to overlook principal legislation and resort to application of alternatives such as directives in subsidiary legislation and institution guides is to make procedure of compliance for large institutions such as the 1 st Defendant undemanding and generally easier. Because such institutions as the 1st Defendant Bank or Banks in general as a matter of standard procedure already issue Bank statements; it would not be uncommon to assume that they would cause the same to be issued in compliance with certain requirements for satisfaction of necessary claims such as VAT claims on behalf of their clientele. However, where such standard requirements are not met it should follow that in compliance with the law - the Bank should easily be able to issue necessary and sufficient tax invoices or other necessary documents where their clients such as the Plaintiff request them. 5.33 The time frame in my considered view bears no consequence as that is an issue to be borne with the Revenue Authority, the 1 st Defendant is mandated by law to issue its client with: (i) tax invoices in the first place or (ii) resort to documents alternative but sufficient and equivalent to tax invoices. The Defendant in this case performed neither causing it to be in breach provisions of section 7 (3) of the Value Added Tax (Amendment) Act (16). 5 .34 I am further fortified by the Supreme Court decision of Yonnah Shimonde, Freight and Liners v Meridien. Biao Bank J98 Limited (6), wherein it was adjudged that subsidiary legislation cannot alter or amend the provisions of a principal act. 5.35 I dismiss the Defendant's submission that the Plaintiff's claim is statute barred and the Plaintiff has no locus standi before me as the Law Reform (Limitation of Actions) Act 1939 Chapter 72 of the Laws of Zambia (18) provides that-an action founded on simple contract can be brought before the expiration of 6 years from the date on which the cause of action accrued. CLAIM FOR VAT ON INSURANCE DEBITED AFTER 1st JANUARY 2016 IN THE AMOUNT OF USD 17, 786 OR SUCH AMOUNT AS SHALL BE FOUND DUE AND AN ORDER DECLARING THAT THE DEBITING OF THE PLAINTIFF'S ACCOUNT WITH VALUE ADDED TAX (VAT) ON INSURANCE AFTER l st JANUARY 2016 CONTRAVENES SECTION 4 (2) OF THE INSURANCE PREMIUM LEVY ACT NO 21 OF 2015 5.36 The Plaintiff claims from both Defendant's a refund of VAT on insurance charged at USD 17,786.45 or such amount as shall be due and an order of this court declaring that the de biting of the Plaintiff's account with value added tax (VAT) on insurance after 1st January 2016 contravenes section 4 (2) of the Insurance Premium Levy Act No 21 of 2015. 5 .37 It is not in dispute that the Plaintiff's Bank account was debited with what is narrated on the Plaintiff's Bank statement as "VAT ON INS" witness also provided the 1 st Defendant Bank J99 continued to debit the Plaintiff's account with VAT after 1st January 2016 in contravention of the Insurance Levy Act no 21 of 2015 as the Plaintiffs Bank statement was debited with value added tax on insurance or "VAT ON INS" after 1st January 2016 to the end of the lease in 2019. 5.38 The Plaintiff provides that the said "VAT ON INS" is read to mean VAT on insurance and the Bank in contravention of the Insurance Levy Act no 21 of 2015 which abolished VAT being charged in insurance continued to Debit the Plaintiff's account with VAT after 1s t January 2016. 5 .39 The Defendant provides that "VAT ON INS" is read to mean VAT on instalment and the same would be charged to the Defendant in relation to instalments on the Plaintiffs account as per their Agreement under the VAF Facility. 5 .40 It is not in dispute that the vehicle leases executed between the Plaintiff and 1 st Defendant were structured in the manner that two bi - annual principal instalment payments on the leases would be made by the Plaintiff to the Defendant in June and December while interest on each of them would be paid in monthly instalments. Therefore, during the tenure of the leases, a total of 20 principal payments were due and payable by the Plaintiff to the 1 st Defendant. J100 5.41 I note from the record that starting 2016, the following "VAT ON INS" are recorded from the Plaintiff's Bank statement: 1st entry 2nd entry 3rd entry 1. 16/06/2016 2. 16/06/2016 3. 16/06/2016 4. 16/12/2016 5. 16/06/2017 6. 16/12/2017 7. 16/06/2018 8. 16/12/2018 9. 16/06/2019 10. 16/12/2019 1, 277.51 1, 277.51 1, 277.51 1, 274.36 1, 274.36 1,274.36 1, 274.36 1, 274.36 1, 274.36 1,274.36 From the narrations afore-highlighted it has been demonstrated that such "VAT ON INS" was applied bi - annually being in the months of June and December. The 1 st Defendant's first witness did speak to the charges in the month of June 2016 and stated that no reversals in that month were to be effected because such month was the month in which capital payment by the Plaintiff customer was due. 5.42 I have in addition perused the client statement of the 2°d Defendant pertaining to monthly premiums paid by the Plaintiff as well as the testimony of its witness pertaining to annual premiums paid by the Plaintiff which narrations are both stated to have included VAT / insurance levy whichever was applicable JlOl at the time and no such narration or sum was made in addition to the premium payments. 5 .43 It can only be logically concluded therefore that the narrations "VAT ON INS" which was applied bi- annually or in the months of June and December was Value Added Tax charged on the lease instalments and not insurance instalment payments which payments were applied monthly as per the statement of ' account. 5.44 Fortified by the case of Wilson Masauso Zulu vs Avondale Housing Project Limited (7), wherein the Court held: "A Plaintiff who has failed to prove his case cannot be entitled to Judgment, whatever may be said of the opponent's case." I find that the Plaintiff has not sufficiently proved its case on this limb. CLAIM FOR THE REFUND OF THE SUM OF USD 6, 039.00 DEBITED TO THE PLAINTIFF'S BANK ACCOUNT AS DEBT COLLECTOR CHARGES 5.45 It has been established from the record that the Plaintiff who had an agreement with the 1 st Defendant to make bi - annual lease payments together with monthly interest toward the J102 vehicle leases under the V AF Facility was in default of payment of his obligations from as early as 19th December 2016 wherein his Bank statement notes a reversal in the sum of USD 8, 601.66, I note among others that another reversal was effected in the amount of USD 8, 526.80 on 22nd June 2017. This demonstrates occasional delay in settlement of his obligations under the VAF Facility. 5.46 It was also established that the Plaintiff even to the close of proceedings was in default of his obligations of payment of the principal and interest under the VAF facilities. No evidence refuting the Plaintiff's claim for all sums due and owing by the Plaintiff under the Vehicle Asset Finance facilities numbers LUS01752L and LUS01724X was tendered before me. 5.47 The VAF Banking Facility Letter under clause 10.7 and 14.3 provide that: "10. 7 When you are in default you will be liable for default administration charges and collection costs" "14.3 You will also be liable for default administration and collection costs arising from your failure to comply with any of the terms and conditions of this Agreement and for legal costs and collection commission and on all payments made by you if the matter is ref erred to an external debt collection company or attorney. Default administration costs J103 determined by the Bank will be charged for every letter that we address to you." The VAF Banking Facility letter provides that a default of the client triggers charges and collection costs and failure to comply with any terms and conditions of the agreement will be referred to an external debt collection company or attorney resulting in administration and collection costs. 5 .48 The Defendant has proven that it was in touch with an external debt collection agency following the occasional defaults of the Plaintiff. I find the telephone communication informing the Plaintiff of debt collection charges sufficient notification of the intent by the 1s t Defendant to charge the same. This together with the Facility terms and conditions which the Plaintiff agreed to make the application of debt collection fee's justifiable. 5.49 Further fortified by the legal maxim one who comes into equity must come with clean hands. I find the application of debt collectors charges on the Plaintiffs account by the 1 st Defendant justified. The Plaintiff's claim on this limb also fails. J104 DAMAGES FOR LOSS OF BUSINESS ARISING OUT OF THE PLAINTIFF BEING LISTED WITH THE CREDIT REFERENCE BUREAU BY THE 1 st DEFENDANT 5.50 The claims within this suit relief in the form of damages for loss of business arising out of the Plaintiff being listed with the Credit Reference Bureau by the 1 st Defendant 5.51 It is not in dispute that the 1st Defendant listed the Plaintiff with the Credit Reference Bureau (Africa) Limited on the 10th of June 2019. 5. 52 I note that clause 16. 1. 3 of the terms and conditions of the V AF facility provides that: "We may provide a credit bureau with any of your personal information and data in connection with your application for finance, the commencement, the commencement and termination of this agreement and any related matter." 5.53 The information provided with the Credit Reference Bureau in relation to the 1 st is also not disputed as false or untrue. The 1 st Defendant however states that such listing caused its failure to obtain financing from First Capital Bank Limited that would enable the Plaintiff install a center pivot irrigation for 200 hectares of a newly purchased farm in 2018. The 1st Defendant contends that the said financing was declined by the Bank due JlOS to the listing of the Plaintiff with the Credit Reference Bureau by the 1st defendant. The Plaintiff therefore claims damages for the 200 hectares allocated for wheat that would have generated 1,800 tons of wheat at a price or USD 440.00 per ton. 5 .54 I note that there is on record communication between the Plaintiff and one Mr. Mehta of First Capital Bank regarding a loan from the Bank. In his response the latter provides: ' "We regret to inform you that we won't be able to accommodate the loan request from your end at this time. The main reason for the same being our internal appetite and current external affairs at the time." From such response reasons provided for the failure of the First Capital Bank Limited to grant the Plaintiff financing were listed within such communication. It is clear from the afore - highlighted that it is not the Plaintiffs listing with the Credit Reference Bureau that caused such failure or rejection. 5.55 Fortified by the case of J. Z Car Hire Limited v Malvin Chala, Scirocco Enterprises Limited (SCZ Judgment no 26 of 2002) (8) wherein the Supreme Court held J106 "This court has said in a number of cases such as Zulu v Avondale Housing Project and Mhango v Ngulube and Others that it is for the party claiming any damages to prove the damage, never mind the opponents case... In the present case, the court was not assisted by the appellant with any evidence at all. The evidence of carrying on car hire business was not enough to persuade the Court to make any meaningful intelligent assessment of damages." as well as the case of Savenda Management Services v Stanbic Zambia Limited (Selected Judgment No 10 of 2018) I find that the Plaintiff has not carefully and properly pleaded his damages and consequently his claim on this limb also fails. 5 .56 By reason of the fore-going I order the following: I. The Plaintiffs claim for the refund of the sum of USD 1 7, 508, 39.00 being alleged over-charges on insurance premiums debited to its account with the 1st Defendant fails. II. The Plaintiffs claim an order declaring that the Defendants ought to have based the monthly premiums on the retail value of the motor - vehicles and not the Insured Sum for a brand-new vehicle in accordance with Clause A 8 of the contract of insurance executed by the Plaintiff and 2 nd Defendant as well as an order or declaration that such an arrangement amounted to an unfair contract term J107 under Section 118 of the Banking and Financial Services Act no 7 of 2017 also fails. III. I grant the Plaintiff relief as against the 1 st Defendant, [in the sum of USD X / in the form of Damages] for amounts debited to its Bank account for Value Added Tax (VAT) for which tax the 1 st Defendant did not issue proper tax invoices resulting in the Plaintiff's failure to claim a VAT . refund from the Zambia Revenue Authority. I further order that the 1st Defendant breached the provisions of section 7 (3) of the Value Added Tax (Amendment) Act no. 12 of 2017. IV. The Plaintiffs claim from both Defendant's for a refund of VAT on insurance charged at USD 17,786.45 or such amount as shall be due as well as an order of this Court declaring that the debiting of the Plaintiffs account with value added tax (VAT) on insurance after 1st January 2016 contravenes Section 4 (2) of the Insurance Premium Levy Act No. 21 of 2015 fails. V. The Plaintiffs claim for the refund of the sum of USD 6, 039.00 debited to the Plaintiffs Bank account as debt collector charges fails. J108 VI. The Plaintiffs claim for damages for loss of business arising out of it's listing with the Credit Reference Bureau by the 1 st Defendant fails. VII. I refuse to grant the injunction as prayed. 5.57 With regard to the 1 st Defendant's Counter-claim, I consequently make the following orders: I. I grant the 1 s t Defendant payment from the Plaintiff all sums due and owed to it under the Vehicle Asset Finance facilities numbers LUSO 1752L and LUSO 1724X together with all the accruing interest until final payment; II. I grant payment of remaining fee's and charges if any, incurred by the 1 st Defendant in enforcing securities therein; III. I refuse to grant all other claims listed within the counter - claim. 5 .58 Each party bear their own costs. Delivered at Lusaka this 14th day of February, 2024. nave ewe re HIGH COURT JUDGE~ C M . .. . r ZAMBIA ••••.....• jJ~. H. .\ . ! U~T . 0 1v s1on -,mP.rcia ··:7 m . . 4 ~ , :-: L.lil~ . -A J109 .: ... OOE P. J. w~ :>J067, LUSAKA