Business Partners International SME Fund Zambia Limited v Kennedy Matashi T/A Ke (HPC 191 of 2018) [2007] ZMHC 2 (28 August 2007)

AL IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (CIVIL JURISDICTION) COURT 4UDICIARY'/11d 128 AUG 2018 L.. (cid:9) COMMCIML • °Ox 50067, LUS J REGIS TRI IN THE MATTER OF: ORDER 88 OF THE RULES OF THE SUPREME COURT, 1999 EDITION, VOLUME 1 IN THE MATTER OF: (cid:9) IN THE MATTER OF: (cid:9) ORDER 30 RULE 14 OF THE HIGH COURT RULES CHAPTER 27 OF THE LAWS OF ZAMBIA A THIRD PARTY MORTGAGE CREATED OVER PLOT 01/B/LO0CK C/01/01, OFF ALICK NKHATA ROAD, MTENDERE, LUSAKA IN THE MATTER OF: (cid:9) CORPORATE GUARANTEE BY THE 2ND RESPONDENT AND IN THE MATTER OF: (cid:9) FORECLOSURE OF PROPERTY PLOT 01/B/BLOCK C/01/01 OFF ALICK NKHATA ROAD, MTENDERE, LUSAKA PLEDGED AS SECURITY TO SECURE FINANCING FACILITIES HEREIN BETWEEN: BUSINESS PARTNERS INTERNATIONAL SME (cid:9) APPLICANT FUND ZAMBIA LIMKITED AND KENNEDY MATAHI T/A KENNEDY MATASHI TRADING 1ST RESPONDENT THE OK FOOD STORE LIMITED (cid:9) 2ND RESPONDENT Before the Hon. Madam Justice Mrs. Irene Zeko Mbewe For the Applicant: (cid:9) Mr. L. Linyama of Messrs Eric Silwamba, Jalasi & Linyama Legal Practioners ii I P a g e (cid:9) For the Respondents: (cid:9) N/A JUDGMENT The Applicant commenced legal proceedings by way of Originating Summons on 1411, May 2018 claiming for the following: 1. The immediate payment of all monies due which as at 1st day of April, 2018 stood at Zambian Kwacha One Million, Seven Hundred and Ninety Thousand and Ninety Nine (ZMW1,790,099.70) interest thereon, costs and other charges due and owing to the Applicant from the 1st Respondent under Loan Agreement dated the 41h day of august 2016 secured by a First Ranking Mortgage executed by the 1st Respondent over Plot 01/B/Block C/01/01, off Alick Nkhata road, Mtendere, Lusaka in Lusaka district of the Lusaka Province of the Republic of Zambia; 2. An Order for foreclosure and sale of the mortgaged property by the Applicant or its duly authorised Agents; 3. An Order for delivery of vacant possession of the mortgaged property by the 1st and 2d Respondents to the Applicant; J2 I P a g e 4. An Order that the 1st Respondent does pay the Applicant a royalty forthwith; 5. An Order that the 2nd Respondent do forthwith honour its guarantee to the Applicant; Further or other relief; and Costs and other charges incurred by the Applicant. 6. 7 (cid:9) In the supporting affidavit filed into Court on 14th May 2018 and I deposed to by Alison Lungu the Country Manager in the Applicant company, the salient facts are as follows: On 41h August 2016 the 1st Respondent was advanced a sum of ZMW1,2 14,000.00 (Exhibit "ALl"). On 411, August 2016, the 1st Respondent executed a Royalty Agreement and a Deed of Guarantee and Indemnity (Exhibit "AL2- 3") respectively. The security for the loan was a first ranking Mortgage over Plot 01/13/Block C/01/01 off Alick Nkhata Road, O Mtendere, Lusaka (Exhibit "AL 4"). According to the Applicant, the 1st Respondent loan as at 1st April 2018 is ZMW1,790,099.70 in respect of the outstanding balance on the account and ZMW525, 183.45 in respect of arrears on the J3 I P a g e account. That despite several reminders, these amounts remain unpaid to date. The Applicant filed skeleton arguments dated 1401 May 2018 which I have taken into consideration. At the hearing on 27th August 2018, there was no appearance from Counsel for the Respondents. I proceeded to determine the matter S as Counsel for the Respondents was present at the last sitting on 2nd August 2018, and was therefore aware of the hearing date. There was no explanation from Counsel for the Respondent for his non attendance. I have considered the Applicant's affidavit evidence, skeleton arguments and list of authorities. The Applicant's application is predicated on Order 30 Rule 14 High O Court Rules, Cap 27 of the Laws of Zambia and Order 88 Rules of the Supreme Court, 1999 Edition which makes provisions for the recovery of monies secured by a mortgage, the order for foreclosure, delivery of possession, redemption, reconveyance and power of sale of secured property. Therefore, this Court is clothed with jurisdiction to determine the application. J4 I P a g e The Respondent did not file any opposing affidavit challenging the claims and allegations made by the Applicant. From the facts and material on record, I find that the Applicant and 1 St Respondent executed a loan agreement wherein the Applicant agreed to advance amounts up to ZMW1,2 14,000.00 to the 1St Respondent. A Royalty Agreement was executed between the . Applicant and 1st Respondent, and the 2nd Respondent executed a Deed of Guarantee and Indemnity. The loan facility was secured by a legal mortgage over Plot 01/B/Block C/Ui/Ui Off Alick Nkhata Road, Mtendere Lusaka in favour of the Applicant. I find that monies remain unpaid and due to the Applicant. The Applicant further seeks an order to enforce the guarantee against the 2nd Respondent. In the security document namely the Deed of Guarantee and Indemnity dated 411 August 2016, the 2'' Respondent gave a guarantee to repay the loan facility extended to the 1st Respondent. The obligation of a guarantor is clear in that it becomes liable upon default by the principal debtor, and to pay on demand the guaranteed sum. J5 1 P E F. Accordingly, the Applicant has proved its claim and the net result is as follows: Judgment is entered in favour of the Applicant in the sum of ZMW1,790,099.70 and charges, and interest thereon at the short term deposit rate from date of the Originating Summons to date of Judgment and thereafter at the commercial lending rate until full payment. The 11 Respondent to settle this amount within ninety (90) days herein. In default, the Applicant shall be at liberty to foreclose I further Order that the 1st and 211d Respondent shall deliver vacant possession to the Applicant of the mortgaged property (cid:9) being (cid:9) Plot 01/B/Block C/O1/O1 off Alick Nkhata Road, Mtendere Lusaka. The Applicant shall be at liberty to exercise the power of sale of the mortgaged property without any further recourse to this Court. 2. The 1st Respondent is hereby ordered to pay the Applicant the Royalty Fee pursuant to the Royalty Agreement. 3. In the event that the monies released from the proceeds of the sale of the mortgaged property are not sufficient to expunge J6 I P a g e the debt, the Applicant shall be at liberty to execute on the 2nd Respondent as guarantor pursuant to the Deed of Guarantee and Indemnity. 4. (cid:9) Costs to the Applicant to be taxed in default of agreement. Delivered at Lusaka this 28th day of August 2018. HON. IRENE ZE S MBEWE HIGH COURT JUDGE 0 ii I P a g e