Chilanga Cement Plc v Carymac Company Limited and Anor (2024/HPC/0176) [2024] ZMHC 217 (30 August 2024)

IN THE HIGH COURT FOR ZAMBIA AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) BETWEEN: CHILANGA CEMENT PLC AND 2024/HPC/0176 HIGH COURT COMMJuo, ,~tfA'MBIA ERCIAL DIVISION INTIFF • CARYMAC COMPANY LIMITED 2 ( AUG ; "'n' ---\s YVONNE LUKWESA NWELE REGISTRY P. .o . aox s0061. tu~X~ D ENDANT Before the Honourable Lady Justice Chilombo Bridget Maka. For the Plaintiff: Mr. M. H. Mwaba - In House Counsel. For the Defendants: Mr. S. A. G Twumasi - Messrs. Kitwe Chambers. RULING Legislation Referred to: • 1. The High Court Rules, Chapter 27 of the Laws of Zambia. 2. The Companies Act No. 10 of 2017. 3. The Rules of the Supreme Court of England, 1999 Edition. Cases Referred to: 1. Anglo-Italian Bank vs. Wells (1878) 38 L. T. 197. 2. Queens Royal International & Kennedy Mambwe vs. Alpha Commodities Limited Appeal No. 25 of 2022. Rl 3. Finance Bank Zambia Pie vs. Lamasat International Limited CAZ Appeal No. 175 of 2017. 4. Daniel Peyala vs Zambia Consolidated Copper Mine SCZ Appeal 21 of 2012. 5. China Henan International Economic Technical Co-operation vs. Mwange Contractors Limited (2002) Z. R, 28. 6. Ellis vs. Allen ( 1914) CH, 904. 7 . Mayuni Estate Limited vs. MPH Chartered Accountants (sued as a Firm) (2013) 2 Z. R, 120. 8. Himani Alloys Limited vs. Tata Steel Limited (2011)15 sec 27. 9. Zega Limited vs. Zambezi Airlines Limited and Diamond General Insurance Limited SCZ Judgment Appeal No. 39 of 2014. 1. Introduction. 1.1. This ruling addresses the Plaintiffs application for the entry of Judgment on admission, filed under Order 21 Rule 6 of the High Court Rules in conjunction with Order 27 Rule 3 of the Rules of the Supreme Court of England, 1999 Edition (White Book). The Plaintiff submitted this application by way of summons, supported by an affidavit and skeleton arguments . 1.2. The Defendants opposed the application by filing an affidavit in opposition, along with skeleton arguments, on April 22 , 2024. 1. 3. The Plaintiff submitted an affidavit in reply to the Defendants' opposition on April 30, 2024 . • • R2 2. Background. 2.1. On March 11 , 2024, the Plaintiff issued a Writ of Summons accompanied by a statement of claim against the Defendants, seeking the following remedies:- i. An Order that the Defendant pays the Plaintiff the outstanding sum of USD195,455.00 and ZMWl 77,261.32 for the cement supplied and delivered to it by the Plaintiff to the 1st Defendant; ii. An Order that the 2 nd Defendant do(sic) deliver vacant possession of Stand No. 11720, Ndola; iii. An Order for foreclosure on stand No. 11720, Ndola; iv. An Order for sale of stand No. 11720, Ndola; v. Interest; vi. Any other relief the Court may deem fit; and vii. Costs . 2.2. This application was filed concurrently with the originating process. 2.3. The Defendants jointly entered appearance and filed a defence and counterclaim on April 4 , 2024, which they later amended with leave of Court. • • R3 3. The Plaintifrs Case. 3. 1. The primary evidence supporting this application is that th e Plaintiff and 1st Defendant entered into a sale and purchase agreement for cement. As a result of this supplier-customer relationship, the 1st Defendant accumulated a debt of USD 195,455.00 on the Dollar account and ZMWl 77 ,261.32 on the Kwacha account. 3.2. To secure repayment of the aforementioned debt, the 2 nd Defendant, in her capacity as both director and shareholder of the 1st Defendant, surrendered her certificate of title relating to Stand No. 11720, Ndola. A Memorandum of Deposit of Title, marked as Exhibit "MHM l ," was executed for this purpose. 3.3. It was averred that the 1st Defendant acknowledged its indebtedness to the Plaintiff in the amount of ZMW2,500,945.37 , which resulted in the execution of a debt settlement agreement. Under this agreement, the 1 st Defendant committed to repay the acknowledged debt in monthly instalments of USD8,000.00 , starting in August 2018. A copy of the debt settlement agreement was submitted as exhibit "MHM2". 3.4. That there is no dispute that the Defendants received a benefit from the Plaintiff that remains unpaid. 3.5. In its legal arguments , the Plaintiff quoted Order 21 Rule 6 of the High Court Rules and Order 27 Rule 3 of the White • • R4 Book, which su pport the en try of Judgments on admissions. 3.6. The Plaintiff cited th e case of Anglo-Italian Bank vs. Wells(1l to argue that a ju dgment in its favour can be granted when th ere is no defence or arguable point. Additionally, the Plaintiff referenced the case of Queens Royal International & Kennedy Mambwe vs . Alpha Commodities Limited(2l to support its approach of filing the application for judgment on admission concurrently with the originating process. 3.7. Submitting on the circumstances under wh ich J u dgm en t on admission can be entered, the Plaintiff cited the case of Finance Bank Zambia Pie vs. Lamasat International Limited'31 where it was held that such discretion can only be exercised when the admission, whether in pleadings or otherwise, is clear and unequivocal. 3.8. The Plaintiff argued that the 1st Defendant admitted its indebtedness in the debt settlement agreement dated July 10 , 2022. The exhibited agreement is however dated July 10, 2018. The Plaintiff contended that this admission is unequivocal., th us entitling the Plaintiff to a judgment on admission in its favou r. 4. The 1st and 2 nd Defendants' Case. 4.1. The essence of the Defendants' evidence in opposition was that they did not admit to owing any debt to the Plaintiff. RS • • • They asserted that they never had any business dealings with the Plaintiff, but rather with an entity named Lafarge Zambia Plc. The Defendants contended that the Plaintiff had not shown how it is entitled to the benefits and rights associated with the transactions between the Defendants and Lafarge Zambia Plc. 4.2. Additionally, the Defendants claimed that the debt settlement agreement had been reviewed and that the amounts being claimed by the Plaintiff were settled through direct payments, rebates , and acquittals. It was also asserted that the purpose for which the 2 nd Defendant deposited her certificate of title had been fulfilled. The Defendants presented several documents, marked as ''YLN1-YLN9 ," to demonstrate these repayments, rebates , and acquittals, and to show that it was actually Lafarge Zambia Plc that owed them. 4.3. In their legal arguments, the Defendants contended that, in accordance with the doctrine of privity of contract, the Plaintiff was not a party to the debt settlement agreement and therefore has no rights or obligations under it. They relied on the case Daniel Peyala vs Zambia Consolidated Copper Mine(4l to illustrate the meaning of privity of contract. 4 .4 . Additionally, it was submitted that the debt settlement agreement did not constitute an admission of debt. That both parties owed each other sums, but the 1st Defendant's R6 debt was settled through direct payments, rebates, and acquittals. 4 .5. It was fu rth er su bm itted th at th e Defen dants recognized the legal principle that Judgment on admission can only be entered in specific circumstances and appropriate cases, as established in the case of China Henan International Economic Technical Co-operation vs. Mwange Contractors Limitedl5 ). 4.6. Further reliance was p laced on the case of Ellis vs . Allen16 ) , Finance Bank Zambia Plc vs. Lamasat Internationa}l3 ) and Mayuni Estate Limited vs. MPH Chartered Accountants (sued as a Firm)l7 ) to underscore th at summary judgment on admission can only be granted when the admissions are plain , clear, and unequ ivocal. 4.7. The Defendants reiterated that th e debt settlement agreement relied u p on by the Plaintiff was not an admission of debt but rather indicated that both parties owed m oney to each other . Th ey fu rth er asserted th at the sums claimed by th e Plaintiff had already been settled . Additionally , th ey argued that th ere are issues that n eed to be tried and determined between th e parties, thus no admission of debt has been made. 4.8. The Defendants pr ayed that the application b e dismissed with costs. R7 • • 5. The Plaintifrs Affidavit in Reply. 5. 1. The evidence in reply indicated that the Plaintiffs name change from Lafarge Zambia Plc to Chilanga Cement did not create a new and distinct entity. That the Plaintiff, which retains perpetual succession, remains the same entity despite the name change. Copies of the certificate of name change were produced as exhibit "MHMl". 5.2. Additionally, the Plaintiff denied the Defendants' claim that the debt under the debt settlement agreement had been settled through acquittals, rebates, and cash payments. The Plaintiff also refuted the assertion that the acquittals were demonstrated in exhibit "YLN9". 6. Hearing. 6 . 1. At the hearing of the application on August 21, 2024, Counsel for both parties were present. 6.2. Representing the Plaintiff, Mr. Mwaba indicated that he was relying on the summons, affidavit, and skeleton arguments in support of the application, all dated March 11 , 2024. 6 .3. He added that the Court should consider Order 53 Rule 6 of the High Court Ru les and review the pleadings, which indicate that the Defendants did not dispute owing the Plaintiff but merely asserted that they were also owed by the Plain tiff. R8 • • 6. 4. According to Mr. M waba, the claims of the two parties were separate actions. He argued that since the Plaintiff's cause of action had been admitted in Exhibit "MHM2" of the affidavit in support, and since it had not been contested in accordance with Order 53 Rule 6 of the High Court Rules, judgment on admission should be entered in the Plaintiff's favour. 6.5. He stated that the issue of whether the Plaintiff is indebted to the Defendants, as counterclaimed, is a separate matter that must be determined after trial. 6.6. On behalf of the Defendants, Mr. Twumasi relied on the affidavit in opposition and the accompanying skeleton arguments dated April 22, 2024. 6.7 . He submitted that the Defendants have explicitly disputed owing the amounts claimed, and there was no acknowledgment of debt as alleged, given that the settlement agreement outlined specific provisions for debt repayment. Mr. Twumasi added that the affidavit in opposition shows that the alleged debt has been settled since 2018, and that no such debt existed at the time this action was commenced. He drew the Court's attention to exhibits "YLN4" to "YLN6'' in the affidavit in opposition to support this submission. 6 .8 . He further submitted that the law is clear that judgment on admission can only be entered in appropriate R9 • • circumstances, specifically where the admission is clear which was not the case herein. 6.9 . Mr. Twumasi pointed out that the Plaintiff's claim is unclear due to the inconsistent amounts specified in the demand letter and those endorsed on the Writ. He noted that there was no explanation provided for how these amounts arose . 6.10. Additionally, he submitted that while the counterclaim is separate from the Plaintiff's claims, it still arises from the debt settlement agreement that is the subject of this action. Therefore, that this was not an appropriate case for entering judgment on admission. He requested that the application be dismissed with costs. 6.11. In reply, Mr. Mwaba explained that the two demand letters reflected different amounts because the Defendants held two accounts; the Dollar and Kwacha accounts. He urged the Court to take judicial notice of the exchange rate that prevailed in 2018. He further clarified that the sum of the two amounts was what was admitted in the settlement agreement. 6.12. Mr. Mwaba further submitted that a . review of the documents exhibited by the Defendants shows that there is still an outstanding debt. He argued that no evidence has been provided to prove that the debt was settled. He reiterated that the Defendants' defence did not dispute their debt to the Plaintiff but merely asserted that the RlO • • Plaintiff also owes them, suggesting that the two debts should offset each other. He contended that this issue must be proven at trial, while the Plaintiffs claim has been admitted unequivocally. 6.13. He maintained that this is an appropriate case for the entry of a Judgment on admission. 7. Consideration and Determination. 7.1. I have reviewed all the affidavit evidence, skeleton arguments, and oral submissions from both parties, and I have also considered the pleadings. 7 .2. The Plaintiff's application to enter Judgment on admission is anchored on Order 21 Rule 6 of the High Court Rules, which states as follows:- "A party may apply, on motion or summons, for judgment on admissions where admissions of facts or part of a case are made by a party to the cause or matter either by his pleadings or otherwise." 7.3. The prov1s1on outlined above grant this Court the discretionary power to enter Judgment on admission. The exercise of this discretion depends on whether the Court is satisfied that there has been an admission of facts , either through pleadings or otherwise. Additionally, the admission must be unequivocal. This principle was clarified by the Supreme Court in Himani Alloys Limited Rll • • vs. Tata Steel Limited(8 ) where the subject was addressed in the fallowing manner: - "Where admissions of facts have been made in the pleadings or otherwise, whether oral or in writing, the Court may, at any stage of the suit either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may see fit, having regard to such admission." 7 .4 . A Court is therefore required to thoroughly exarmne the admission on which a judgment on admission is to be based before entering such a judgment. This position is supported by the decision in the case of Zega Limited vs. Zambezi Airlines Limited and Diamond General Insurance Limitedl9 ) where it was held that:- "The Court, on the examination of facts and circumstances has to exercise its judicial discretion, keeping in mind that a Judgment on admission is a Judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion of the court should not be exercised to deny the valuable right of the defendant to contest the claim. In short, the discretion should be used only where there is clear admission which can be acted upon." R12 • • 7 .5 . The evidence the Plaintiff relies on to persuade this Court to enter Judgment on admission is the debt settlement agreement submitted as Exhibit "MHM2," dated July 10, 2018. The Plaintiffs position is that the 1st Defendant acknowledged its indebtedness to the Plaintiff in the amount of ZMW2,500,945.37 and agreed to repay it in instalments. 7.6. The Defendants denied admitting to the debt as claimed by the Plaintiff. They asserted that they had no business dealings with the Plaintiff and that their agreements were with an entity known as Lafarge Zambia Plc. Based on the doctrine of privity of contract, the Defendants argued that the Plaintiff does not have any rights or obligations arising from those agreements. 7. 7. The Defendants' arguments regarding privity of contract cannot be upheld. This is because the Plaintiff has shown, through exhibit "MHMl" in the affidavit in reply, that it simply changed its name from Lafarge Zambia Plc to Chilanga Cement Plc. It is well-established in law that a company can change its name without affecting its rights and obligations. This position is supported by section 42(7) of the Companies Act No. 10 of 2017 which enacts that:- "A change of name by a company shall not affect any rights or obligations of the company nor render defective any legal proceedings that could have been continued or commenced R13 • • against it by its former name, and any such legal proceedings may be continued or commenced against it by its new name." 7 .8. The Defendants also argued that the debt settlement agreement, if deemed applicable, only outlined the method for settling the mutual debts between the parties. They claimed that the debt mentioned in the agreement had, in fact, been settled through direct payments, rebates, and acquittals. Several documents were submitted to support this assertion . 7.9. I have reviewed the debt settlement agreement upon which the Plaintiff relies for this application, and which both parties have produced in their respective affidavits. Clauses 2 and 3 of the agreement state as follows:- "The parties acknowledge that the debt owed by the Customer (the 1st Defendant) prior to execution of this Agreement was ZMW3,168,690.64 which has since been reduced to ZMW2,500,945.37 through several monthly repayments . The Customer has agreed to settle the outstanding sum of ZMW2,500,945.37 by making payment to the Supplier under the following terms and conditions" 7.10. The provisions outlined in the settlement agreement indicate that the 1s t Defendant acknowledged owing the Plaintiff a debt of ZMW2 ,500,945.37 at the time the agreement was executed. The 1st Defendant agreed to R14 • • settle this amount according to the terms specified in the agreement. 7 . 11. At first glance, the settlement agreement seems to demonstrate the 1st Defendant's indebtedness to th e Plaintiff. However, since the agreement was executed in 2018 , the Defendants have claimed that this debt has since been settled, and that it is actually the Plaintiff who now owes them, which is the basis for their counterclaim. 7.12. Given that the debt alleged to be owed in the settlement agreement has been disputed and challenged, even in the pleadings, this Court cannot find that there is an unequivocal admission. The settlement agreement itself is actually one of the triable issues that must be resolved. 7 . 13. At this stage, I will not delve into the evidence regarding whether the debt was settled or not. This Court is currently limited to determining whether the Defendant admitted the debt in the pleadings or through other means. 7. 14. Consequently, I am not satisfied that this is an appropriate case to exercise the discretion to order the entry of judgment on admission. 7.15. At the hearing of this application, Counsel for the Plaintiff urged the Court to also consider Order 53 Rule 6 of the High Court (Amendment) Rules, which, in summary, provides for the entry of Judgment on admission where the R15 • • facts in the statement of claim are not specifically traversed. 7.16. As previously noted, the pleadings challenge the existence of the debt, asserting that it was settled through direct payments, r ebates, and acquittals. It therefore falls short of the threshold of an admission as required by law. 8. Conclusion. 8. 1. On account of the fore going, I find that this is not an appropriate case in which to exercise the discretion to enter Judgment on admission. 8 .2. Consequently, the Plaintiff's application for the entry of Judgment on admission is dismissed for want of m erit. 8 . 3 . Trial of the main action shall proceed on 27th November , 2023 at 09:00 hours . 8 . 4. Costs shall be in the cause. 8 .5 . Leave to appeal is granted. Delivered at Lusaka this 30th day of August, 2024 . . .............. ~ .: ........ . Chilombo Bridget Maka HIGH COURT JUDGE R16 • •