Christopher Chilongo (Suing as Secretary General of City of Lusaka Football Club 1970) v Cavmont FMO Corporation Limited and Anor (2018/HP/848) [2024] ZMHC 263 (9 December 2024)

.. IN THE HIGH COURT FOR ZAMBIA 2018/HP/848 AT THE PRINCIPAL REGISTRY HOLDEN AT LUSAKA (C 'iu il . Jurisd ict io 11) BETWEEN: CHRISTOPHER CHILONGO (Suing as Secretary General of City J,'c,otball Clvb 7 t..) 70) AND PRINCIPAL o 9 0£C 2024 PLAINTIFF CAV MONT FMO CORPORATION LIMITED FORLI LIMITED 1 ST DEFENDANT 2ND DEFENDANT Before the Honourable Lady Justice S. Chocho, on 9 th Dccember,2024. Fo •- the J>ic1int iJT l\lls. C. Puto of l\llessers Robs on l\llolipenga and Company Fur the D cferu}w Lis: M s . 13. Nachimba of Mess ers J &M l \ duocates - -·-- - - - - JUDGMENT ·-- -- ·- - - - -·-- - - -- - Cases re_{§rred to: 1. Z ambia High Light Mining Investments Limited V Register and Chief Executive Officer Patents and Companies Regulations Agency (2021) ZMHC 50 2. Dunlop Pneumatic Tyres Company Limited V Selfridge and Company Limited 1912 AC 3. Rat'ing Va luation Consortium and D. W. Zyambo and Associates (suiny as a firm) V The Lusaka City Council Zambia National Tender Bo a r d (2 004) ZR 183 4. Friday Mwamba V Sylvester Nthenge and Others (2010) SCZ .l 0 J2 5 . K unda v . Ko n k o la Cop per mines P lc Appea l No . 48 of 2005 6. Ma rshlands Consortium Limited and Others v Felicitus Kabwe Chibamba Appeal No 154 of 2021 7. Gemis tar Enterprises Limited v Afgri Corporation Limited {2017] ZMSC 159 8. Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd (194 3 ) AC 32 Legislation and other authorities referred to: 1. The Companie s Act, Act No . of 10 of 201 7 2. The Companies Act, 1 994 3 . The High Court, Chapter 27 of the Laws of Zambia. 4. Phipson on E v idence, 17th Edition (London; Thomson Reuter 2010 5. Murp h y on Evidence 5 th Edit ion (2002) Unive rsal Publishing Company, New Delhi. 1 . INT RODUCTION 1.1. This ,Jucigmcnt 1s 111 respect. or Lhc Pl;:-1int.iff's cla im comme n ced by Writ of Summons nnd accomp~rnying SLD!emcnt. of Cla im daLed 2 nd M<1y, 201 8 \,vhich was amended by a consolidaLcd WriL and amended Statement of Cla im d ated 2 0 L11 S ept.e mbe r , 202 0 for th e fo ll owin g c la i ms a gains t the Dcfendan ls; i) /\11 Order Lo chc:rngc the clirec torship or the C i Ly of Lusaka l◄ oolball Club (2000) Pie and refleeL new LrusLces. ii) /\n Order Lo nu ll ify Lhc changes made lo Lh c sharehold in g of the City of Lusaka l•ootball Club (2000) Pie, rrom its in cept.io n. iii) An 01-c.kr that Lhc Plaintiff never owed USD 562,000.00 lo t.hc 1s t l)cfenda nl al t he Lime the de b l was sold lo Lhe 2 nd Defendant.. J3 iv) /\n Order Lhat Lhc debL assign rnenl of USI) 562,000 .00 by Cavmonl F'MO Corporation LimiLed lo l<'orli Lhc 2 nd Defendant here in was i I lcga I. v) An Order Lo nullify I.he sale of Cavmonl F'MO Corpora tion Limited shan:holding in I.he City or l,usaka l ◄ ooLball C lub (2000) Pie Lo a third- party F'orli Limited. vi) /\n Order t.o nul lify Lhc illegal o r unlawful convention of a ll preference shares by Cavmonl l◄'MO Corporal.ion Limited in the Ci ty or l,usaka l ◄'oo Lball Club (2000) Pi e to ordinary sha res . vii) /\ 11 Order Lo null ify illegal or unlaw ful changes of registered sccrcLarics of C ity of Lusaka F'ooLba ll C lub (2000) Pi e, Me sscrs Chifumu Banda and /\ssoc iaLcs . i) /\n Order of clcclc.1 1·a Lion Llla t. Lhc Defendant. havin g forged Lhc lease agree men l, the lease agree men L be declared null and void. ii) /\n Orde r of paymcn l of Lhc sum or ZMW 500,000.00 bein g 5% 1·cnlals anci ll i1·i11g Lhc s ladiurn. ii i) /\n Order of payrncnL or 5'¾, 1-c11tals anc.l hiring o r sLadium from dat.c of Wril Lo dale of ,Judgcmcnl. iv) An Order of payment of the sum of Z MW l 0,000,000 .0 0 demolish ed clu b house . v) /\n Order for canc:clation of lea s e agreem e nt.. v i) /\n Order Lo demol ish illega lly built st.ruclu res less whal is owecl LO Lhc Plain tiffs vii) /\n Order restra ining Lhc Defendant from interfering wilh the running or the football club by Lhc Pl a inLiff and a llowing them use \\'l)Odlands st.c1d iurn and handover Lhc fool.ball learn . viii) 1\n Order 1.hal Lhc cily or Lus,.1kc1 Fool.ball Club arc equita b le owners of bo lh sland No . :3034 Lo Lhc c ily of Lusa ka footba ll club1 970 ;:1s be nefici al ow n er. J4 ix) /\n Order fo r Lransfc r of Lhc cc rLifica Lc of Lille bein g Sland No. 2757 an d stan d 3034 and oLhcr imporlanl c lub docurnen ls. x) xi) l)a m, tgcs. In tc rcs l. xii) /\ny olher rclids as Lhe Courl m ay dee m fil. 1. 2 . In response a nd ddcncc Lo Lhc Pla inliffs ' cla ims, Lhc Defendants filed a l)cf"cn cc a1HI Cou!llcr c laim on I.he 25th October, 20 18 in whic h Lhcy denied t.hat t.hc Ph--iinliffs claims i:111d counter claimed Lhc follow in g; i) ii) Damages . /\n inju nclion Lo rcslrain Lhc Plainliff by h im self an d all Lhc rn cmbci-s of th e c it.y of Lusaka footba ll c lub (1970), t heir servants, agents o r ol hcrwisc frurn clllcl l o prcvcn L Lhcm from : a) Co rnmilling a rcpcliLion t.hcreof, inducing o r procuring breaches o r unl awfu lly interferin g in conlraels between Lhc second d efendant. and ciLy of Lusaka foolball club (2000) Pie; and t ile: leases between I.he 2 nd l) cfcndanl and ils lenants on Su.rnd No. 303,--1, Lusctka; the d cvclo p1ncnl of Lewanika Mal l on S La nd No . 2757, Lusaka; b) lnlcrfcring in the a ffa irs of C ity of Lusaka F'ootball Club. iii) Int.crest on l.hc amounL th aL will be found clu e an d paya ble to the 11 d l)cfcnclunL ) iv) Cos Ls occasioned by I.his c1cLion. 2 . EVIDENCE/TESTIMONY ), _I . In a id of Lhcir case i he Pl a i1ll ifT called one Wit n ess and WiLness statemenL filt'd on 3 0 t h ,J une , 2023. 2 .2 . PW 1 Chrislophcr C hilon go Lcslificd Lhal Lhc I st Dcfc ndan l w1LhouL a valid meelin° valid resoluLi o n and consent. of Lhe Plaintiff increased Lhe b> company's share ca pilal. JS 2 .3 . PWl Lcslificd Lhal Lhc :s1 Dcfcndanl conn ived wilh one truslee and crcc.ned preference shares ·which were subscquenlly convcrled inlo o rdin a ry shares , . .111d lhe I si Dcfcndanl al lolled ilsclf. 2.4. PW I leslified lh a l lhc 1s t Dcfcndanl a lso illega lly increased lhe share cap ilal o r Lhc company wilhoul a valid resolution through its lruslee. 2 5 . })WI Lc sLificcl thm the 2 11<1 Dcfcnclant did not carry oul due d iligence and p roceede d lo buy Illegal sha1-cs l'rolll t.hc I si l)cknda n l. 2 .6 . PW 1 tcslil'icd under cross exa min a tion the h e was a ppoinled Seerc lary General of thc Pl a intiff Company in 20 I a l lhe ushering of th e new executive aflcr 2017 election. 2.7. PW ! lestified under cross exam ination Lhal p r ior t.o hi s appoinlme n l, Uw Scc rela 1·y General vvas one Charles Tcmbo . 2 .8 . }JW I te stified th a l as Sccret:1ry General, he was provided with Lhe d oc urnc n u..1t io 11 rc l;.1Ling Lo Lhc records of' Lhe !)laintiff. l lowcvcr, PW l tes t ified th a t he was nol aware Lhc1t Lhe l)laintiff had been dcregislercd as he did was nol availed with documcnlalion Lo Lhal effect if any . 2.9 . PW 1 tcslifi ed under cross exam in a tion Lhal ,,vhal was deregisLCred 1s a club ca ll ed C1Lv or Lusaka Foolball club a nd that when the Plaintiff Co m pany ,-vas formed, il was an unincorporated cnliLy c.rnd was o n ly registered in 20 18 . 2. 10. PW1 furlher gave conlradicling Lcslimony under c ross examination the Plain t ilT Company was in existence and incorporated as of Lhe year 2000 . 2. 11. PW I tcsl if"icd under cross exarninaLion Lhal he was awa re o r Lhc Shardrnlding sLrucLu1-c or City or Lusaka l•' ooLball Club 2000 PLC in 2000 and !i sled t.hcrn as follows; • Mr. Henry Sichernbc • Lale ,Judge Le·waniki-l • Lale ,Jud ge L◄:sau Nebwe • 1,a Le M ,tsiyc Masiyc • Mr. J3 ri lli a nl Mu c hima • Mr. Yuy i Lishomwa • La le Ch ris line M ul u n d ika • Slate Counsel Chifu m u 13an d a 2. 12 . PW l Leslified furlh e r under c ross ex a min atio n Lha l h e wa s n ever a s h a re ho lde r o f Ci Ly of Lusa ka Foolball Club 2 000 PLC 2 . 13. l.)W l Lcslificcl under cross cxa rni n;-tl io n Lh al th e re was a m o r tgage wh ich \\'us p,1icl f"or hv Cavrnont 13ank Limi ted . 2 . J 4 . PW l Lcsli fi ed un d e r c ro ss cx a m inaLio n LhaL C i Ly l) f Lusaka fi'oolball C lub 1970 was racing fi n ancial ch;-1llcngcs and Mr . I lc: 11 1-y S ic h c mbc in h is capc.1eit.y as in terim Chairpe rso n approa ched Cav m o nl Bank Lim iled seeking financial assislance. 2. 15 . PW l conceded un d er c ross e xa min ation Lhal a du ly con ve n ed mee l ing con s is ts of 50%, of Lh e d uly paid - up m embe rs and Lh al h e did n ol know vvho the fu lly paid - up members we re al Lh al Lim e . 2 . J 6. PW 1 LcsLifiecJ under cross exa m ination tha t he vvas awa re of Lh c exi ste n ce of a proposed subscri p l ion agree m e n t between C ily of l~w,a ka Footba ll Club PLC and Lhe 1st l)cfencl::.rnl buL wc1s not aware of any execulion Lhercor. 2 . 17. PW 1 was rcfu rcd Lo pages 7 I a nd 77 o f the De fcndan ls bundl e of documents a n d h e a greed Lh a l Lhc su bsc riplion agrecme nl refe rred Lo in 2 . 16 al. Jove was i1 1 fac t cxc:c u t.cd . 2. 18 . PW 1 t.cs l ifi cd under cross cxam ina l io n th at Lhc Lrus lee Lhal was be ing refe r red to as to have con n ived wi t h th e 1st Defen d a nt was o n e He n ry S ichcmbc a n d Lh e bas is of t h is suspic ion is Lh al Henry Sic h e mbe is th e only one docurnc11 Led Lo have dealt wilh the 1st Ddcndanl. J7 2 . 19. PW 1 conceded under cross examinaLion Lhat. he was previ ew Lo mi nu Les which suggeslcd Lhal olher members of Lhe Plaintiff Comp any in fact. dcalL wilh Lhc I s 1 l)cfc nd an !. ;.20. i>WJ !vstii'i~:d t111tk 1 cross cx.-11ni11,11iu11 Lilal Lhc evide n ce he has Lo csLc:1bli sh LhaL indeed Lh c PlainLiff Companv ovv n s Lhc properly 111 question is conlained in Lhe Js1 Dcfendanls witness slalemenl. 2 .2 1. In rcexamina l ion, l. JW I LcsLificd Lhal Lhere were Lwo more shareholders in ~H lcliLion lo the o nes listed in 2. '. 1 above namely; • Lale ,John Cruickshank • Thomas l◄'rans i s Ryan 2 .22. The DdendanLs called one witness and file d a w itness slatemenl on 14 th ,July, . JU.2.3 . 2.23. DW 1 Th ,rn1 a s l ◄'ran c is l<ya n LesLified thal Lhc I si Ddcndant ,,vas somel1mc in 1999 a p proac hed by Lhc l~xeculivc com mi t Lee CJf th e City or Lusa k a fooLba ll c lu b und er Chairmanship of Mr. l-l en ry Sichembe con cerning Lhe possibi lity of Lhc l "1 ])cfcncfonl fund ing or invcsLing in Lhe c lub. DWl referred Lhc Court Lo a lcllcr contained on pages 24--25 oft.he Defenda nts Bundle of documents. 2.24 . DW 1 LcsLi fied Lhal in the course o f Lhe discussions bet.ween t h e 1 sL Ddenclclnl and the o ffi c ia ls from Lhc club under I.he Chairma nship of Mr. I lc11ry Sic h cmbe, Lhe parties agreed to incorporate c:1 n ew public lirnilccl com pany t.u be known as C it y of Lusaka l◄ oo tba ll club Limiled '2000 Pie (LI H' club) . 2 .25 . DW 1 test ified that iL was a lso agreed thc:1L Lh e l st Dcfcndanls would provide funds Lo clear the c lub's exposure lo Lhe Bank and Lhal t.he [ sL Ddendanl wo uld invesl 1(500,000 ,000.00 (unrebasecl) in t he club. DWl referred Lh e Court Lo Lhe reso lution pa ssed on I 1111 /\ p ,-il , 2000 o n page 32 o f Lhc Defend a nts bundle of docurncnls. JS 2.26 . l) W I tes tified Lh at Lhc Is, f)cfcndanl entered into a subscrip tion ag1·ecrncnl w it h the club under whic h il was agreed thal Lhe Defendant would m ake a cash subsc ript.io n of K5 ,000,000.00 c on s is ling of K300,000,000 .00 in ordinary shares co nsistin g o f 3,000,000 shares I< I 00 each and 1<200,000,000.00 cons isting of 2 00 redeemable prclcrcnce sha res of l< 1,000,000.00 each c.1t par redeemc.1blc at Lhe option or th e club. 1)\,\/ I referred the Court LO pc.1ges 70 lo 88 of Lhe Defendan ts bundle of docurncnt.s. 2.27. l)Wl st1bmit tcci th ,1l. it wc.1s on t he st re n gt h of the subsc ri ptio n ugreemcn t Lhe /\rticlc 25 of th e articles of c.1ssociation was amended . 2 .28. DW l sub millc-d Lhat. the 2 11 <1 l)cfcndanl e ntered inlo a lease agreement wilh lhc club Lhal t he 2 11 d Dcfcndanl would rent St.and 3034, Lusaka for a period of 25 years rcncvvable fo r purposes or carrying out. developm ent vvhieh would includ e rcfurbishmcn t of the stad ium. O W 1 referred the Court to rages 33 11 Lo 354 of th e Defe ndants bundle of docume nls. 2.29. DW l testifi ed Lhal il was on Lhc strength of Lhc: lease agreement. Lhat U1~· 2 11c1 Dcfcnci rn1 t carricci out. refurbishment or Lh e sta dium a n d erected a toUll ur 117 sho ps for rent . 2 .30. DW l Lc!:>L il'ied Lhat Lhc l)l a int.ill wrongl'u lly and wilh inlcnL t.o injure lhc 2 nd Defendant allemplcd Lo procure and in d u ce t.he p arties lo these agreements t.o b reak Lhe agr eemen ts wilh Lhe 2 nd Dcfcndanl. 2 .31. IJWl tcslificd under cross exarr1 1nHtion thal t.h al Lhe 1s1 Defendants consideratio n fo r Lhe sha res in C ity of Lu sa ka 2000 PLC w a s cash in Lhe sum off K500,000,000 .00 (un rcbascd). 2.32. UW I furLlicr t.cst.ificd u11clcr c ross examinmion Lhal Lh c co n s id e ra tion l\'krrcd to in ~ 31 above was c-1 11 i1 1vcs1n1c n t. in the company and Lha l it wi-1S ro,· co11ti11uccl rch abililc1tio11 ur Lile grn u1 1ds c111d club hou~c . J9 2 .33. ])W l tcsLifi c d Ll1,1l the cons idcrnlion rdcrrcd Lon in 2 .3 1 above was paid 10 C1L_v or l,usuka l•'ooLlJc.ill Club '2000 l)LC buL docs nol have evidence before Lhc Cou rl. 2 .34. DWl furth er testified Lhal h e was ce rtain Lhat Lhcrc is in existence an acknowicdgcmcnt of receipt of Lh e c onsideration only that it is not before Cuun. 2.35. OWl tes tifi ed th a t the subsequent K 150,000,000.00 was a lso paid m cash but. th ere arc no rece ipts before this Court. '2 3(). DW1 tc'slifi c-d under noss examination that the share h o ld ers of Lhe club n)11vc11cd Lo pass a 1-csoluLion and docs nol reecill any evidence of the meeting. 2.37. DW1 Lesuficd under re-exarni 11at ion Lhat the J st Defendant. is a special vehicle in which investments were made and il was origin a lly managed l>y Cav rnom Merchant f3c.1nk. 3 . LAW AND SUBMISSIONS. 3. 1. 13olh l'arlies filed their wriLlen subm issions. The Plain Liff filed on the 5 t.h l·'t·brw1ry, '.),024 and t.hc Defendants o n th e 4 t h of /\pril, 2024. 3.2. The Pl a intiff subm its Lhal befo re iss uin g shares, a co mpa n y musl e nsure to issue Lhcrn in accordnncc wilh ils /\rLiclcs or Assoc iation. 3.3 . The Plain Li fl submits Lha1. issuing of shares \,\·ill require r1 re solution Lo be passed by a Cenernl MceLing of the cornp,1ny sha re ho lde rs . 3.4. The Pl a intiff relied on Section 140(1) of the Companies Act which provides t h a L; "A company may, unless its articles provide otherwise, by special resolution, alter its share capital as s tated in the certificate of share capital by- JlO (a)increasing its share capital by issuing new shares of suc h an amount as it considers expedient". 3 .5. The J>lainliff relied on Lhe case o f ZAMBIA HIGH LIGHT MINING INVESTMENTS LIMITED V REGISTER AND CHIEF EXECUTIVE OFFICER PATENTS AND COMPANIES REGULATIONS AGENCY (2021) ZMHC 50 1 and submilt.ed Lhal Lhe arlic les of a company rcgulalc ils internal affnirs and thnt. Lhrn. Lile art.icles amount lo a b ind ing conlracl bclwccn Lhc company and iLs members . IL was fu rlhcr su bmitted Lhal Lhc Companies /\cl has c:1 recommendation fo r m of articles termed as the st.andard articles wh ich compan ies arc al liberly Lo sly lc otherwise and thal t.hc stand a rd arLiclcs allow for allcrnlion of share capit.al by way of ordinary rcso lut.ion. 3.6 . The Plaintiff submiLLed Lhal accordi n g Lo Lhc first sc h edu le of Section i :2(3) slandard /\ 1ticlcs, a resolution means an ordinary resolution of the Company . 3.7. The Ph-1i1 1u rr ::;ubmiLs Ll1al t.hc Is: l)dcndam illegally incrcc:1scd Lhc share capiw! und subsequcnt.ly alloLLed it.sel f wilhou t. investing the K5 00,000,000.00 into the clu b a s agreed. 3.8 . The Plc1intiff subm its Lhm t.hc 1 "1 l)dendc1nl a lso ill egally c h c1ngccl the Compc:1ny Secrclar_v and proceeded LO convert. preference s h ares in to ordinary shc.11-cs. 3.9. Funhcrmore, the Plain Liff su bmits Lhat the 1st Ddcndant claimed an amount o f US$562,000 from the city of Lusaka (2000) despite the morncs never being ndv,incccl Lo t.lic c lub and subscqucn lly assigned Lhc dcbL lo chc L11 d l)cl'c11cl,int. wit.bout ,111y -;pc(·i,1I IT!:>\)lut.ion . 3 .10. In response , t.hc Defe ndants sub mit t.haL Lhc Plaintiff lacks locus slanc.li m t hi s maLLcr as City of Lusc1 k a l•' oo lbc1ll Clu b (1970 ) on whose behalf Lhc !)lainliff brings this action was non -cxist.cnt and n ot privy to what Jll transpired ,1L tile tim e.: Lhc chc1:1~c·:-i i11 sharcholcli11g were being m a de in Ci Ly or Lusaka l<'oolball C lub (2000) Pie . 3.1 I . Th e Ddcndan ls rurl h e r s ubmil lhal the Plaintiff was nol privy lo the subscri plion agree mcn l and eannol make allegalions regarding lhc sha reholding c han ges made and placed reli a n ce on Lhc case of DUNLOP PNEUMATIC TYRES COMPANY LIMITED V SELFRIDGE AND COMPANY LIMITED 1912 AC 2 Lo suppor l Lhcir argumenl. 3.12. Th e Dcfe ndanls subm itled LhaL Lhe subsc ripti on agreemenl was d u ly executed by Lh e parlies (CiLy l)f l,usaka FooLball Clu b 2000 Pie, The CcJ\'C rwntors and the l "1 l)dcndnnt.) the reto a nd any c hanges made 1.o lhe sharehold in g a11cl gove rn ance s lrucl ure were rightly clone a nd placed rel iance on Lh e case of' RATING VALUATION CONSORTIUM AND D. W. ZYAMBO AND ASSOCIATES (SUING AS A FIRM) V THE LUSAKA CITY COUNCIL ZAMBIA NATIONAL TENDER BOARD (2004) ZR 1833 111 which iL was he ld as follows; "What is regarded as an important criterion is for the Court to discern a clear intention of the parties t o create a legally binding agreeme nt between themselves. This can be discerned by looking at the correspondence and the contract of the parties as a whole". 3 .13 . Th e Dcfendanls s ubmil Lhat lh e DW1 's leslim ony provid e s lhc faelual backgro und know n lo t.hc parlics a s well as whc1l objective of the trnnsaclion was a nd that DW 1 provided all d e lails a nd relevant ciocumcntat.io n rclc1Li11 g Lo h ow Lhc ch,111g(·s v,crc made . 3 . 14. The Dcfcndanls p laced re li a nce on Lhe case of FRIDAY MWAMBA V SYLVESTER NTHENGE AND OTHERS (2010) SCZ 8 4 i n which iL wa s slc.llcd as follows; 'In constructing any written agreement, the Cott.rt is entitled to look at the evidence of the objective factual background known J12 to the parties at o r before the date of the contract, including evidence of the "genesis " and objectively "aim" of the transaction". J . I~- Tl,t· l)dv1H .. L1 11ts sulrn1iuvcl l hdl Llw Pl <-1i 11tifT ha::-. a duly Lo prove iLs ca se a nd Lhc Pl a in t iff hus rail ed Lo prove i Ls case and relied on Lhc case of KHALID MOHAMED V THE ATTORNEY GENERAL (1982) ZR 49 5 where iL was held Lhat a Plain Liff musL prove his case a nd if he fai is Lo do so Lhe mere failure of Lhe opponenL's de fence docs not c ntillc him to judgenwnt.. 3 . 16 . T he Ocfe n danLs submiL LhaL Lhc Plaintiff 1s no L enLiLlcd Lo any of the re li efs sought. 4. COURT'S ANALYSIS AND DECISION 4.1. I have C(JJ1sidcrccl Llw cv id C'11cc on t-ccurcl ;-111cl th e Parti es rcspec Live submissions . The Plain Liffs have before Lhis Court a cockLail or claims. H oweve r , h avi ng co n sidered Lhc a r gurncnLs a d vanced by the pa r ties, Lh e real quest.ion for dcLcnninaLion is whcLhcr Lherc was ill egality in the a lt.cra t. ion or s hat·cs a 11d c ha1 1gc or s h a1·eholdi ng and go vcnrnn c -~ sLrucLurcs in Lhc Com pany known as Ci Ly of Lusakc1 F'ooLball C l ub (2 000) PLC by Lhe DcfcndanLs. The answer Lo thi s question wil l have a beari ng on Lhc oLhcr issues r a ised. 4 .2. The Ddcncla t11s subm it thaL Lhc Plaintiff lacks locus s ta ncli LO brin g t he ,urporls Lo brin g aellon 1r' I inn n i l I Ill• 01·r " 11, ri I h ..- 11'~ · 1 ; Lions in issue . I L is t he ,a ll club (1970) was nol sLcrcd in 20 18) . I h ave : evidence o r boLh Lhc on bchc:1lf was noL in ex i s tence during the t.rnns8 DcfendanLs posi t ion LhaL Lhe C i Ly of Lusaka foot in ex ist ence in 2000 (havi 11 g being officially reg c onsidered this submissi o n and I i"i11d thLl l Lh Plai n tiff and Defendants po i nts Lo the: rollm,ving : Jl3 i) Pages 32-68 of Lhe Defcndanls bund les of doc u menls co n Lain various documents and corresponden ce be t.ween Lhc Plain Liff (Ci ty of Lusal«:1 F'oolball Club 1970) an d Lhc 1st Ddene.font. Th e same ch ronicles t.he genesis of discussions a n d agreements between Lhe l.\MO parties resulting in to incorpo ration of Lh e Cily of Lusaka F'oolball c lu b 2000 Plc. ii) The in co 1-po r a li on documen ts show trustees of the Plaintiff (i11clt1cling its C~cneral Secretary) as Shureholdcrs and Directors of Ci t_v of l~usak,1 l•ootball Clti!J 2000 l)Jc. This also included lwo rep rcse n lalives of Lhc first. Dcfenclanl. ii i) The nam es o f the first. Di recto rs of City of Lusaka Foot.ball club 2000 Pie were; ,John M;1itland Crt1ickshank Thomas l•'ra 11cis l~yan Henry Sichembc ,Justi ce David Mbelele Lewanika Yuvi Lisho rrn~ a With till· Co1np;i11v Sccn·1nr_v n·conlt-d as Cliifurnu l(.l1andc.1 S. C. 4 .3 . In light. o f the find ing above, il is m y considered 1)pinio n Lh c Plain Liff docs in fact have Lhc locu s slandi in Lhis malt.er. The Plairitiff is su ing in his capuc it.y as Secretary Ckncral, Lh c same posit.ion that was p reviously held b_v one l lcnn· Sichernbc wiLl1 whom tJ1c l sl Dcfc11dc1nt had dealings wilh. 4.4. l now direct my mind Lo Lhc one quesuon thal 1 deem cardinal in clcll:rrnining the c·lc.i ims ;me! cou nLn -claims in th is action. Thal question is v\·hcthcr or not. the resolution or C11_\' or Lusaka FooLl:.iull Club 2000 Pi e , dated 4th August. 200() (which rn ,,dc rdcrcnce to the Subscription /\grecmcn L) . J14 i) S ub sc ri pLion Ag reemenL dalcd 31 sl ,July, 2000 as appears on page 7U 7 / or t.hc l)ck11d ,tnl~ ht1ncllc signed by Thomas l~yan and ,JusLi cc Davie! Mbcklc l,C'\,vanika . 4 .5. l wi ll di ree l m y mind lo the 1994 repealed Companies Act as it was the a pplicab le law at the Lime of Lhe occurre n ces of the issues ra ised by the panics 8vc11 though Lh c clauses relevant. Lo Lhi s mallcr, read Lhe same. 4.6 . Section 74(a) of the repealed Companies Act provides as follows; "A company may, unless its articles provide otherwise, by special resolution alter its share capital as stated in the certificate of share capital by doing any of the following: increasing its share capital by new shares of such an amount as it thinks expedient". 4. 7 . Section 74(a) of the repealed Companies Act mirrors Section 140(1) of the Companies Act, 2017 cit.eel in 3 .4 above ancl I am o f lhe consicJcrccJ opi 11ion Lhal the provision means LhJL a company u ,rn alter ils share capital by making a spec ia l reso luLion unless the art icles provid e otherw ise. L8. I a1n guided b_y the decision 1n Lhe case of ZAMBIAN HIGH LIGHT INVESTMENTS LTD V REGISTRAR AND CHIEF EXECUTIVE OFFICER PATENTS AND COMPANIES REGISTRATION AGENCY (2021) ZMHC 50 1 in whi c h Lhe Cou 1·L slated as follO\,vs: "It is manifestly clear that the intention / objective of the legislature was for the threshold of a special resolution under section 140(1) of the Companies Act to simply be the default position which can however be relaxed (by the articles) to the lower threshold of an ordinary resolution as per example given in the Standard Artie les". JlS 4.9 . Vrorn Lhe evidence before me, Lh c Ct)mpany's artic les 111 rclaLion lo creation of ncvv shares mirror I he standa rd artic les . Regulation 9 paragraph 37 as shown on Pc1gc 5 1 of lh c Defendants bundle of docurnen ls provides as fo llows; "The company may by resolution: {a)increase its authorised share capital by the creation of new shares of such amount as is specified in the resolution" .... l<'l.1rlher, regu lation 1 paragraph I defines a resolution as "an ordinary resolution". 4 . 10. IL Lhercfore fol lows Lha l, in o rder for Lhe Company's share slrucl ure Lo be a ltered, Lhcrc was need fo r an ordinary rcsoluLion lo be passed. The Defendants have filed inlo evidence and referred Lhis Court lo t.hc copies of resolutions which cffcc lcd of gave rise Lhe increase in s h are ca pita l ,11HI ailo t11 1v11l or s hare s. The issu e this raises c1nd Lo be determined by tl11s Cuun is'" itli rcg,1:·cls :.lie , al ic.l iL, ~rnd lcgct! iL)' or th e :mid rcsoluLicrns. 4 . 11. have drmvn my at. Len Lion Lo Lh e spe cial ,-esoluLion d ,1lccl !J :li Au gu s t ,2000 on pc1gc 89 o f the l)cfcndanLs buncl lcs of documcnLs. F'rom l h e ev id e nce p rcsc1 1t c d h:,' l. hc p,1rtics to I.his Co urL, il a ppears Lo be Lhc rirs l resol ut io n pus l in co rpormio n o r C ity or Lusaka Footba ll C lu b 2000 Pie. The said resolution is re prod u ced below as follows; "The Shareholders of the City of Lusaka Foo tba ll Club 2000 P lc HEREBY RESOLVED at a meeting held on the 4 th of August 2 000 t hat the Direct ors of the Company are generally and unconditionally authorised pursuant to Section 216 of the Companies Act, Chapter 388 of the Laws of Zambia to exercise all powers of the company t o allot Two Thousand (200 0 ) redeemable preference shares of Kwacha One m illion {Kl,000,000=00) e ach at par and Three Million (3 , 000,000) Ordinary Shares of Kwacha One Hundred (Kl 00=00) each at par in accordance with the terms of an agreement dated 31 st J16 July 2000 entered into between t he company (1) certain individuals (2) and the certain investor ("The Subscription Agreement"). This authority shall expire on the 31 st August 2000 but shall extend to allotment of shares pursuant to the Subscription Agreement made after that date. And it was FURTHER RESOLVED that the Articles of Association shall be amended accordingly. " 4 . l 2 . Section 216 of t h e repealed Companies Act provides as follows; "The directors of a company sha ll not, wit hout the approval in accordance with this section of an ordinary resolution of the company- (a) sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking or of the assets of the company; (b) issue any new or unissued shares in the company; or (<::J cr~at£! or:_gr.ant a n y_r_ights or options entitling the holder§ t_hereqf to af_qul!"e ~_har:,~s gf any 2lass in the company". 4. 13. The Court or /\ppcal i n Lhc cusc of MARSHLANDS CONSORTIUM LIMITED AND OTHERS V FELICITUS KABWE CHIBAMBA APPEAL NO .. The Directors of a company cannot issue shares in a company without the approval of an ordinary resolution of the company. Therefore, in the present case, we are of the view that the Directors of Ultimate Insurance lacked the authority to issue shares .. . as no prior resolution of the members authorising such an allotment had been 111ade in accordance with Section 216(1) of the repealed Companies Act". J17 4. 14 . In casu, lhe rcsolulion stales l hat a meeting was h eld on lhe 4Lh of Augusl 2000 nl whic h the S h areholde rs gave powers LO lh c Dircclors in ;wcord,rn cc with Section 216 of the repealed Companies Act_. OW 1 ,t!S<l kst1fwc! tlllclcr cross t'X~1rni11,1tion th,1t t he Shareholders o f City of Lusaka F'ooLball Club (200 0) PLC co nvened to pass l h c s peci al resolut io n in 4 .8 above but has not shown anyt hin g in e vid e n ce lo show that there 1.,·c1s :1 duly co11vc11cd mc<·ting at ,,vh ich the resolution was passed. 4 . 15. l! is a trite pri11eiplc that. t.hc partv vvllo alleges a fact rn usL prove. Th e Su prem e Courl guided on who bears t.hc burden of rroo f in a civ il mallcr in lhe case of KUNDA V. KONKOLA COPPER MINES PLC APPEAL NO. 48 OF 20055 , \\'lh·n it s;1id : "He who alleges must prove that allegation. This principle is so elementary, the court has had on a number of occasions to remind litigants that it is their duty to prove their allegation, of course it is a principle of law that he who alleges must prove the allegations." 4. 16. The gc11cral ,·ulc relating Lo t.hc bu rden of proof in c ivil cas es is slated as fo llO\-\'S by Lhc lear ned authors of Phipson on Evidence, seventeenth edition (Thomson Reuters (Legal) Limited 2010) "So far as the persuasive burden is concerned, the burden of proof lies upon the party who substantially asserts the affirmative of the issues. If, when all the evidence is adduced by all parties, the party who has this burden has not discharged it, the decision must be against him. It is an ancient rule founded on considerations of good sense and should not be departed from without strong reasons." 4 . 17. The learned au tho rs or Phipson on Evidence, (supra) continue in paragraph 6-06 at page 151 as follows: "This rule is adopted principally because it is just that he who invokes the aid of the law should be first to prove his case; and J 1 8 partly because, in the nature of things, a n egative is more difficult to establish t han an affirmative. The burd e n of p roof is ftxed at the beginning of the tri al by the state of the pleadings, a nd it is settled as a question of law, remaining u n chan g e d throughout the trial exact ly where the pleading place it., and never shifting in deciding which party a sserts the affirmative, regard must be had to t h e substance of the issue and not merely to its grammatical fo r m; the latter t h e p lead er can freque ntly vary at will. " 4 . 18. I:unhn, Li ll' lu1rncd auL11or I>elc1· Mu rph y in hi s book "Murphy on Evidence' i,1 n·spcct of Lill' burden or proor sLmcs al i,a gcs 89 a n d 90 Lhal: "The legal burden of p ro of as to any f act in issue in a civil case lies upon t he party who affirmatively asserts t hat fact in issue and t o whose claim o r defence proof of the fact i n issue is essential ... if the p laintiff fa ils to pro ve any essential e le m e nt of his claim, the defendant wi ll be entitled to j udgment. The position of the defendant is somewhat different. S i nc e t he plaintiff affirmatively asserts his claim, the plaintiff bears the burden of provi ng t h e claim and the defendant assumes no legal bur den of p roof by merely d e nyin g the claim. However, if the defendant asserts a d ef ence which g o e s beyond a m e re denial (s ometimes) referred t o as an affirmat ive defence) the defendant must assume the legal burden of proving s u ch defence. An af firmative defence is most easily recognised by the fact that it raises facts in issue w hich do not form part of the plaintiffs claim" 4.19 111 lliis p IT~cn1 c,1sc, t.hL' l')la i nli lT has L11c burden ot' pruving i ts cas e on a ba l a n ce of probab ililics in order LO cslabl i sh ils cla i ms before Lhis C o url crnd saLisfy lhat. Lh c Plain Li ff is cnlilkd lo lhc relief's sough l in Lhis action. J19 tJ .20. The l)cfcnclrnns rnT u11c!cr 1w ol)li r w ion 10 prove Lhc falsity o f Lhc o f lhc l)l.11nltffs' cla im . I lowcvcr I fi11cl 1h,1 t , Lhe l)efcnclclnLs have gone hcyond mere denial and have made an c:11Tirmmivc defence and have assumed 1.he le~!al burden of proving IIs defence. ~ .21 . In the absc11cc- of cv iclcncc-, I find l)W l's Lcslimony that cl duly co nvened rnccling was held on Lhc 4 th of /\ugusl, 2000 ralhcr unconvi ncing. The Defendants have not prod u ced anythin g i n evidence Lo show thal t he mcc1 ing was rropcrly called in acco rrlancc vvi t h the provisions of Lhc la w, let alone to sho\\' tlrnt the n1ccting notice was sent oul Lo Lhc members \\'HS ca lled \\'ho attcnclccl a11d anwlll_v LOok p lace. ti .22 . Whal I have before for me is only a rcsolutio 11 and in order the Cou rt t.o <lc-t1T 1ni1H· \\'hvthc r or 1101 th e resolution is valid, t he Defendant oughl l o have shown !hat the rcsolut.ion wc1s passed in accordance v,,ilh lhc provIsIons of th e /\c l c.111d Lhc c.1rticlcs. They ought lo h ave shown thHL a meeting was properly ca lled and thc.11 indeed 1hc Shareholders convened Lo pass Lhc resolution dalcd 4i1i /\ugusl, 2000. T he m embers / :-;hc-1rcholdcrs of the Comp~rny were IO in number as indicated in p,1 r :1grnph -~- 1 l cine! 2 .2 1 above. 4 .23 . i n ~he cibscncc of proof, I rind the l<csolution dated 4i:, Augusl,2000 i11valid and La inLcd \\'ith illegality. It Lhcrdorc, follows that any .:-;ul1sc·quc111 c!c-t i~iu11 :111cl cl1c111gcs 111c1dc on the s!r,:ngth of 1.his specia l rcsolut io11 is illcg~.1I 4 .24 . The finding on Lhc illegality or Lhc rcsolulion LhaL Lhc I st Defendant presented to Lhc Court means Lhal all subsequent acLions and resolutions by the I s L Dcl'c11dclnl. ,ire: fruiL of an illcguliLy and Lh us void abinitio. J20 4.25. IL follows from Lhc discussion above Lhal the purported Lrnnsf"cr/sell of Lhe shares c1nd dcbl is void at. law. The 1st Ddc ndanL did nol possess !cg,il right/rnancbtc to lrnnsfc-r anyth ing Lo the 2 nci l)cfendanl. 1J .26. 13) rc.ison ol Lhc finding 8l)(>Vc: iL l>cc1>111t·s oLiCJse 10 cons id er the olhcr of the Pi.l!n{iffs cl,1ims, and counLcT claims on record . IJ.27. In light of Lhc c1bovc. I am a li ve lo Lhe subslanlivc dcvclopmcnls that Lhc 1nd Defendant has made on the land Lhat was illegally Lransfcrred Lo them. I Lc.1kc judicial 110Licc or ll1c c.kvclopmcnt s to inc lude but nol limited Lo Lhc conslruclion of Lhc ma ll knovm a s Lcwanika Mall and Lhc improvements lo the club h ouse/offices and the fi elds/p itch . Surely the Plrnnuff or a party canno t be unjuslly enriched . •1.28. IL I!-. a scLLkcl principle or la\\· that la\\' and cc.iuiLy srwll be administered co:1cu1Tc1 1tl_v . Section 13 of the Hight Court Act pr~)vicicc; ,rnd follows: "In every civil cause or matter which shall come irt dependence in the Court, law and equity shall be administered concurrently, and the Court, in the exercise of the jurisdiction vested in it, shall have the power to grant, and shall grant, either absolutely or on such reasonable terms and conditions as shall seem just, all such remedies or reliefs whatsoever, interlocutory or final, to which any of the parties thereto may appear to be entitled in respect of any and every legal or equitable claim or defence properly b1·ought forward by them respectively or which shal l appear in such cause or matter, so that, as far as possible, all matters in controversy between the said parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided; and in all matters in which there is any conflict or variance between the rules of equity and the rules J21 of the common law wit h refere nce to t he same matter, the rules of equity shall prevail". 4.29 . The Zamb ian Supre m e Courl in lhc case o f GEMISTAR ENTERPRISES LIMITED V AFGRI CORPORATION LIMITED (2017) ZMSC 1597 upheld lhe principle staled by Lord Wrigh l in lhe case of FIBROSA S POLKA AKCYJNA V PAIRBAIRN LAWSON COMBE BARBOUR LTD (1943) AC 328 as fo ll ows: "It is clear that any civilized system of law is bound to provide remedie s fo r c ases of what has been called unjust enrichment or unjust benefit, that is, to pre vent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep .... " :). CONCLUS ION -·-- - - - 5. 1. The Plai ntiff's case s u cceeds based on Lhe grounds advance above. l Orde r Lhat the status of ownership of Stand No. 2757 and Stand No. 3034 and shareholding a n d gove rnance struc t u res revert Lo th e p osition al incorporalion of City of Lusa ka F'ootba ll Club (2000) PLC. I. e. l h e representatives of Cavmonl Securities Ltd and cu r renl truslces of C ity of Lusaka roolball Cl u b 1970. 5 .2. I Order Lhal Lhe Pl a in t iff should n ol be unjustly en riched a nd il is in lh e int.crests of justice that the 2 nd Defendan t be reslituled/eompensa ted for the developments on the Plain Liff's land/ properly. The PlainlifT shall bear I oc¼i of the eslimc.1Lec..l value of the dcvl·loprnc11ts by the 2 n d Dcfcndan l. The 90% sha ll be borne by the I st Defendant. who in my op in ion orchestraLect the events leading Lo this acLion a nd lhe 2 11c1 dcfend anl 's loss/ dam age. 5 .3 . I also Order t.hat the I st Defendan t adequately com pensates the 2 nd Dcfendanl for all losses a nd damages, suffered by reason of Lhe l st J22 DclcnclanL's illcg":I and irregular aclions surrounding Lhc r cso luLions and purported s<'ll or shc11 L's .rnd ;1ssc1s of Cit_v or Lu sc1kc1 Football Club 2000 . S.'-1. I lurthcr Order tha t Lhe l)arlics arc given 4 months wiLhin which Lo sc!tlt-/;__1grn· Llit · d :1 111ngcs , luss ,111cl 1c·sLi lu Lio11 amounts c.1mong t hcnisclvcs. Failure to which any party be al liberLy lo apply before the l<cgislrar or Lhc I ligh Court siLLing at Lusaka for assessment. 5.5 . Costs for Lhc Plain Liff Lo be borne bv Lhc 1 sL Ddcnd anl ancl taxed in rldault of agrccmcnl. S.6. Leave Lo c.1ppcal is gramcd . Delivered at Lusaka on 9 th December, 2024. REPUBLIC OF ZAMBIA- S. CHOCHO HIGH COURT JUDGE . ~ r-- HIGH COURT OF ZAMBIA u ~ o;:c ···,2· -- -·-, ,J. '/r't." '---- __J l•J 'f ~ \ t1 ,( L • , S. CHOCf 10 .,J P. O. BOX ;:,Qu6 7, LUSAKA