Gustav Rex Chilufya Mulenga v Zambia National Building Society (SCZ APPEAL NO. 14 of 1991) [1991] ZMSC 63 (31 May 1991)

IN THE SUPREME COURT OF ZAMBIA SCZ APPEAL NO. 14 of 1991 HOLDEN AT LUSAKA (Criminal Jurisdiction) BETWEEN: . GUSTAV REX CHILUFYA MULENGA Appellant and ZAMBIA NATIONAL BUILDING SOCIETY Respondent CORAM: Ngulube D. C. J., Sakala and Lawrence JJ. S 21 Ma£ 1991 and 31 May 1991 For the Appellant: In person For the Respondent: Mr. M. Z. Mwandenga of Counsel , ‘ ' s ■ ’j 4 JUDGMENT , Lawrence, J. S., delivered the judgment of the court. : " ' f This is an appeal by Gustav Rex Chilufya Mulenga from a Ruling by Mambilima J., dated November, 14th 1990 wherein his application, seeking a declaration that he had redeemed his mortgage with the Zambia National Building Society and his prayer for other related orders, was dismissed. For convenience we shall hereinafter refer to Mr. Mulenga as the plaintiff and Z. N. B. S. as the Society. ------ - ;i i The reliefs sought by the plaintiff in the court below, as evidence by the endorsement on the originating summons filed on the 18th day of July 1990 were as follows: "1. (i) That the plaintiff redenned the mortgage on STand No. 6996 Lusaka on 30th June, 1987 the date on which the cheque for K55.711.88 was met. (ii) Delivery to the plaintiff by the defendants of Certificate of Ti tle to Stand 6996 Lirsaka with an endorsement of a redemption manorial and the delivery by the defendants to the plaintiff of the Certificate of Discharge of mortgage. (iii) Order for the refmd of K4,192.30 with the interest from 30th June, 19S7. (iv) Order Court that the plaintiff borrowed the basic agc^egate advance of 1(26,000.00 and not K28,608.58 and an order for the return by the defendant to the plaintiff of difference of K2,608.53 with interest from 30th June, 1987. 2. Alternatively an order be made that I redeem the mortgage at Govemrent lending interest rate of 6} as at 30th June, 1987 as ordered by Hon. J2 Gibson Chigaga, Minister for Finance and in view of the fact that Senior officials of the defendants had, in readiness to inplemont the Minister's instruction worked a progression schedule at 82 interest which would have resulted in my redeeming the mortgage at about K44.000.00 but that this auspicious trend was frustrated or reversed by the sudden appearance on the scene of Mr. iindia vho now stands banned or dismissed apparently for conspicous eccentricity from the defendants by the authorities, and who was in clear contunacy or stiiicn disobedience of a lawful instruction by tiie Hon. Minister for Finance. 3. Tnat the cost of this action be ordered homed by the Defendants11. The claim arose in the following circumstances, that is, that by mortgage dated 7th November, 1975, the plaintiff’s property, namely, Stand No. 6996 situate at Lusaka, in the Lusaka Province, was charged by the plaintiff by way o^egal mortgage in favour of the Society to secure a loan from the Society of the sum of K16.500 with interest thereon. By a further charge dated 4th February, 1976 the plaintiff obtained a further advance of K4.500 bringing the total amount secured to K21,000. No payment of the principal or interest was made by the plaintiff so that by the 23rd of August, 1977 when the plaintiff received a further advance of K5.000 the/sum owing to the Society had risen to K23,608.00 thus bringing the total amount charged on the plaintiff*s property at the new date of appropriation, that Is, 9th November, 1977, to K28,608.00. At the time of the third charge the rate of interest had risen from K8.50 per cent per annum to K9.00 per cent per annum and the monthly rate of repayment of the principal and interest had thus risen from the original K137.00 to K230.00. Apart from two payments of K100 each made in March 1982 and August, 1984 the plaintiff failed or neglected to make repayments which failure or neglect prompted the Society, on the 21st day of May, 1986 to issue originating summons for: "(1) Payment of all the monies due to the plaintiff under the respective covenants in the Mortgage dated 7th itovaiier, 1972, Further Charge dated 4th February, 1976 and second furtiier charge of 23rd August 1977 made between the Defendant of the one part and tfe Plaintiff of the other part and such costs as would be payable if this claim were the only relief granted or (2) Delivery by the Defendant to the Plaintiff of possession of Plot No. 6996 - Woodlands Extension - Lusaka the property comprised the said Mortgage - A® (3) That the said Mortgage may be enforced by foreclosure and (4) Further and other relief." The supporting affidavit filed with the above claim showed that the total amount due and owing as at 1st December, 1984 was K51,519.58. : J4 : costs, claimed by the Society under causa Number 1986/HP/1100. The learned judge's ruling was based on the fact that the Society had made it clear In the affidavit in support of summons issued in May, 1936 that the sum of K51.519.53 was the amount outstanding as at 1st December, 1984, two years before the commencement of cause No. 1986/HP/1100 supra. She found that even though the plaintiff had paid a sum of K55.711.38 this sum was not sufficient to redeem the mortgage as there was an outstanding amount arising from the interest which had accrued between 1st December, 1984 and 30th June, 1987 when the plaintiff paid , K55,711.88 and which interest continued to run up to the date of the ruling appealed against. • , • ’ ;: “ -A Ne are of the view that had the learned judge taken into account the circumstances under wh^ch the plaintiff tendered the sum of K55.711.88 she would not have arrived at the conclusion which she did. ; The writ and the accompanying affidavit issued by the Society in ' May, 1986 clearly stated that the amount which was being claimed was the sum outstanding as at 1st December, 1984 and this meant that interest had continued to accrue through 1985 and 1986 and would continue to run up to the date of payment of the 'principal and the interest so accrued. However, the crux of the matter is that by affidavit dated , 31 November, 1986 in opposition to the Society's claim the plaintiff declared his willingness to redeem the mortgage. The said affidavit states, inter-alia, as follows: "5. I am expecting about 1^0,000 from uiinpeachable and sure source by 30th June, 1987. 6. Against this I have deposited with the plaintiff's solicitors a post dated cheque dated 30th Jine, 1937 for K55,711.88 to fully redeem the mortgage on tiiat date." The plaintiff was clearly saying that he had the means to redeem and demonstrated this by the fact that his cheque in the last mentioned amount was met by the bank. The Society on receipt of this payment did not even attempt to disillusion the plaintiff by pointing out to him that as at 30th June, 1987 the amount outstanding had since risen from K51,519.58 to K72.262.72, but instead, nealy five months later, wholly discontinued proceedings against the plaintiff by Notice of Discontinuance filed in the High Court on the 24th November, 1987. The Society did not decline the tender nor was there any explanation that there was still an outstanding balance due to the Society. However, the Society continued to charge interest'* on the balance and when the plaintiff eventually requested the return of his Title Deeds he was confronted with another bill for K61.502.83. This we find, not only unreasonable, but unconsionable as well as being inconsistent with and repugnant to the rules of equity. From the evidence on record the plaintiff’s intention, when making the tender in his affidavit (supra), was clearly to redeem the mortgage. Since he had, at the time, "un unimpeachable and sure source" of funds we hold the view that he intended and would 4 have redeemed the mortgage on the 30th June, 1987 had the Society revealed to him that at the time the full redemption figure was £ 1(72,262.72. The computation by the Society at the end of the record after 30th June, 1987 is, therefore, unacceptable to the court and, in equity,' grossly unfair and total uncounsienable and cannot be held against the appellant who was not given the proper figures for redemption. He was clearly entitled to know how much he was liable to pay when he enviced the desire to redeem the mortgage. For the foregoing reasons we allow the plaintiff’s appeal and accordingly find that the Society is entitled to interest on the principal sum borrowed only up to and including 30th June, 1987 when the amount of 1(55,711.88 was paid. As earlier pointed out the figure at the date of tender if payment was K72,262.72 to which should be added interest; at seventeen and a half per cent for the months of April, May and June 1987 which we put at K3159.92 making the total redemption figure K75,708.76 less K55.711.88 already paid. The amount payable by the plaintiff to the Society in order to redeem his mortgage is, therefore, K19.708.76. We have not heard any convincing reason why we should allow interest on this sum and accordingly order that the plaintiff pays the above sum free of interest. Monies if any, paid by the plaintif 1 to the Society after the 30th June, 1987 over and above the K19,708.76 be immediately re-imbursed to the plaintiff with interest at the rate of seventeen and a half per cent from date of over payment to the date of this judgment. Having reached this conclusion we find the other grounds of appeal and other subsidiary matters to be no longer material, but we must add that we found the inclusion of legal costs and the charging of interest thereon, as appeared on record in the Society's computation, of the figures, to be in the least a very strange practice. J6 : The appeal having been successful we award costs both here and below to the plaintiff. ■? V’ ' M. N. S. W. NGULUBE DEPUTY CHIEF JUSTICE E. L. SAKALA SUPREME COURT JUDGE A. R. LAWRENCE SUPREME COURT JUDGE