Inde Credit Company Limited v Green Park Transport and Construction Limited and Ors (Appeal No. 31/2023) [2024] ZMCA 80 (28 February 2024)

IN THE COURT OF APPEAL OF ZAMBIA HOLDEN AT NDOLA (Civil Jurisdiction) ) AppealNo.31/2023 BETWEEN: INDE CREDIT COMPANY LIMITED APPELLANT AND GREEN PARK TRANSB CONSTRUCTION LIMI :E ~ lffl-- -- - T RESPONDENT REJI ANTHONY . - - - - n RESPONDENT PRAJAM RESY MANNEMP lrl\T- - - 3RD RESPONDENT CORAM : Siavwapa JP, Chishimba, and Banda-Bobo JJA On 20th February, 2024 and 28th February, 2024 For the Appellant : Mr. Y. S. Simukonda of Messrs. Noel Simwanza Legal Practitioners For the Respondent: Mr. M. Mwachilenga of Messrs. James & Doris Legal Practitioners JUDGMENT CHISHIMBA JA, delivered the judgment of the Court. CASES REFERRED TO: 1) Wilson Masauso Zulu v Avondale Housing Project Limited (1982) ZR 2) Zambia Radiological & Imaging Company Limited v Development Bank of Zambia SCZ Appeal No. 28 of 2016 3) Tuesday Mulenga v Mutambo SCZ Appeal No. 123 of 2018 4) Angel Musonda v Pulse Financial Services SCZ Appeal No. 132 of 2017 J .2 5) Queens Royal International v Mambwe & Another CAZ Appeal No. 25 of • .. 6) Chuuya & Another v Hankwenda SCZ Judgment No. 3 of 2002 7) Wishimanga v NIEC SCZ Appeal No. 50 of 2011 8) Colgate Palmolive (Z) Inc. v Shemu & Others SCZ App . No. 11 of 2005 (unreported) 9) Wilheim Roman Buchman v Attorney General (1993-1994) Z. R. 131. 10) Philip Mhango v Dorothy Ngulube & Others (1983) Z. R. 61 11) Continental Restaurant & Casino Limited v Arida Mercy Chulu (2000) ZR 128 LEGISLATION CITED: 1) The Judgements Act Chapter 81 of the Laws of Zambia. 2) The High Court Rules Chapter 27 of the Laws of Zambia. 3) The Law Reform (Miscellaneous Provisions) Act Chapter 7 4 of the Laws of Zambia OTHER WORKS CITED: 1) Chitty on Contracts. 26 th edition. Volume 1 2) Halsbury's Laws of England 4 th edition. Volume 4 3) Black's Law Dictionary, 10th edition 1.0 INTRODUCTION 1.1 This appeal arises from the judgment of Mrs. Justice Abha N. Patel, as she then was, dated 8 th November, 2022. In that judgment, the Learned Judge found that the appellant had failed to discharge the burden of proof in respect of its claims for delivery and possession of Stand Numbers 4808 and 4 768, Solwezi, foreclosure, sale and/ or elegit in respect of earthmoving equipment. The lower court only awarded it J.3 payment of money due under the term loan facility to be • assessed by the Registrar . 1.2 The Learned Judge also dismissed the respondents' counterclaim for the sum of Kl,520,000.00. The court upheld the claim in the sum of US$328,301.00 in respect of the purchase of earth moving equipment. The said sum was subject to assessment and off-setting from the amount found due to the appellant. 2.0 INTRODUCTION 2.1 In February 2020 , the 1st respondent applied for a loan facility in the sum of $228,520.00 to purchase earth moving equipment namely, JCB 3DX Super Backhoe Loader and JCB JS205LC Tracked Excavator for its operations. Following board resolutions of the 1 st respondent, the parties executed a term loan facility for the said amount to be repaid over nineteen monthly instalments of $17 ,279.00 . Interest was agreed to be charged at 1.9% per month on a reducing balance but would be adjusted to 2.5% on any outstanding amounts. 2.2 It was a term of the loan facility that the loan amount was to be repaid from receivables from Buks Haulage Limited. J .4 Should the contract with Buks Haulage Limited end before • the loan is settled, the 1 st respondent would settle it using other resources provided the loan was fully settled by September, 2021. The appellant averred that the other terms of the facility were that the earthmoving equipment, once purchased, would be placed as security for the repayment of the loan by which a contract of sale for the same to the appellant was pre-executed. Further security was in form of a deposit of certificate of title for Stand Nos. 4808 and 4 768, Independence Avenue, Solwezi. 2.3 By letters of undertaking, the 2 nd respondent undertook to execute a legal mortgage for the property pledged as security whenever called upon. Further, the 2 nd and 3 rd respondents jointly and severally guaranteed repayment of the loan by the 1 st respondent together with interest, charges and costs. 2.4 The 1st respondent defaulted on its loan obligations prompting the appellant to make several demands for payment from the respondents. Subsequently, the appellant discovered that the 1 st respondent had obtained another loan from a bank using the same property pledged as security with the appellant, and withdrawn all amounts in its bank account J.5 to which the appellant was a co-signatory without its • knowledge or consent . 2.5 Upon the appellant discovering that the 1 st respondent had ceased all operations in Zambia, it proceeded to seize the earth moving equipment. 3.0 APPELLANT'S CLAIMS IN THE COURT BELOW 3.1 As a result, the appellant commenced an action against the respondents by way of amended originating summons dated 15th June, 2021 seeking the following reliefs: 1) Payment of the sum of US$207,412.12 by the Jst, 2nd and 3rd respondents being money due under a term loan facility executed between the appellant and the respondents; 2) Delivery and possession of the mortgaged property Stand No. 4808 and No. 4768 Independence Avenue, Solwezi in the Northwestern Province of the Republic of Zambia; 3) Foreclosure and sale of the mortgaged property Stand No. 4808 and No. 4768 Independence Avenue, Solwezi in the Northwestern Province of the republic of Zambia; 4) Sale and/ or Elegit powers in respect of earth moving equipment namely, JCB 3DX Super Backhoe Loader and JCB JS205LC Tracked Excavator placed as security for a term loan facility between the appellant and the 1 st respondent; 5) Costs, interest and any other relief the court may deem fit. 4.0 RESPONDENTS' DEFENCE AND COUNTERCLAIM 4.1 In their defence, the respondents averred that interest on the term loan facility was calculated to be on a reducing balance J.6 basis of 1. 9% at the time the interest accrued and that the 2.5% was only applicable on outstanding amounts. It was a term of the facility that should Buks Haulage Limited become incapable of honouring its commitment to the 1 st respondent, the 1 st respondent would be at liberty t o settle the loan at whatever time using other sources provided the loan was fully settled by September 2021. 4.2 The appellant received information that Buks Haulage Limited would cease to conduct the works for which it had contracted the 1 st respondent. On this basis, the agreement for the sale of the earthmoving equipment was executed on 6 th October, 2020. As regards the terms of the letter of Guarantee, the appellant, being made a co-signatory to the 1 s t respondent's bank account and the placing of the property as security, the respondents averred that these were overtaken by the sale agreement which came later in time. 4.3 The respondents disputed that there was default at the time the matter was commenced because the facility agreement allowed the 1 st respondent the liberty to clear its indebtedness up to September 2021. Further that the agreement itself set J .7 the monthly repayment plan in the event of Buks Haulage Limited ceasing its business with the 1 st respondent. 4.4 The respondents averred that the account statement issued by the appellant showed that the 1 st respondent's loan account stood at $172,933.12 as at August 2021. This statement was said to include interest that had accrued while the matter was in court and was not calculated on a reducing balance as per the terms of the term loan facility . 4.5 On 1st March, 2021, the appellant seized the JCB 3DX Supper Backhoe Loader alleging that the 1 st respondent had ceased all its operations in Zambia. It was averred that the appellant seized the equipment so as to use it for profit and that the seizur e was done before the agreed time for possession in the sale agreement without any lawful authority. The 1 st respondent refuted ceasing operations in Zambia. As a result of this seizure, the respondents averred that they incurred losses in the sum of Kl ,520,000.00 being income for 190 days. 4 .6 It was further a verred that the appellant and the respondents entered into an agreement for the sale of the equipment in issue on 6 th October, 2020 in the sum of $328 ,301.00 which J.8 was to be paid to the respondents by the appellant on 6 th September, 2021. However, the appellant has to date neglected to pay for the equipment even after seizing it and is indebted to the 1st respondent in the sum of $328,301.00 4.7 For these reasons, the 1s t respondent counterclaimed seeking the following reliefs: 1) The sum of Kl,520,000.00 lost by the 1st respondent on account of the appellant having grabbed the JCB 3DX Supper Backhoe Loader on the 1 st March, 2021 leading to the 1 s t respondent to lose its income from Siltek Limited; and 2) An order that the appellant pays the 1st respondent the sum of $328,301.00 being the purchase price for the JCB 3DX Supper Backhoe Loader and JCB JS205LC Tracked Excavator sold to the appellant by the 1 st respondent. 5.0 EVIDENCE IN THE COURT BELOW 5.1 The appellant's witness, Chipasula Chisanga (PWl), the Senior Relationship Manager, gave testimony that was similar to that in the affidavit in support of originating summons save that upon discovering that the 1st appellant had ceased operations in Zambia and was in default, it was prompted to seize and sale the two pieces of equipment placed as security pursuant to the pre-executed agreement to sell. J .9 5.2 It exhibited the account statement of the 1 st respondent before seizure and sale of the equipment at page 356 of the record of appeal, while pages 357 to 359 of the record of appeal shows the account statement after the seizure and sale. 5.3 In cross-examination, PWl conceded that clause 6 of the term loan facility did not say that the 1 st respondent was to settle the loan immediately the Buks Haulage Limited contract failed , but provided for the 1 st respondent to settle the loan using other means within the loan repayment period. He admitted that court process was issued in March 2021 before the due date for completion in September 2021 and that the contract with Buks Haulage was terminated in November 2020. 5.4 The witness admitted that Reji Anthony did not sign the security agreement to sell the two pieces of property at page 339 of the record of appeal and that he is the one that wrote the date of 6 th October, 2020. He told the court that the appellant got the power to sell the two pieces of equipment from the security agreement at page 338 of the record of J.10 appeal and that they were sold in December 2021 while the matter was still in court. 5.5 PWl conceded that after selling the two pieces of equipment, the appellant did not pay the 1 st respondent the selling price of $328,301.00 even when they had committed to pay the amount to the 1 st respondent as seller. He stated that the TLB machine was not seized from the 1st respondent but was abandoned by them in the bush. 5.6 He stated that the appellant is claiming $207,412.12 from the 1 st respondent, but that it is not owed that money. 5. 7 The respondents' sole witness was Reji Anthony, a shareholder and director in the 1 st respondent. He stated that on or about October 2020, Buks Haulage Limited terminated its con tract with the 1 st respondent and the 1 st respondent notified the appellant. This brought to life the repayment provision under clause 6. On 6 th October, 2020, the appellant offered to purchase DWl 's property, namely, Stand Nos. 4808 and 4 768, Solwezi at $328,301.00 and presented him with a pre-executed and pre-dated sale agreement appearing at page 3 77 of the record of appeal which he turned down and refused to sign. J .11 5.8 The appellant then offered to purchase the two pieces of equipment and convinced him that if the 1 st respondent failed to pay the loan amount by 6 th September, 2021 , the appellant was interested to buy the said equipment in the sum of $328 ,301.00. This resulted in the 'agreement to sell property' at page 376 of the record of appeal which was pre-signed and pre-dated by the appellant. The appellant secured a contract for the tracked excavator with Bresmar Building Materials Limited. 5 .9 On 20 th January, 2021, the 1st respondent secured a contract for the JCB 3DX Supper Backhoe Loader with Siltek Limited as per the contract at pages 379 to 381 of the record of appeal. This machine was seized by the appellant on 1st March , 2021 , depriving the 1 st respondent of income for 190 days from 1st March to 6 th September, 2021 , when possession ought to have moved to the appellant. 5.10 DWl stated that the 'agreement to sell property' dated 6 th October, 2020 at page 338 of the record of appeal is the last document to be signed by the parties and supersedes all other documents. He denied owing the appellant $207 ,412.12 on account of the loan statement which erroneously includes J . 12 interest that had not yet become due and further includes projected commissions from the expected proceeds of invoices and orders from Buks Haulage Limited which ought not to be included. 5.11 In cross-examination, Reji Anthony confirmed that he signed the security agreement at page 339 of the record of appeal dated 6 th and 30th October, 2020. He stated that clause 6 of the facility only allowed the 1 st respondent to change the source of the money to repay the loan and not the repayment period. He denied signing the agreement to sell personal property dated 6 t h October, 2020. 5 .12 DWl conceded that he had no evidence of Silteck Limited paying the 1st respondent KB ,000.00 per day. He maintained that the 1 st respondent was only owing the appellant $172,933.12 and not the $207,412 . 12 in the statement of account. That no payments have been made since November 2020 when the 1 st respondent defaulted. That in view of interest, the amount owing would go above $300,000.00. DW 1 further admitted that when the machinery was seized, the 1 st respondent had defaulted by four months on its obligations. J .13 6.0 DECISION OF THE COURT BELOW 6.1 In her judgment, the Learned Judge considered the documents and the evidence on record. She found that the parties executed a term loan facility in the sum of $228,520.00 and that Stand Nos. 4808 and 4768 Solwezi were pledged as collateral for the term loan as per the board resolutions by the 2 nd and 3 rd respondents. 6.2 The learned Judge found that the respondents defaulted on the term loan facility as a result of which the appellant seized the equipment. The court found that though the agreement to sell personal property was not executed by the respondents , the two pieces of land were already offered as collateral in accordance with clause 5 of the term loan facility. The court below accepted that as at 31 st August, 2021 , the 1 s t respondent owed the appellant the sum of $172,933.12 as per the loan account statement. 6 .3 The Learned Judge was not satisfied that the appellant had discharged the burden of proof as to what amount the respondents owed and for that reason, dismissed the appellant's claims save the claim for payment in the sum to be quantified after assessment by the District Registrar. J . 14 6.4 As regards the 1 s t respondent's counterclaim, the court below dismissed the claim for loss of income in the sum of Kl,520,000.00 due to lack of evidence to support the same. However, the counterclaim for $328,301.00 being the agreed purchase price for the two pieces of equipment was upheld subject to assessment. The sum due to the appellant would be offset from the sum of $328,301.00 and payable to the appellant within 30 days of assessment. The parties having partially succeeded in their claims, the court made no award of interest or costs. THE MAIN APPEAL 7.0 GROUNDS OF APPEAL 7.1 Dissatisfied with the judgment of the court below, the appellant appealed advancing four grounds of appeal as follows: 1) The trial court erred in law and fact when it failed to properly consider the evidence of PW 1 by his witness statement and account statements on record produced at pages 33 to 36 of the plaintiffs bundles of documents that the balance owed to the appellant was US$87,049.00 and thus failed to find as such and wrongly referred the matter to the Honourable District Registrar for assessment ofr amounts outstanding; 2) The trial court misconstrued the agreement to sell property produced at page 15 of the plaintiffs bundle of documents J .15 as an independently operational agreement for the sale of goods upon which it upheld the defendant's counterclaim of US$328,301.00 despite having found at page JlS and J16 that the appellant had obtained executed documents to support the lending under the term loan and in fulfillment of the conditions under clause 5 thus the trial court erred in law and fact and further contradicted itself; 3) The trial court erred in law and fact when it upheld the 1st respondent's counterclaimfor US$328,301.00 as purchase price for the JCB 3DX Supper Backhoe Loader JCB JS205LC Tracked Excavator despite having already found at page Jl 6 that the two properties were already offered as collateral in accordance with Clause 5 of the term loan facility; and 4) The trial court erred in law and fact when it found that the appellant had not discharged its burden of proof despite the appellant having succeeded on its first claim subject to assessment and further when the court declined the appellant's next successive claims which were contingent on the first claim having succeeded. 8.0 APPELLANT'S HEADS OF ARGUMENTS 8 .1 The appellant filed heads of argument dated 3 rd February, 2023 and argued grounds one and four separately. In ground one, the appellant contends that the court below did not consider the evidence of PWl and the account statements at pages 356 to 359 of the record of appeal, thereby failing to find that the appellant was owed $87 ,049.05 on account of the evidence produced despite the matter having been J.16 commenced for the sum of $207,412.12 as the amount outstanding. 8.2 This was premised on the fact that, in its defence to the 1 st respondent's counterclaim, the appellant pleaded that it had taken possession of the super backhoe loader and tracked excavator which it had sold and whose sale was n ot in dispute. The proceeds from the sale were credited to the 1 st respondent's account statements produced at pages 357 to 359 of the record of appeal. That page 358 line 31 to 32 shows that the balance outstanding was now $87,049.05 at the time of trial as shown on page 359 line 3 of the record of appeal . 8.3 It was further submitted that paragraph 17 of the witness statement of PWl at page 385 of the record shows that he testified that the amount due to the appellant before the seizure and sale of the earth moving equipment was $207,412.12. Following credit entries in the sums of $25,207.40 on 30th November, 2021 and $65,000.00 on 1st December, 2021, the outstanding balance reduced to $87 ,049.05. 8.4 This was supported by the DWl 's admission in cross examination that the last instalment payment made by the J.17 1 st respondent was in November 2020. This leads to the inescapable conclusion that any credit entries on the 1 st respondent's account statements after November 2020 were proceeds from the sale of the earth moving equipment which reduced the balance to $87,049.05. 8. 5 The gist of grounds two and three 1s that the court below ought to have construed the agreement to sell personal property as part of the executed documents to support the lending under the term loan facility as opposed to an independently operational agreement. The appellant submits that the agreement to sell personal property had been executed to support lending under the term loan facility and should have been construed as a pre-executed letter of sale for equipment placed as collateral and whose purpose was to pass title thereto in the event of default. As such , it was a security document and ought to have been construed as such. 8.6 On this basis, the award of the sum of $328,301.00 to the 1 s t respondent by the court below was neither supported by consideration nor evidence on the part of the 1 st respondent as the earth moving equipment was already turned in as J.18 collateral on a defaulted loan. For this reason, the appellant submits that there could not have been a separate legal agreement and/or any such agreement at all between the appellant and 1 st respondent at the valued price of $328 ,301.00. 8.7 The court was referred to the case of Wilson Masauso Zulu v Avondale Housing Project Limited 11l that: " ... Before this court can reverse findings of fact made by a trial judge, we would have to be satisfied that the findings in question were either perverse or made in the absence of any relevant evidence or upon a misapprehension of the facts or that they were findings which, on a proper new of the evidence, no trial court acting correctly could reasonably make." 8 .8 In ground four , the appellant submits its 2 n d to the 7 th claims were contingent on the success of the first claim. That the lower court dismissed all the claims save for the 1 st albeit subject to assessment. This means that the court below granted the first claim of money owed to the appellant by which the appellant cannot be said not to have discharged its burden of proof having acknowledged that clause 5 of the term loan facility was fulfilled by the provision of security for the loan. J . 19 8.9 Having succeeded as such, the court below ought to have considered that the said amounts were recoverable with interest by sale and foreclosure of the mortgaged property, and/or sale of the earth moving equipment in the event that the respondents did not settle the same in their respective capacities as principle debtor and/ or guarantors. 8.10 The appellant contends that the court below in not granting the quantified amount to the appellant, irregularly failed to delve in to the merits and viability of the remaining claims on an unjustified assumption that the amounts due would be consumed by the counterclaim of $328,301.00 granted to the 1 st respondent. 8.11 The appellant prayed that the judgment of the court below be overturned with costs. 9.0 ARGUMENTS BY THE RESPONDENT 9.1 The respondents filed heads of arguments dated 6 th March, 2023 and argued grounds one and four together. The respondents submit that grounds one and four are misplaced and lack merit for the reason that the 1 st respondent never made any payment to the appellant to justify the bringing J.20 down of the amount owed and allegedly claimed by the appellant from $207,412.12 to $87,049.05. 9.2 That the claim by the appellant was at variance with the evidence on record. The evidence adduced at trial by the appellant did not assist the court in any way as it was not cogent and did not make mathematical sense in that the claim was for the sum of $207,412.12 and the appellant claims to have recovered the sums of $25,207.40 plus $65 ,000.00 to give the total sum of $90,207.40 from an alleged secret and private sale. When the sum of $90,207.40 allegedly recovered from the sum of $207,412.12 is subtracted, it gives the sum of $117,204.72 which is different from the sum of $87,049.05 being claimed by the appellant. 9.3 On this basis, the court below was not convinced that the appellant had discharged the burden placed on it. These anomalies were never explained by the appellant in the charges that it was lumping on the 1 st respondent's loan account but went on to issue process for the sum of $207 ,412.12 when the last loan account statement was showing a balance of$172,933.12. Counsel submitted that the evidence adduced by the appellant was so confusing J.21 leading the court below to order assessment so that a correct figure can be arrived at with the correct charges and payments. 9.4 Counsel contended 1n one breath that in the agreements placed before the court, there was no provision giving authority to the appellant to sell the two earth moving equipment for purposes of recovering the loan. There is thus no justification or contractual backing for the alleged private, tainted and secret sale of the aforesaid equipment at ridiculously low prices whilst the matter was before the court and in the absence of a court order for sale for purposes of repaying the loan. 9.5 However, in another breath, the respondents contradicted themselves by stating that the earth moving equipment, having been sold to the appellant at $328,301.00 by the 1 s t respondent, the appellant was at liberty to do whatever it wanted with the equipment, having become the rightful owner after executing the sale agreement . 9.6 As regards the other claims, the respondents submit that they do not dispute the existence of the said claims but that the claims could not stand in the face of the evidence before J.22 the court. The court found that the appellant had not paid the 1 st respondent the purchase price of $328 ,301.00 while the appellant was claiming sums that were lower than that figure . This ultimately meant that it was the appellant that has to pay the difference to the 1 st respondent thereby rendering the claims for delivery up, possession, foreclosure and sale redundant. 9 . 7 Grounds two and three were also argued together. Counsel for the respondents submitted that these two grounds lack merit because the appellant has misapprehended the judgment of the court below and may mislead this court regarding the findings of the trial court . 9.8 Counsel submitted that the court below never found that the 'Agreement to Sell Property' that is , the earth moving equipment, at page 376 of the record of appeal is a security document. That a perusal of the said document shows that it was the clear intention of the parties to form a seller and buyer relationship which is governed by the Sale of Goods Act , and not a lender and borrower relationship. In this regard, the case of Zambia Radiological & Imaging J .23 Company Limited v Development Bank of Zambia 121 was cited where the court held that: "It is a cardinal principle of contract law that when the parties decide to reduce their agreement into writing, such agreement is governed primarily by the written instrument or document. The intention of the parties will have to be discovered from the written document." 9. 9 We were also ref erred to the case of Tuesday Mulenga v Mutambo l3l where the Supreme Court refused to construe a contract between a vendor and contracting purchaser or buyer and seller, as one between a landlord and tenant based on the evidence on record . Counsel further referred to the case of Angel Musonda v Pulse Financial Services l4 l where the Supreme Court cited the learned authors of Chitty on Contracts. 26th edition. Volume 1, paragraph 772 who s t ate that: "Where the 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." J .24 9 .1 0 Lastly, in respect of remedies available to a seller whose property has passed, we were referred to Halsbury's Laws of England 4 th edition. Volume 4 paragraph 881 where the learned authors state as follows: "Where, under a contract of sale the property in the goods has passed to the buyer and he wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against himfor the price of goods." THE CROSS-APPEAL 10.0 THE RESPONDENTS' ARGUMENTS ON CROSS-APPEAL 10.1 The respondents cross-appealed on 20 th January, 2023 advancing three grounds of appeal as follows: 1) The court below erred in law and in fact when it failed without any justification to apply the provisions of Order 53 rule 6 of the High Court Rules Chapter 27 of the Laws of Zambia; 2) The court below erred in law and in fact when it dismissed the 1 st respondent's counter claim for the sum of Kl,520,000.00 claimed on account of lost revenue by the 1st respondent when it was unlawfully and wrongfully put out of use of its equipment by the appellant without providing any remedy; and 3) The court below erred in law and in fact when it failed to award interest to the 1 st respondent on the judgment sum. J.25 10.2 In ground one, the respondents contend that the court below ought to have entered judgment on admission against the appellant for having failed to specifically traverse the respondents' counterclaim. That a close scrutiny of the purported reply and defence to counterclaim filed by the appellant is indicative of the fact that no defence whatsoever was raised by the appellant save for bare denials which is contrary to the rules of court in the Commercial Division. 10.3 The court was referred to Order 53 rule 6(1) to (5) of the High Court Rules Statutory Instrument No. 20 of 2012 which provides for entry of judgment on admission where the defence is a bare denial or does not traverse every allegation of fact. 10.4 Further, Learned Counsel cited the case of Queens Royal International v Mambwe & Another 151 where we stated that: "Notably, Order 53 rule 6 of the High Court Rules provides for applications for judgment on admission where there are no denials to the allegations of fact made in the statement of claim or counterclaim, or where the defence is a general or bare denial of allegations of fact." J.26 10.5 It was further submitted that the evidence of the appellant's witness statement on pages 383 to 386 of the record of appeal offers no evidence against the counterclaim. Further that the evidence of the same witness at trial did not in any way vitiate or counter the evidence of the respondents as regards the counterclaim. Unless there exists vitiating factors to a contract, parties are bound by the provisions thereof to the letter. 10.6 In ground two of the cross-appeal, the respondents contend that the court below did not provide any remedy to the 1 s t respondent when it was unlawfully and wrongfully put out of use of its two earth moving equipment by the appellant. In support of this argument, we were referred to the case of Chuuya & Another v Hankwenda 16 1 where the Supreme Court stated that: ". .. We reaffirm also that where a judgment creditor in possession of the debtor's property from which an income could be derived willfully defaults by failing to realise any income from the property, the debtor can apply to court for an inquiry of the income which would reasonably have been realized and the sum found should be credited to the judgment debtor." J.27 10.7 Counsel submitted that there was sufficient evidence . J before the court below to enter judgment for the 1 st respondent for the 190 days period during which it was put out of use of the two earth moving equipment seized by the appellant. That there is no law that requires all the parties to a contract to come and testify before a court of law. In any case, the appellant or the court could have issued a subpoena for a witness or documents from Siltek Limited, and not to dismiss the claim without any remedy. 10.8 In ground three, the respondents submit that the court below ought to have awarded interest to the 1 st respondent on the judgment sum. For authority, we were referred to the following provisions: Section 2 of the Judgements Act Chapter 81 of the Laws of Zambia which provides that: "Every judgment, order, or decree of the High Court or of a subordinate court whereby any sum of money, or any costs, charges or expenses, is or are to be payable to any person shall carry interest as may be determined by the court which rate shall not exceed the current lending rate as determined by the Bank of Zambia from the time of entering up such judgment, order, or decree until the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment, order, or decree." J .28 Order 36 rule 8 of the High Court Rules Chapter 27 of the Laws of Zambia which states that: "Where a judgment or order is for a sum of money, interest shall be paid thereon at the average of the short-term deposit-rate per annum prevailing from the date of the cause of action or writ as the court or judge may direct to the date of judgment." Section 4 of the Law Reform (Miscellaneous Provisions) Act Chapter 74 of the Laws of Zambia which provides as follows : "In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment:" 10.9 The case of Wishimanga v NIEC 171 was also cited where it was held that: "It was mandatory for the trial court to order payment of interest on the sum awarded in accordance with the law highlighted above. The trialjudge erred in not doing so. We order that interest be paid by the respondent at the average of the short term deposit rate per annum prevailing from the date of the cause of action or writ to date of judgment and thereafter at the current lending rate as determined by J.29 the Bank of Zambia from the date of judgment until the same shall be satisfied." 10.10 Counsel submitted that the issue of interest is not discretionary as every judgment for the payment of money ought to have interest. 11.0 APPELLANT'S ARGUMENTS ON CROSS-APPEAL 11.1 The appellant opposed the cross-appeal and filed heads of arguments dated 7 th February, 2024. With respect to ground one, the appellant submits that the arguments of the respondents are founded on an erroneous apprehension of Order 53 rule 6 of the HCR. That sub rule (2) of rule 6 refers to the traversal of every allegation of fact and not of every paragraph of a counterclaim. 11.2 We were referred to Black's Law Dictionary, 10th edition page 1729 which defines the word 'traverse' to mean: "A formal denial of a factual allegation made in the opposing party's pleading." That the appellant's defence to counterclaim at pages 262 to 263 of the record of appeal has clearly been settled in denial of every allegation of fact made in the cross-appellant's counterclaim as it appears at pages 254 to 255 of the record of appeal. J .30 11.3 Specifically, it was submitted that the issue in the counterclaim of the JCB 3DX Super Backhoe Loader being grabbed by the appellant without justification was addressed by the appellant showing that it had the authority to take possession of the equipment on account of the p re-executed contract of sale. 11.4 The fact that the appellant traversed every allegation of fact is evidenced by the failure of the respondents to apply for entry of judgment in the court below as alternatively envisaged by Order 53 rule 6(5) of the HCR. 11.5 In ground two, the appellant submits that to prove that the respondents suffered a loss of revenue following the appellant's possession of the earth moving equipment, the respondents ought to have proved the operation of the contract between the 1 st respondent and Siltek Limited. That the respondents ought to have demonstrated that they received income under the contract from the 30th of each preceding month in view of clause 5 which provided that lease payments were to be made on the 30th every month. 11.6 The burden of proof being upon the respondents as the alleging party, the appellant failed to discharge its burden J.31 regarding the Kl,520,000.00 whether by documentary or witness evidence relevant to prove the existence and/ or operation of the purported contract with Siltek Limited. 11.7 Lastly, in ground three of the cross-appeal, Counsel submitted that the proper construction of the law and/ or principles on judicial award of interest, is that it is applied and/ or granted on a quantified 'sum' of money. In this case, the judgmen t of the court below has not granted the appellant a quantified sum of money for which interest could have been applied or awarded. 11.8 That the parties have not been heard on assessment as ordered by the court below owing to the stay of execution of judgment. As such, there is no quantifiable amount granted due to the respondents for which execution can even be levied. We were urged to dismiss the cross-appeal in its entirety with costs. 12.0 ANALYSIS AND DECISION 12.1 We have considered the appeal, the authorities cited and the arguments advanced by Learned Counsel. Before we address the grounds of appeal, we shall briefly restate the facts of this case . The 1 st respondent desired a loan facility J.32 to purchase earth moving equipment namely, JCB 3DX Super Backhoe Loader and JCB JS205LC Tracked Excavator for its operations. It approached the appellant and was availed a term loan of $228,520.00 evidenced by a facility letter dated 30th February, 2020. 12.2 Salient clauses of the loan facility provided as follows: 3.1.1 Monthly fee on the term loan facility shall be charged at 1.9% for the first 19 months. Thereafter, 2.5% shall be charged on the outstanding amount every month. 5. Security 5.1 Greenpark Transport and Contractors Limited to write to their bankers to transfer to Inde Credit Company Limited US$17,279.00 every month for the period of the loan. 5.2 An officer from Inde Credit Company Limited to be added as co-principal signatory to Greenpark Transport and Contractors Limited's bank account held at Cavmont Bank. 5. 3 Greenpark Transport and Contractors Limited to write a post-dated letter of sale for Stand number 4808 and 4 768 Independence Avenue, Town Centre, Solwezi transferring ownership of the property to Inde Credit Company Limited. 5.4 The directors of Greenpark Transport and Contractors Limited to sign an unlimited letter of guarantees. 5. 5 In addition, and without prejudice to any security already held by the Financial Institution, the Financial Institution requires the security to cover all facil'ities granted to the borrower, whether direct or contingent and howsoever arising. 6. Repayment J .33 Equal monthly instalments of US$17,279.00 to be paid to Inde Credit Company Limited beginning April 2020, ending September 2021. Payment should be made before the end of each of month. The borrower shall repay the loan facility together with the commission from the proceeds of invoices and orders from Buks Haulage Limited. Should Buks Haulage Limited become unable to honour its commitment to the client due to any reason, the client will settle the loan repayment using other sources provided the facility is settled in full by the stipulated repayment period. Should the client fully settle the facility before September 2021, an early repayment management fee will be charged in addition to the outstanding principal at the time of settlement. 12.3 Pursuant to clause 5.3 of the facility letter, the 2 nd respondent executed a 'security agreement' in respect of Stand Nos. 4808 and 4768 Independence Avenue, Solwezi in favour of Betternow Finance Company Limited in relation to the loan facility. Further, a letter of undertaking to execute a legal mortgage was executed by the 2 nd respondent who also deposited the certificates of title of the property to the appellant. In addition, a letter of guarantee was executed by the 2 nd and 3 rd respondents in their capacities as director and shareholder in the 1 st respondent company. J .34 12.4 It is not in dispute that sometime in October 2020, Buks Haulage Limited terminated its contract with the 1 st respondent. In terms of clause 6 of the facility letter, the 1 st respondent was supposed to continue servicing the loan facility using funds from other sources but failed to do so . There is evidence on record that the appellant and the 1st respondent entered into an "Agreement to Sell Personal Property'' in respect of the two earthmoving equipment in the sum of $328 ,301.00. The said agreement has two dates: a typed date for 6 th October, 2020 and a handwritten date for 30th February, 2020 . The handwritten date was allegedly inserted by PW 1. 12.5 The said agreement provided that title of the two earth moving equipment was to be transferred to the appellant on 6 th September, 2021. It is not in dispute that no consideration was paid by the appellant for the equipment after executing the agreement to sell the property. However, on or about 1st March, 2021, the appellant seized the earthmoving equipment. 12. 6 The issues for determination 1n the main appeal are as follows: J.35 (i) The balance outstanding to the appellant in respect of the loan facility advanced to the 1 st respondent; (ii) The nature of the agreement to sell the earthmoving equipment i.e. the loader and the excavator made between the parties. Whether it was a separate, independent contract or was in effect further collateral to the loan facility; and (iii) Whether the court erred by failing to grant the appellant the other reliefs, namely delivery and possession of the mortgaged properties Stand Nos. 4808 and 4768, Solwezi, foreclosure and sale of the said Stand Numbers, sale and/ or elegit powers 1n respect of the earthmoving equipment. 12. 7 As regards the counterclaim, the issues for determination are as follows: (i) Whether the court erred by failing to enter judgment on the basis of a bare defence pursuant to Order 53 Rule 6 of the High Court Rules Chapter 27 of the Laws of Zambia; (ii) Whether the 1 st respondent had proved its claim for the sum of Kl ,520,000.00 on account of lost revenue J .36 by the alleged unlawful and wrongful possession of the equipment by the appellant; and (iii) Whether the court erred by failing to award interest on the sum in respect of the purchase price of the earthmoving equipment. 12.8 In ground one, the appellant argued that the court below ought to have found that the balance due to the appellant is in fact $87,049.05 based on the witness statement of PWl and the account statement ending 31 st December, 2021 at page 358, as opposed to the figure of $172,933.12 at page 375. A close scrutiny of the account statement at page 358 shows that the difference in the amounts arises from two part payments of $25,207.40 and $65,000.00 made on 30th November, 2021 and 1st December, 2021 . respectively. 12.9 The explanation for the differences in amounts as tendered by PWl is that the account statement at page 375 to the 1st respondent is before seizure and sale of the equipment, while that at pages 357 to 359 of the record of appeal shows the account statement after the seizure and sale. This means that the appellant used the proceeds of the sale of J .37 the equipment, or part of it, to reduce the 1 st respondent's indebtedness. 12.10 The appellant contends that the "Agreement to Sell Personal Property" in respect of the two earthmoving equipment in the sum of $328,301.00 is not an independently operational agreement, but part of the collateral under clause 5 of the facility letter. 12.11 The appellant's witness , PWl , in his testimony in court, stated that the appellant was claiming the sum of US$207 ,412.12 as per the statement of account at page 356 dated 14th August, 2020. He also stated that the sum owed as at 31 st August, 2021 was US$172, 933 .12. He went on to state that the balance due to the appellant after applying proceeds was US$87,049.05 . In addition that the claimed sum of US$207,412.12 included interest for the months of June, July and August 2021 which had not become due on the loan. 12.12 The appellant, in our view, was inconsistent in terms of the amount due to it from the 1 st respondent. It was for this reason that the court below stated that it was not the function of the court to wade through evidence and J .38 calculate the indebtedness of the 1 st respondent for claims which the plaintiff has not been able to prove. We hold the view that the appellant is owed money in respect of the loan outstanding. From the evidence on record, we cannot ascertain the amount due: this sum must be ascertained on assessment. 12.13 The starting point for assessment being from the date the sum of US$ 228, 520.00 was advanced taking into account the contractual interest up to date of assessment, and less the amounts paid by the 1 st respondent. We therefore uphold the decision of the court below to refer the amount outstanding to assessment by the Registrar. 12 . 14 The proceeds from the sale of the earthmoving equipment should not form part of the payment for reasons that will become obvious. 12.15 Moving on to the nature of the agreement to sell the earthmoving equipment, the issue 1s whether the Agreement to Sell Personal Property was a separate agreement or formed part of the collateral of the loan facility. J.39 12.16 The facility letter dated 30th February, 2020 at page 97 of the record of appeal was for a loan of US$228,520.00 with the terms earlier stated in our judgment. Clause 5 on security provided that the 1 st respondent would write to the bankers to transfer to the appellant the monthly sum of US$17 ,279 .00 for the period of the loan. That an officer from the appellant would be added as co-signatory to Green Park Transport's account at Cavmont Bank. 12.17 There was to be a post-dated letter of sale for Stand Numbers 4808 and 4768, Independence Avenue, Town Centre, Solwezi transferring ownership of the property to the appellant. In addition, the directors of the 1 st respondent were to sign an unlimited letters of guarantees. The security were required to cover all facilities granted to the borrower. This facility letter made no mention of future collateral or reference to the supper loader and tracked excavator as securities. 12.18 The parties later on entered into an Agreement to Sell Personal Property 1n which the appellant agreed to purchase from the 1st respondent the two earthmoving equipment for US$328,301.00 on 'As is' condition J.40 12.19 A reading of clause 5 of the facility letter on security, shows that the "Agreement to Sell Personal Property" was not part of the documents executed by the 1 st respondent to support the acquisition of the loan . It is for this reason that the said agreement has a typed date for 6 th October, 2020 as opposed to the handwritten date for 30th February, 2020 allegedly inserted by PWl in a futile attempt to make it a security document executed pursuant to clause 5. 12 .20 The court below was of the view that the Agreement to Sell Personal Property between the appellant and the 1 st respondent was independent of the loan agreement. This was the basis for upholding the counterclaim of US$328 ,301.00 for the purchase price. 12.21 It is not in issue that the purpose of the loan , as per board resolution of the 1 st respondent, was to acquire earthmoving equipment, which was duly acquired in due course. The agreement stipulated that "if the seller will be found to be in default of more than three instalments on the US$328,301.00 term facility" the parties agreed to transfer title on 6 th September, 2021. J.41 12.22 Can this agreement to sell be construed as an independent agreement unconnected to the loan facility? The appellant's contention is that it was additional security. 12 .23 In as much as it is illogical that the very equipment purchased from the loan facility would be sold to the lender at the higher price stated, we are of the view that the agreement is a separate contract. 12 .24 Further, we hold that this was not a collateral security for the loan facility. The appellant drew up the said document, which the parties executed. Therefore, the parties are bound by the terms and conditions of the Agreement to Sell Personal Property. 12 .25 Therefore, the court below was on firm ground when it found that the said agreement to sell and purchase the two pieces of earth moving equipment is independent of the security documents executed by the respondents. Ground two fails. 12.26 In ground three , the appellant challenges the upholding of the 1 st respondent's counterclaim for the sale of the two pieces of earth moving equipment. We note that clause 5 of J.42 the 'Agreement to Sell Personal Property', that 1s, the earthmoving equipment states as follows: 5. The parties agree to transfer title on 6 th of September, 2021, if the seller will be found to be in default of more than three instalments, on the US$328,301.00 term loanfacility. 12.27 This shows that the transfer of title was dependent on the 1 st respondent servicing the term loan facility as per the agreed instalments . Having defaulted from November 2020, clause 5 of the purchase and sale agreement kicked in to require the transfer of title. 12.28 Clause 2 of the same agreement, states that ''the buyer agrees to pay to seller and seller agrees to accept as total purchase price the sum of $328,301.12 ... " This shows that the parties thereto, as reasonable persons with the requisite capacity, had entered into an agreement. 12.29 In the case of Colgate Palmolive (Z) Inc. v Shemu & Others 181 it was held that: "If there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty in contracting and that their contract when entered into freely and voluntarily shall be enforced by Courts of justice." J.43 12.30 Having found that the said agreement to sell and purchase the two pieces of earth moving equipment is independent of the security documents executed by the respondents pursuant to clause 5 of the facility letter, we must uphold the sale and purchase agreement. Therefore, the lower court was on firm ground in upholding the counterclaim for the sum of US$328,301.00 12.31 The appellant having succeeded in ground one, the issue is whether the court erred by not granting the ancillary reliefs sought of possession and sale of the mortgaged properties, etc. In our view, we cannot fault the lower court because of her holding that the amount found due to the appellant should be off set against the purchase pnce of US$328,301.00 in respect of earthmoving equipment. We must add on that whichever party is found owing shall pay the difference to the other party. 13.0 THE RESPONDENTS' CROSS-APPEAL 13.1 In ground one, the respondents argue that the court below ought to have applied the provisions of Order 53 rule 6 of the HCR dismissed the appellant's defence to counterclaim and entered judgment on admission for failing to J.44 specifically traverse every allegation 1n the counterclaim. Order 53 rule 6 of the High Court Rules stipulates as follows: (1) A statement of claim or counter-claim, as the case may be, shall state in clear terms the material facts upon which a party relies and shall show a clear cause of action, failing which the statement of claim or counterclaim may be struck out or set aside or the action dismissed by the Court, on its own motion or on application by a party. (2) The defence shall specifically traverse every allegation of fact made in the statement of claim or counter-claim, as the case may be. (3) A general or bare denial of allegations of fact or a general statement of non-admission of the allegations of fact shall not be a traverse thereof. (4) A defence that fails to meet the requirements ofthis rule shall be deemed to have admitted the allegations not specifically traversed. (5) Where a defence fails under sub-rule (4), the plaintiff or defendant, or the Court on its own motion, may in an appropriate case, enter judgment on admission. 13.2 A perusal of the proceedings in the court below shows that the respondents never raised this issue before the court below but proceeded with the action. In the case ofWilheim Roman Buchman v Attorney General (9 1 it was held that: "A matter that is not raised in the court below cannot be raised before a higher court as a ground of appeal." J.45 13.3 The issue of whether or not the appellant had specifically traversed each and every allegation of fact made in the coun terclaim was never raised in the court below and cannot be raised on appeal. The 1 st respondent opted to proceed to trial. In any event, the counterclaim for loss of use of equipment had to be proved. We will revert to proof of the said claim in ground two . We cannot fault the court below for not entering judgment on admission pursuant to Order 53 Rule 6 of the HCR. 13.4 In ground two , the respondents challenge the dismissal of its counterclaim for Kl,520,000.00 in lost revenue for 190 days for the hire of the Tractor Loader Backhoe that was seized by the appellant. 13 .5 The 1 st respondent argued that there was evidence, through the "Equipment Lease Agreement" dated 23rd January, 2021 and the evidence of DW 1, of the fact that the equipment had been leased out to Siltek Limited at a rate of K8000 .00 per day. That this contract was frustrated when the appellant seized the said equipment on 1 st March, 2021 resulting in loss to the 1 st respondent . J.46 13.6 The court below dismissed the counterclaim on account of there being no evidence of statements, bank remittances to show remunerations received on account of the said contract, or that any witness was called to support the existence of the said contract. The court below also stated that the evidence of DWl on the said contract was shaky. 13.7 Counsel contended that there was sufficient evidence before the trial court to enter judgment in favour of the 1 st respondent in that there is no law that requires all parties to a contract to come and testify before a court. 13.8 With respect to considerations for the award of damages by a court, the Supreme Court has guided in the case of Philip Mhango v Dorothy Ngulube & Others 1101 that: "Any party claiming a special loss must prove that loss and do so with evidence which makes it possible for the court to determine the value of that loss with fair amount of certainty." 13.9 Further, in Continental Restaurant & Casino Limited v Arida Mercy Chulu 1111, the court stated that: "The basis of awarding damages is to vindicate the injury suffered by the plaintiff and no damages will be awarded if no proper evidence of medical nature is adduced." J.47 13.10 The above principles of law show that a claimant for any loss is required to prove that loss by leading evidence that firstly, proves that they have suffered a loss, and secondly, that the evidence proving the loss must be one that assists the court to determine or quantify the loss suffered. 13 .11 In casu, the evidence available to prove the loss was an equipment lease agreement which states the terms upon which the Tractor Loader Backhoe was leased to Siltek Limited. No evidence was led to confirm that the equipment was taken for operations and paid for by Siltek Limited between 20 th January, 2021 and 1 st March, 2021 when it was allegedly seized by the appellant. 13.12 In cross-examination at page 511 Volume 2 of the record of _ appeal, PWl responded that the Tractor Loader Backhoe was abandoned in the bush in Kalumbila. That they got the keys from a Village Headman. This lends credence to the contention that the equipment was not leased out. 13.13 On a balance of probability, we are of the view that there was insufficient documentary evidence to prove the loss in terms of payment of the daily rate for the lease agreement between the 1 st respondent and Siltek Limited. The 1 st J.48 respondent contended that the lease for the agreement of the earth moving equipment was hired at K8,000.00 per day and for a fixed duration. No evidence of proof of payment was adduced in respect of the alleged contract, aside from the Lease Agreement for the equipment. 13.14 On this basis, we find that the 1 st respondent failed to prove the loss and the value of the loss suffered to be entitled to its claim of Kl ,520,000.00 for the 190 days that it was alleged to have been put out of use of its equipment. We cannot fault the court below for dismissing the counterclaim in the said sum . 13 .15 The last issue in the cross-appeal to be determined is whether the court below ought to have awarded interest on the awarded sum of US$328,301.00 being in respect of the purchase price of the Agreement to Sell Personal Property. 13 .16 It is not in issue that the court below awarded the 1 st respondent the said sum which we have equally upheld. The court ordered that the amount found due to the appellant be offset from the sum of $328,301.00 which would form the basis of the judgment entered for the 1 st respondent and payable within 30 days of the assessment. J.49 13.17 The appellant contends that interest is applied on a quantified sum of money. Since the court below did not grant a quantifiable amount, interest could not have been awarded. 13 .18 It is trite that where a judgment or order is given for a sum of money, interest shall be paid. Our laws provide for payment of interest. See Order 36 Rule 8 of the High Court Rules, Chapter 27 of the Laws of Zambia and the cited case of Wishimanga v NIEC 171 supra where the Supreme Court stated that it is mandatory for the trial court to order payment of interest on the sum awarded in accordance with the law. In the cited case, the Supreme Court proceeded to order that interest be paid. 13.19 We therefore hold that the lower court erred by not awarding interest on the judgment sum of $328,301.00. We therefore award interest on the said sum of $328,301.00 at 2 % from the date of writ to date of assessment. 14.0 CONCLUSION 14.1 For avoidance of doubt, we reiterate that judgment is entered in favour of the appellant in respect of the loan outstanding to be assessed by the Registrar with interest J .50 earlier stated. The said sum found owing upon assessment • shall be offset from the sum of US$328,301.00. Any amount remaining outstanding after offsetting will be paid to the party remaining owed. The parties shall bear their own costs . .................... i ................... . M. J. Siavwapa JUDGE PRESIDENT F. M. Chishimba A. M. Banda-Bobo COURT OF APPEAL JUDGE COURT OF APPEAL JUDGE