Investrust Bank PLC v Banda and Others (HPC 574 of 2013) [2014] ZMHC 92 (6 August 2014)

IN THE HIGH COURT FOR ZAMBIA AT THE COM M ERCIAL REGISTRY HOLDEN AT LUSAKA (Civil Jurisdiction) 2013/H PC/0574 In the m a t t e r of: And In the m a tt e r of: BETWEEN: O rd er 30 Rule 14 of the High Court Rules, Chapter 27 of the Law of Zambia and Order 88 Rule 1 of the Rules of the Supreme Court 1999 Edition A Third Party Mortgage Relating Subdivision A Farm 378a to Subdivision 362 of O 0 L J C o f > COURT JUDICIA S i - 8 INVESTRUST BANK PLC AND RONALD JOHN BANDA, ANNA K. B A N bfi / MUKANDILA BANDA AND MWAPE BAND^tiCSOOGTZ TRADING AS - R. J. BANDA ENTERPRISES RONALD JOHN BANDA ANNA K BANDA MUKANDILA BANDA MWAPE BANDA N O N C O M M E R C I A L RE GIST RY PPLICANT 1st RESPONDENT 2nd RESPONDENT 3rd RESPONDENT 4th RESPONDENT 5™ RESPONDENT BEFORE HON. MADAM JUSTICE PRISCA MATIMBA NYAMBE, SC AT LUSAKA IN CHAMBERS For the Applicant: Miss L Shula Isaachs & Partners For the Respondents: Mrs. Anna K. Banda - 3rd Respondent In Person Mr. Mwape Banda 5th Respondent In Person JUDGMENT List of authorities referred to: 1. Order 30 Rule 14 of the High Court Rules Cap 27 of the Laws of Zambia 2. Order 88 Rule 1 of the Rules of the Supreme Court of England 1999 Edition This is an application by the Applicant brought pursuant to Order 30 Rule 14 of the High Court Rules Cap 27 of the Laws of Zambia as read with Order 88 Rule 1 of the Rules of the Supreme Court of England 1999 Edition; seeking the following reliefs i. Payment of the sum of ZM W 119,188.58 due and owing from the 1st Respondent to the Applicant on account of a loan facility in the sum of ZMW 106,137.00 on the loan principal and interest obtained by the 1st Respondent from the Applicant and secured by an agreement dated 7th June, 2013 and also an overdraft facility in the sum of ZMW 13,051.58 obtained by the 1st Respondent; ii. As against the 2nd, 3rd, 4th and 5th Respondents jointly and severally as Guarantors pursuant to the Guarantee dated the 11th June 2013, an order that the 2nd, 3rd, 4th and 5th Respondents do forthwith pay to the Applicant the sum of ZMW 119, 188.58 due and owing to the Applicant plus interest thereon at facility rates by reason of the 1st Respondent’s Default in meeting its obligations to the Applicant; iii. An order that under and by virtue of the Agreement hereinafter mentioned and the Third Party Mortgage it is holding, the Applicant is entitled to be considered as being the Legal Mortgagee of the property described in the said Agreement namely Subdivision No. 632 of Subdivision A of Farm No. 387a, Lusaka (hereinafter the “mortgaged J2 property”) and to exercise all the powers of a Legal Mortgagee including the power of sale, foreclosure and possession; iv. An order of foreclosure or sale of the mortgaged property namely Subdivision No. 362 of Subdivision A of Farm No. 378a, Lusaka. v. Delivery by the 5th Respondent to the Applicant of possession of the mortgaged property; vi. Interest on all sums found due and owing from the Respondents to the Applicant; vii. Any other order that the Court may deem fit and just in the circumstances; and viii. Costs. The Applicant is claiming the sum of K 119,188.58 plus interest at 17.25% per annum in default, the Applicant wish to exercise its right of possession and/or Sale/Foreclosure of the Mortgaged Property being Stand No. 632 of Subdivision A of Farm No. 387a, Lusaka. J3 The application was supported by an affidavit sworn by one Essau Mtonga Head of Credit Controls in the employment of the Applicant. By a Facility Letter dated 6th June 2013, the Applicant approved a Loan Facility in the sum of K100,000.00 to the 1SI Respondent and entered into a Loan Agreement as evidenced by Exhibit “E M I” and “EM 2”, a copy of the Facility Letter and Loan Agreement respectively. The loan was secured by a Third Party Mortgage dated 11th June 2013 entered into between the Applicant and the 5th Respondent over Subdivision No. 362 of Subdivision A of Farm No. 378a, Lusaka which was duly registered by the Applicant as evidenced by Exhibits “EM 3” and “EM 4” the Third Party Mortgage and Certificate of Title respectively. Further security was provided by way of personal guarantees by the 2nd, 3rd, and 4rh and 5th Respondents as Partners in the 1st Respondent’s Firm as evidenced by Exhibit “EM 5”, a copy of the said Guarantees. The Respondents defaulted in their repayment obligations as evidenced by Exhibit “EM 6” and “EM 7”, copy of the Demand Letter and Notice of Default respectively. J4 The Applicant submitted that, the above shows that the Respondents have failed to settle their debt which as at 4th November, 2013 stood at ZMW 119,188.58 as evidenced by Exhibit “EM 8” the Statement of accounts herein. In the event the Applicant requested the Court to grant the reliefs as endorsed on the Originating Summons. At the hearing the 1st, 2nd, 4th Respondents did not appear either in person or by Counsel, but the 3rd and 5th Respondents did appear in person. Both admitted the claim. Miss Shula, submitted further that since the loan was advanced not a single repayment had been made to liquidate the loan and the Respondents lack the goodwill to liquidate their indebtedness. The Respondents did file an affidavit in opposition the sum total of which does not disclose or amount to any defence. From the totality of the evidence, it is clear that the Respondents do not dispute that they are indebted to the Applicant or that they are in default of their repayment obligations. They ought to have paid off the loan within twelve (12) months but failed to do so and as at the time of hearing they in fact J5 had not made a single repayment. In the event the Applicant’s application is granted as endorsed on the Writ. ORDER: - 1. I enter Judgment in favour of the Applicant in the sum of K 119,188.58 with interest as agreed. 2. That the Defendants do settle the Judgment Debt as above, within three (03) months from the date of this Judgment, in default the Applicant shall be at liberty to exercise its right of possession Foreclosure/Sale in respect of the Mortgaged Property being Subdivision No. 632 of Subdivision A of Farm No. 378a, Lusaka, without further Court Order. 3. Costs shall follow the Cause. Dated this Prisca M. Nyambe, SC JUDGE J6