Kabine Kasongo Sidime v Djana Sidime and Ors (APPEAL NO.100 OF 2024) [2024] ZMCA 313 (28 November 2024)

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO.100 OF 2024 HOLDEN AT KABWE (Civil Jurisdiction) BETWEEN: 2 8 NOV 2024 iv1L REGISTRY KABINE KASONGO SIDIME APPELLANT AND DJANA SIDIME RAMMY MUHAMMED KASONGO SIDIME RAMA INVESTMENT LIMITED WILLIAM NYIRENDA & COMPANY (FIRM) 1 ST RESPONDENT 2ND RESPONDENT 3RD RESPONDENT 4TH RESPONDENT CORAM: Chashi, Sichinga and Sharpe-Phiri, JJA ON: 15th October and 28th November 2024 For the Appellant: M. Chimbaila, Messrs Ituna Partners For the 2 nd, 3 rd and 4 th Respondents: W. B Nyirenda, SC and K. Mwiinga, Messrs William Nyirenda & Company JUDGMENT CHASHI JA, delivered the judgment of the Court. Cases referred to: 1. Dr Kenneth Kaunda v Central Chambers & Others - SCZ Appeal No. 23 7 of 2013 2. Nkhata & Others v The Attorney General ( 1966) ZR, 3. The Attorney General v Marcus Achiume ( 1983) ZR, 61 4. Wilson Masauso Zulu v Avondale Housing Project Limited -J2- (1982)ZR, 172 Rules referred to: 1. The Supreme Court Practice (White Book) 1999 Other Works referred to: 1. Odgers' Principles of Pleadings and Practice, 2:zna Edition, London, Stevens & Sons, 1981 1.0 INTRODUCTION 1. 1 This is an appeal against the Ruling of Honourable Mr Justice C. Chanda, High Court, delivered in chambers on 3 1st August 2023. 1.2 In the said Ruling, the learned Judge dismissed the Appellant's (who was the 1s t defendant and applicant in the court below) application for the now 4 th Respondent to render a full account of the purcha se price of the mining rights of the now 3 rd Respondent. 2.0 BACKGROUND 2 .1 The 1st Respondent, a s plaintiff in the court below commenced an action on 4 th August 2014 , against the Appellant (as 1st Defendant), 2 nd Responden t (a s 2 nd Defendant) and the 3 rd Respondent (a s 3 rd Defendant). I -J3- The 4 th Respondent was subsequently joined to the proceedings as the 4 th Defendant. 2.2 According to the writ of summons, the 1st Respondent was claiming the following reliefs: (i) An Order that the corporate veil of Rama Investments Limited be pierced for the purposes of distributing to the beneficiaries the estate of the late Ramazan Kosongo Sidime, which mainly comprises of the mining rights at plot 10 pit 3, which rights were transferred to Rama Investment Limited mainly for the purpose of depriving the plaintiff and other beneficiaries; (ii) An Order of the court setting aside the consent Order dated 4 th January 2012, in cause No. 201 O/HN/234; (iii) An Order for damages for fraud; (iv) Costs of and incidental to these proceedings; (v) Any other re lief the court may deem fit. C -J4- 2.3 This matter came before us earlier on another interlocutory appeal under cause No. CAZ Appeal No. 132 of 2019 and vide our Judgment dated 2 nd September 2020, wherein we set aside the ruling of the lower court and directed that it hears the application to account. 2.4 The initial application to account was made by the Appellant on 7 th May 2018, before the close of pleadings, pursuant to Order 43/2 of The Rules of The Supreme Court 1 (RSC). The Appellant sought an Order for the 4 th Respondent to render a full account of the purchase price of the mining rights of the 3 rd Respondent. The account was sought in the following terms: "3.1 State the agreed and actual price between RAMA INVESTMENT LIMITED AND TUBOMBESHE MINING COMPANY LIMITED; 3.2 The amount that Messrs William Nyirenda and Company have so far received as mandated by the consent Order signed herein on 11th May 2017; 3. 3 The manner in which the funds have been disbursed; ' -JS- 3.4 The names of the recipient of the funds, the dates when paid and the reasons for the payments; 3.5 That if Tubombeshe Mining Company Limited has failed to pay the purchase price, to explain the cause of the failure; 3.6 That the 2 nd Defendant discloses the money he has received or paid on his behalf by Messrs William Nyirenda and Company the funds received by the latter under the consent Order of 11 th May 2017 3. 7 That there be provision for costs." 2.5 According to the Appellant, the parties obtained a consent Order on 11 th May 201 7 , in which it was agreed that the mining rights held by the 3 rd Respondent, be sold to Tubombeshe Mining Company Limited (Tubombeshe) . That it was further agreed that the proceeds of the sale were to be paid to the 4 th Respondent as stakeholder for all the beneficiaries, including the 2 n d Respondent. It was pointed out that under the said consent Order, the 4 th Respondent was \ -J6- to hold payment until specific disbursements due to each member (beneficiary) was agreed. 2.6 In the affidavit in support, the Appellant deposed that prior to the settlement of the consent Order, the 3 rd Respondent had executed a sale and purchase of mining rights agreement, in which the 2 nd Respondent represented 50% interest, while t h e Appellant represented the other 50% interest on behalf of the other shareholders in the 3 rd Respondent. That the purchase price in the said sale and purchase agreement was set at USD2,700,000.00 2.7 Subsequently, the 4 th Respondent wrote to the Appellant informing him that it had received USD 200,000.00 and had already disbursed. 2.8 On 3 rd March 202 1, the 4 th Respondent filed into court, a Statement of Account on Oath and averred that the consent Order did not make reference to a specific amount. According to the 4 th Respondent, the mining rights were sold for USD250,000.00 , as per the sale agreement which it exhibited. That on 31 st August 201 7 , Tubombeshe transferred a sum of USD200,000.00 to -J7- the 4 th Respondent, with the full knowledge of the Appellant's advocates. 2. 9 Further according to the 4 th Respondent, out of the sum received, USD 110,000.00 was appropriated towards the 4 th Respondent's legal fees in the matter. USD 20,000.00 was paid to Messrs Muya and Company to settle the 3 rd Respondents legal fees, USD 10,000.00 to Kitwe Chambers and USD 10,000.00 to Messrs ECB Legal Practitioners, also as legal fees. USD 30,000.00 was sent to the 2 n d Respondent as per the consent Order, which was acknowledged by the 2 nd Defendant. 2 . 10 That following the disbursements, a protracted debate ensued, in which the Appellant alleged that monies in millions of dollars had been received by the Respondents, which led to a complaint being lodged before the Law Association of Zambia against the 4 th Respondent, which complaint was dismissed. 2.11 In its submissions before the court below, the 4 th Respondent submitted that, it did not breach any trust as it only received USD200,000.00 and distributed it according to the client's instructions, as detailed in its Statement of Account on Oath. 2.12 The Appellant in its submissions contended that, -JS- although there was no specific amount in the consent Order, the pnce of the m1n1ng rights was USD2,700,000 .00. That before execution of the consent Order, the 2 nd Respondent had received the sum of USD 700,000.00 from Tubombeshe, which monies were recovered from the amount due to the 3 rd Respondent. According to the Appellant the contract price of USD2,700,00.00 was only undervalued to USD 250,000.00 for purposes of tax evasion. 3.0 DECISION OF THE COURT BELOW 3 .1 After considering the application, arguments and submissions, the learned Judge formulated the issue for determination as follows : "Whether or not the applicant had made out a case to merit the equitable relief of an Order to account and whether or not the Respondent had fully accurately accounted for all the monies received." 3 .2 The learned Judge then referred to Order 43/2 RSC which provides as follows: -J9- "(1) The Court may, on an application made by summons at any stage of the proceedings in a cause or matter, direct any necessary accounts or inquiries to be taken or made; (2) Every direction for taking of an account or the making of an inquiry shall be numbered in the Judgment or Order, so that, as far as may be, each distinct account and inquiry may be designated by a number." 3.3 According to the learned Judge , the consent Order, which clothed the 4 th Respondent with a duty to receive the proceeds of sale was the basis of the issue at hand. That the Order clearly outlined what was to follow once the 4 th Respondent was in receipt of the proceeds. 3. 4 The learned Judge opined that the circumstances of the case were that a trust had been created. The learned Judge then went on to observe that the terms of the consent Order were definite and clear and that the same did not extend to the 4 th Respondent ascertaining the -JlO- actual purchase price and/ or pursuing the purchase price of the contract it was not a party to. 3.5 Based on the totality of the evidence, the learned Judge could not fault the 4 t h Respondent, for taking the amount of USD250,000.00, as the contract price. The learned Judge then went on to state as follows: "With the above sacred principle of contract law, coupled with the principle of privity of contract and the obligations imposed on the Respondent by the said consent Order, the applicant in this application is raising issues far and beyond the consent Order which are not tenable at law. It was not the duty of the Respondent to establish the true or correct purchase price arising from a contract they were not privy to." 3.6 It was the finding of the learned Judge th at the 4 th Respondent, h ad demonstrated that they received USD 200,000.00, which they have also shown how it was disbursed. The learned Judge was shocked by the Appellant's revelation and confession that the contract showing the purchase price of USD250,000.00 , was -Jl 1- merely for the purpose of tax evas10n as the full purchase price was USD2 ,700 ,000.00 3.7 According to the learned Judge, the remedy to account is an equitable remedy. That it is an immutable equitable principle that "he who comes to equity must come with clean hands. " That the Appellant's confession made the Appellant to approach the throne of equity with soiled hands and in that regard was not entitled to the equitable remedy. 3.8 Furthermore, the learned Judge was of the view that the Appellant had not received any other amount over and above the USD200 ,000 .00. That the application was born out of the Appellant's conjecture that the sale price was USD2,700 ,000.00 , which amount there is no evidence that it was ever received by the 4 th Respondent. The learned Judge was satisfied that the payment of legal fees was done in good faith as per clause 1 (c) of the consent Order which provided as follows: "(c) That the proceeds of the sale in the first instance be utilised in settling all the statutory debts, creditors and legal fees of the parties hereto with legal fees for -J12- the instant action and the sale taking precedent." 3. 9 The learn ed Judge ob served th a t in its submissions, th e Appellant h ad raised issu e that ther e was n o b ill render ed by the lawyers and cited the case of Dr Kenneth Kaunda v Central Chambers & Others 1 . The learned Judge was of the view that the Kaunda case was distinguish able as it related to a client/ lawyer relation ship as opposed to th e role th e 4 th Respondent played in this m a tter as defined by the consent Order. 3. 10 In dismis sing th e application , th e learn ed Judge con cluded a s follows: "Having considered the Statement of Account on Oath and all the relevant affidavit evidence, I am satisfied that the Respondent has rendered a full and accurate account of USD 200,000.00, received as proceeds of sale as per consent Order. There is no shred of evidence adduced that the Respondent received any other amounts over and above the sum of USD200, 000.00. Surprisingly, the applicant in his submissions has prayed for an -J13- 0rder to compel the Respondent to pay the full purchase price, which price has not been proved as having been paid ... It is the ref ore my finding that the Respondent only received the sum of USD 200, 000.00, which sum has been fully and accurately accounted for. The bank instructions to transfer the said disbursement has not been disproved or challenged in any way." 4 .0 THE APPEAL 4. 1 Dissatisfied with the Rulin g, the App ellant has appealed to this Cou rt fronting the following three grounds: (i) The learned Judge in the court be low misdirected himself in law and fact when he made a finding at Rl 6 of the ruling that the purchase price for the mining rights in Tubombeshe Mining Company Limited was USD250,000.00, despite there being evidence on record that the 4 th Respondent received more than the stated amount for distribution; -J14- (ii) The learned Judge in the court be low misdirected himself in law and fact when he made afinding that it was not the duty of the 4 th Respondent to ascertain the true and correct purchase price of the mining rights of Tubombeshe Mining Company Limited, because that extended beyond the obligations imposed on them by the consent Order dated 17th May 2017; (iii) The learned Judge in the court be low misdirected himself in law and fact when he made a finding that it was proper for the 4 th Respondent to pay for the legal fees to law firms on behalf of the beneficiaries despite there being no bills rendered. 5.0 ARGUMENTS IN SUPPORT 5.1 In arguing the first ground of appeal, the Appellant submitted that the original purchase price for the mining rights was USD2 ,700,000.00, which money has never been paid into the 3 rd Respondent's account or -Jl5- into any lawfully nominated account. That the amount of USD250,000 .00 mentioned in the purported sale and purchase of mining rights lacks authenticity as it was merely a facade meant to woodwink Zambia Revenue Authority to reduce the amount due on property transfer tax and as such was not the real purchase pnce . 5.2 The Appellant then went on to submit on many other issues which were not talking to the ground of appeal. 5.3 In respect of the second ground, the Appellant submitted that, the 4 th Respondent became a trustee to the Appellant and other family members , pursuant to clause 3 of the consent Order. That when the 4 th Respondent was given the responsibility to distribute the funds, they were under a duty to ascertain the true purchase price at the time. 5.4 It was further submitted that the learned Judge erred by limiting the duty of the 4 th Respondent and coming to the conclusion that their duty was merely to r eceive funds on behalf of the beneficiaries. That the 4 t h Respondent did not act honesty and conscientiously by -Jl6- not finding out the proper purchase price of the mining rights. 5.5 As regards the third ground, it was submitted that the 4 th Respondent has lamentably failed to exhibit any bill submitted to them to justify the payment of legal fees to the law firms. Reference in that respect was made to the Kaunda case. According to the Appellant, there was a serious misdirection by the learned Judge when he failed to consider the fact that legal fees can only be paid once a bill has been issued. 5.6 Relying on the case of Nkhata & Others v The Attorney General2 , it was contended that the Appellant has demonstrated that this is a proper case where this Court must interfere with findings of the court below. 6.0 4TH RESPONDENT'S ARGUMENTS 6.1 In opposing the appeal, the 4 th Respondent filed its heads of argument on 30th September 2024. In response to the first ground, it was submitted that in Zambia, the law proscribes against making appeals anchored on findings of facts only. That the Appellant has also not demonstrated that the ground of appeal is a point of law -Jl 7- in their arguments, and therefore making this ground untenable at law for being incompetent. 6.2 It was further submitted that the finding of fact was based on the evidence before the court. Relying on the case of The Attorney General v Marcus Achiume 3 , it was submitted that this is not a proper case to warrant disturbance as the finding was not perverse nor did it result from misapprehension of facts. 6.3 In the alternative, it was submitted that, should the court not dismiss this ground, the Appellant was complicit in deceiving Zambia Revenue Authority as regards taxes payable. That therefore the Appellant did not go to court seeking an equitable remedy of an Order to account with clean hands. That this ground should fail as the Appellant cannot be allowed to benefit from their own illegalities and or acts of fraud. 6.4 In response to the second ground, it was submitted that the consent Order prescribed duties and obligations of the 4 th Respondent. It was submitted that as argued in ground one, this ground is equally incompetent for being a ground purported to be an error of fact and should be dismissed. -JlS- 6.5 In the alternative, it was argued that the court below was on firm ground in its finding. According to the 4 th Respondent, at the time of entering into the consent Order, the mining rights subject of these proceedings were already bought and sold between the parties and monies already received. That therefore, under the consent Order, there was no obligation whatsoever to determine or probe on the exact purchase and/ or selling price which the parties had already agreed and monies received. 6.6 It was the 4 th Respondent's contention that once the consent Order was signed, the parties obligations were to be as put therein and nowhere in the said consent Order was the 4 th Respondent obliged to ascertain the true and correct purchase of the mining rights. 6.7 In response to the third ground, it was submitted that the court below was on firm ground when it made the observation and appropriately distinguished the holding in the Kaunda case. That the Kaunda case only applies to lawyer/ client r elationship, which was not th e case with the 4 th Respondent, in the circumstances. • -J19- 6.8 It was submitted that, the 4 th Respondent never at any one time acted in the capacity of lawyer/ client relationship, for the Kaunda case to apply. That the consent Order, from which the 4 th Respondent derived its powers to act never created the relationship of lawyer/ client, for the Kaunda case to apply. 7.0 ANALYSIS AND DECISION 7 . 1 All the three grounds of appeal are challenging the learned Judge's findings of fact. As held by the Supreme Court in the case of Wilson Masauso Zulu v Avondale Housing Project Limited4 and also the cases of Nkhata and Marcus Achiume , cited by the parties, the Appellate court will only interfere with findings of fact made by a trial court, if it is satisfied that the findings in question were either perverse or made in the absence of any relevant evidence or were based on misapprehension of facts. 7. 2 The first ground of appeal attacks the alleged learned Judge's finding of fact that the purchase price of the mining rights was USD250 ,000.00, when according to the Appellant, there was evidence on record that th e 4 th • -J20- Respondent received more than that amount for distribution. 7.3 With reference to a claim for an account, the learned authors of Odgers' Principles of Pleadings and Practice at page 49 states as follows: "If a rent collector, or a commercial traveller, or any other agent or trustee has received money on behalf of the plaintiff, he is what is called "an accounting party;" that is, he is bound within a reasonable time after demand to render an account of all monies received by him, showing how much he has paid over to the plaintiff and how much he still has in hand." 7.4 Order 43 / 4 ( 1) RSC, states as follows: "where an account has been ordered to be taken, the accounting party must make out his account and unless the court otherwise directs, verify it by an affidavit to which the account must be exhibited." 7.5 It is evident from the aforestated that the duty of an accounting party is to account for the monies he has received and how it has been disbursed. In the appeal -J2 1- before us, the record shows that, the 4 th Respondent as an accounting party, as shown by its Statement of Account on Oath, received the sum of USD200,000.00 and it tabulated how th e s ame was disbursed. 7 . 6 The Orders therefore which were bein g ask ed for by the Appellant su ch as: "3.1- State the agreed and actual price between Rama Investment Limited and Tubombeshe Mining Company Limited and 3 . 5 - That if Tubombeshe Mi ning Company Limited has failed to pay the purchase price, to explain the cause of the failure. " are contentious triable issues which do not fall under the ambit of Order 43/2 RSC . 7. 7 In any case, a perusal of the ruling of the court below, R16, page 20 of the record of appeal does not show that the learned Judge made any finding to the effect that the purchase price for the mining rights was USD 250,000.00. For clarity, this is what the learned Judge stated at page 20, line 35 of the record: "On t he totality of the evidence before me. I cannot fault t he Respondent for taking t he amount of -J22- USD250, 000 as the contract price of the mining rights as that was provided for in the contract of sale for which it was not privy to. The sale and purchase of mining rights agreement of 2 nd August 2016 between Rama Investment Limited and Tubombeshe Mining Limited showed that the amount involved was USD250,000.00 only and the Respondent took it as such." 7. 8 The af orestated is far from what is being alleged by the Appellant. This ground of appeal in my view is misplaced as it is based on the wrong apprehension of a finding of fact by the learned Judge. 7. 9 The second ground of appeal attacks the finding by the learned Judge that it was not the duty of the 4 th Respondent to ascertain the true and correct purchase price of the mining rights. This has been dealt with, under the first ground, where we have clearly stated what is needed of an accounting party. 7. 10 The third ground attacks the finding by the learned Judge that it was proper for the 4 th Respondent to pay legal fees to law firms on behalf of the beneficiaries, despite there being no bills rendered. I- • 7 .1 1 As earlier alluded to, the duty of the accounting party -J23- was to account on how the monies were disbursed. In this case, the 4 th Respondent produced evidence of the bank transfers to those law firms and the receipts which were given acknowledging receipt. The learned Judge in arriving at his findings took into consideration what was required of the 4 th Respondent in respect of the consent Order as well as the reliefs which were sought to account. We find no basis on which to fault the learned Judge. We also agree with th e Respondent that the Kaunda case was not applicable under the circumstances as there was no lawyer/ client relationship. 7 . 12 In view of the aforestated, there is no merit in all the th ree grounds of appeal. e appeal is the ref ore J. C SHI COURT OF APPEAL JUDGE . D . COURT C ~ HARPE-, H~ RI COURT OF APPEAL JUDGE