Pandoliker and Sons Ltd and Ors v African Banking Corporation Ltd (T/A BANCABC) (Appeal 231 of 2013) [2015] ZMSC 181 (19 August 2015)

JI IN THE SUPREME COURT OF ZAMBIA HOLDEN AT LUSAKA Appeal No. 231/2013 SCZ/119/2O13 (Civil Jurisdiction) IN THE MATTER OF: AND IN THE MATTER OF: BETWEEN: ORDER 30 RULE 14 OF THE HIGH COURT RULE AND ORDER 88 RULE OF THE RULES OF THE SUPREME COURT OF ENGLAND 1999 EDITION. A LEGAL MORTGAGE OVER PLOT NO. 724, LUSAKA PANDOLIKER AND SONS LIMITED PEGANT ZAMBIA LIMITED ATUL PANDOLIKER THANKORBHAI CHAGANBHAI PANDOLIKER (The Administrator of the Estate of Pusbaden Thakorbhai Pandoiiker) AND 1st APPELLANT 2nd APPELLANT 3rd APPELLANT 4th APPELLANT AFRICAN BANKING COPRPORATION LIMITED (T/A BANCABC) RESPONDENT CORAM: Chibomba, Hamaundu and Malila, JJS on 4th February, 2015 and 19th August, 2015 For the Appellants: Mr. L. Kalaluka and Mr. K. Kaunda, Ellis & Co. For the Respondent: Mr. J. Banda, A. M. Wood 86 Co. JUDGMENT MALILA, JS, delivered the Judgment of the Court. Cases referred to: J2 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Nkata and Four Others v. Attorney-General (1966) Z. R. 124. Zambia Revenue Authority v. Independence Service Station, SCZ Appeal No. 51 of2004. Attorney-General v. Marcus Kapuba Achiume (1983) Z. R. 1. Mususu Kalenga Buildig Limited, Winnie Kalenga v. Richmans’s Money Lender Enterprises (1999) Z. R. 27. Buchman v. Attorney-General (1994) Z. R. 131. Nevers Sekwila Mumba v. Muhabi Lungu, SCZ Appeal No. 200 of 2014. Cheltenham & Glousecter BC v. Norgan (1996) IWLR 343. Michelo Special Georges Mwiinga and Another v. Zambia National Commercial Bank SCZ Judgment No. 51 of 2014. National Westminster Bank Pic v. Skelton and Another (1993) 1 ALL ER 242. Citibank Trust v. Ayivor and Another (1987) 3 ALL ER 24. Kanjala Hills Lodge Ltd. & Veronica Namakau Jayetileke v. Stanbic Bank (Z) Ltd SCZ Judgment No. 1 7 of 2012. Sithole v. State Lotteries Board (1995) ZR 106. Investrust Merchant Bank v. Lyvale Limited, SCZ Judgment No. 27 of2002. Other sources: 1. Black’s Law Dictionary 8th Edition page 949. 2. The Economist Dictionary of Business (2003) Profile Books at page 201. 3. Section 2 of the Judgments Acts, Chapter 81 of the Laws of Zambia. 4. Order 88/5/14 of the Rules of the Supreme Court, (White Book) 1999 edition. 5. Order 88 Rule 5(13) of the Rules of the Supreme Court (White Book) 1999 edition. 6. Fisher & Lighwoods Law of Mortgage 13th edition page 489. 7. Halsbury’s Laws of England, 4th edition Vol. 33, paragraph 715. As given in the lengthy affidavits before the lower court, the background facts and procedural history of this case are quite J3 involving. They suffer from the inclusion of avoidable detail. A summary of the facts is as follows. By originating summons dated 16th February, 2012, the plaintiff (now respondent in this appeal) commenced this action against the defendants (now appellants in this appeal), claiming payment of all sums due and owing under a loan facility secured by a mortgage, which sum stood at US$1,208,533.06 as at 1st February, 2012. The respondent also claimed foreclosure on, and delivery up of the mortgaged property to it. The supporting affidavit deposed to by the respondent’s credit administration manager, explained the background facts to the mortgage transaction and how the dispute with the appellants arose. The short of it was that the respondent did, by a banking facility letter dated 24th December, 2007, advance to the 1st appellant the sum of KI,600,000,000 (one billion six hundred million Kwacha (unrebased), with interest at 21 percent per annum. The property known as Plot 724, Lusaka was offered by the 1st appellant as security and a legal mortgage over the said property was duly executed in favour of the respondent. J4 In January, 2009, a further facility of US$1,350,000 was availed to the 1st defendant. For the latter facility, a further charge dated 12th February, 2009 in favour of the respondent was executed by the 1st appellant with two properties, namely Stand 829, Lusaka and Plot 724 Lusaka, being demised by the 1st appellant to secure the repayment of the said US$1,350,000 with interest at 14% per annum. It is apparent from the record that the appellants required the said loan facility for the further development of stand 829. Disbursement of the loan amount was to be made periodically upon request by the 1st respondent. Following the 1st appellant’s default on loan repayments, the respondent reached a decision to sell one of the mortgaged property under the further charge, being Plot 829 Lusaka at a consideration of US$800,000. This was done and the property was discharged accordingly. After applying the US$800,000, realized from the sale, the loan sum of US$1,350,000 was only reduced to US$870,148.55. Following further defaults by the appellants in repaying the outstanding loan amount, the respondent recommended that the appellants’ loan facility be restructured. Consequently, by a J5 banking facility letter of 28th September, 2011, the respondent offered the 1st appellant a banking facility in the sum of US$1,180,149, which was a consolidation of the balances on the KI,600,000,000 and US$1,300,000 facilities. Furthermore, the appellant’s loan was converted into an eight year United States Dollars denominated loan with payment of interest put at the annual rate of 12% per annum. This restructured facility was secured by a first legal mortgage dated 14th January, 2008 made between the 1st appellant and the respondent under which Plot 724 Lusaka was demised by the appellants to the respondent to secure the repayment of the principal sum of US$1,180,149. The facility was further secured by a company guarantee by the 2 nd appellant, a subordination of directors loans by the 3rd and 5th appellants and directors’ personal guarantees by the 3rd, 4th and 5th appellants and US$3,355 cash security. At the time of the commencement of these proceedings, the respondent gave the state of accounts between the parties as follows: (i) Amount advanced (ii) Main interest due (iii) Overdue Interest US$ 1,180,149.00 US$ 26,736.76 US$ 250.80 J6 (iv) Total amount due as of that date US$ 1,208,533.06 The respondent averred that despite repeated reminders, the appellants had failed, ignored or neglected to settle the said sum of money, hence the orders it sought from the lower court through the Originating Summons. The appellants opposed the respondent’s claim through two affidavits sworn on their behalf by Fred Lumbe and Emsley Malaya on 16th April, 2012 and 19th April, 2012 respectively. It was averred as regards Plot 724 that the 1st appellant had been up to date with its loan repayments until the respondent started defaulting in disbursing funds towards Stand No. 829 as per agreement. In relation to Stand No. 829, that the 1st appellant had informed the respondent that it did not need the US$1,350,000 at once and that the funds should be released to the 1st respondent on request as per construction requirements. The appellants particularized the delays complained of in the disbursement of the drawdowns which resulted, according to the appellants, in severe loss of business as a consequence of non­ use of Stand No. 829, in the sum of US$614,400. The appellants counterclaimed this sum from the respondent. The appellants J7 also claimed that the delayed release of the monies by the respondent resulted in the 1st appellant procuring building materials at higher prices than budgeted for, thereby increasing the appellant’s costs. The unbudgeted for expenditure was stated to be US$21,500. Furthermore, the appellant claimed that the 1st appellant was sued by a third party supplier of building materials (Triquet) for non-payment of K70,000,000 plus interest. This was also attributable to the respondent’s failure to disburse monies timely. Other complications, according to the appellants, resulting directly from the respondent’s defaults in disbursement of the loan amounts, were that the 1st appellant paid US$36,520 to Standard Chartered Bank; it spent its own resources amounting to US$879,215 towards construction works at Stand No. 829; had to redesign the ground floor of the said property and resubmit plans for purposes of planning permission when the respondent breached the agreement to occupy the ground floor of Stand No. 829 for its offices. This cost the 1st appellant US$6,364.00 of its own resources. Owing to all these factors, it was the appellants’ position that 1st appellant defaulted because it was applying rentals for Plot 724 to finance the development of Stand 829. J8 The appellants also claimed that the 1st appellant paid US$40,000 property transfer tax following the sale of a mortgaged property initiated by the respondent and that some payments made by the 1st appellant such as the US$7,800 paid as at 1st February, 2012 had not been taken into account. The second affidavit in opposition was substantially to the same intent. The sum total of the appellants’ averrements was that the respondent was not entitled to the reliefs sought. The respondent then filed in an affidavit in reply where it, in effect, gainsaid the contents of the two affidavits in opposition. After hearing the advocates for the parties, the learned High Court judge, in a curt decision delivered immediately after the hearing, was satisfied that this was a proper case in which to grant the reliefs sought. He, accordingly, entered judgment in favour of the respondent in the sum of US$1,208,533.06 as at 1st February, 2012 with interest at the agreed rate of minimum 1% of the respondent’s base rate from the date of the Originating Summons to the date of payment. He further ordered that the said sum plus interest be paid within sixty (60) days from the date of the order failing which the respondent would be at liberty J9 to repossess and sell the property known as Stand No. 724, Lusaka. The learned judge dismissed the appellants’ counter claim as not having been proved on the evidence before him. It is this brief judgment of the High Court that occasioned sufficient grievance to the appellants as to prompt them to launch the present appeal. Three grounds of appeal were formulated as follows: “(i) The court below erred when it dismissed the counter­ claims notwithstanding that the respondent did not dispute that its disbursement of drawdowns was erratic, the result of which the appellant used its own resources towards Stand 829, and could not use its said Stand 829 as intended, and as communicated to the respondent. (ii) The court below erred by ordering that the 1st applicant liquidates the sum of US$1,208,533.06 as at 1st February, 2012 disregarding the fact that the facilities herein were line of credit loans on which the borrower is liable only for the actual drawdowns. There is no evidence that the whole sum of US$1,208,533.06 was disbursed. (iii) Being line of credit loans the court erred by ordering that the applicants pay interest on the said sum of US$1,208,533.06 instead of the total sum disbursed.” At the hearing of this appeal, counsel for the parties indicated that they would place reliance on the heads of argument already filed. By way of clarification and emphasis, these were supplemented by oral submissions. J10 As regards ground one, the main point taken by the learned counsel for the appellants was that although the respondent had claimed the sum of US$1,208,533.06, the appellants had put up counter-claims totaling US$757,599.00 and K70,000.00 the basis of which were explained in the two affidavits in opposition to the Originating Summons. After adverting to the definition of the term ‘credit line’ in Black’s Law Dictionary 8th Edition page 949 and that in The Economist Dictionary of Business (2003) Profile Books at page 201, the learned counsel pointed out that in the present case, the loan monies were disbursed in drawdowns as and when requested by the appellants. He referred us to the various letters in the record of appeal in which the respondent was requested to disburse specified amounts. Payments were made by the respondent directly to suppliers specified by the appellants. The learned counsel also submitted that the fact that the drawdowns were erratic was the subject of a complaint letter by the 2nd appellant addressed to the respondent and that the respondent in its confidential resolution of the Board Committee acknowledged this fact. In the learned counsel’s submission, the respondent was guilty of two breaches: first, the erratic -Ill drawdowns made for building materials, and second, the repudiation of the agreement to take up the ground floor of Stand 829 from which 60 per centum of the rental income was to be realized. This unilateral repudiation necessitated the resubmission of building plans at an additional cost to the appellants. The non use of the stand resulted in huge financial losses to the appellants. The learned counsel also posited that the remaining drawdowns on the facility was never released forcing the 2nd appellant to sell Stand 829. It was counsel’s submission, therefore, that as the respondent well knew the purpose for which the appellants intended to put Stand 829 to, the respondent ought to have been making timely disbursements. Without citing any authority whatsoever, the learned counsel concluded his submissions on this, ground by boldly stating that the loss of business suffered by the appellants should accordingly be recoverable from the respondent. In response to the appellant’s arguments under ground one, Mr. Banda, learned counsel for the respondent, supported the decision of the learned High Court judge and dismissed the J12 counter-claim by the appellants as being destitute of merit. Counsel began his argument by identifying what the appellants relied upon as evidence in support of their counter-claim, namely (i) the banking facility letter of 24th December, 2007; (ii) the mortgage deed of 14th January, 2008; (iii) the banking facility letter of 30th January, 2009; and (iv) the further charge of 12th February, 2009. In Mr. Banda’s view, the appellants have apparently ignored the banking facility letter of 28th September, 2011 by which the appellants’ whole loan arrangement was restructured. With great panache, Mr. Banda submitted that the appellants were relying on irrelevant history since the respondent’s action in the lower court was founded on the banking facility letter of 28th September, 2011 as clearly indicated in the respondent’s affidavit in support of the Originating Summons dated 16th February, 2012. The learned counsel quoted clause 2 of the said facility letter as follows: “consolidation of existing facilities and conversion to an 8 year United States Dollars denominated loan.” According to Mr. Banda, by the aforesaid clause, all other existing facilities were consolidated into a US$ (United States Dollar) denominated loan facility. He further referred to clause 15 J13 of that letter which states that prior agreements would not be considered in as far as it provides that: “this facility, as of the signature thereof, represents the entire agreement between the company and the Bank and consequently cancels and supersedes any and all prior documents, agreements or understandings either oral or written, exchanged or delivered during negotiations leading to this facility.” We were also referred to clause 19 of the said banking facility letter which indicates, under the heading ‘drawdown’ that drawdowns are not applicable as this was a restructure of the existing facility. Mr. Banda argued that as a restructured facility, the drawdowns had already been made and the amounts stated in the banking facility letter were due and owing to the respondent. Further, that under the banking facility letter of 28th September, 2011, the facility was secured by way of a first legal mortgage over the commercial property on Stand No. 724, Freedom Way, Lusaka. It was Mr. Banda’s further submission that the appellants have belaboured in vain by setting out a history that is irrelevant for the current purposes, and in so doing, they have not J14 addressed any issues which were subject of these proceedings in the court below. The learned counsel submitted that the respondent, as mortgagee was entitled to possession of the mortgaged premises. He referred us to the explanation notes to Order 88/5/13 of the Rules of the Supreme Court, (White Book) 1999 edition for this submission. The learned counsel then quoted the authors of Fisher and Lightwoods Law of Mortgage, page 51, paragraph 29.3 that: “the existence of a counter claim, whether a mere counter-claim or a cross-claim for unliquidated damages, which if established would give rise to an equitable set offer, does not by itself defeat the mortgagees’ right to possession, even if it exceeds the amount of the mortgage debt.” More purposely, the learned counsel quoted the explanatory notes to Order 88/5/14 of the Rules of the Supreme Court (White Book) 1999 edition that: “because a mortgagee is entitled to possession of the mortgaged premises a counter-claim by the borrower for damages or a liquidated sum is no defence to the claim for possession.” The learned counsel made a short point that the facility letter of 28th September, 2011 superseded all previous J15 arrangements between the parties and, therefore, reference to any alleged defaults by the respondent under the previous arrangement, was inappropriate. Finally on this point, the learned counsel submitted that the appellants failed, in any case, to adduce evidence to support their counter-claim. Mr. Banda next took up the issue of default by a mortgagor. He made the point that the appellants have never denied that they were indebted to the respondent, and that they have defaulted in their obligations. We were referred to various documents in the record of appeal in which the appellants acknowledged that they were in default. Citing Fisher & Lighwoods Law of Mortgage 13th ed. page 489, Mr. Banda submitted that the mortgagee’s principal remedies where the mortgagor defaults is to recover the debt from the mortgagor personally or enforce the security. To the same intent counsel invoked Halsbury’s Laws of England, 4th edition Vol. 33, paragraph 715. In their submissions in reply, the learned counsel for the appellants denied that the appellants were relying on historical facts which had, in the circumstances, become irrelevant; that J16 the banking facility letter of 28th September, 2011 confirmed that what was afforded the appellants was a line of credit for the sum not exceeding US$1,180,149; that the words used in the facility letter connotes a ceiling on the appellants’ borrowing power. Citing the case of Cheltenham & Gloucester BC v. Norgan7 the learned counsel argued that although Order 88 Rule 5(13) of the Rules of the Supreme Court (White Book) 1999 edition entitle a mortgagor to take possession of the mortgaged property, a possession order can be suspended pending payment of arrears within a reasonable period. The learned counsel also argued that the respondent’s failure to prove the actual amount owing is confirmed by paragraph 4 of the respondent’s heads of argument which shows the amount owing as K2,420,732.79, which is different from what was endorsed in the Originating Summons. We have carefully considered the arguments of the parties under ground one. The real question, as we see it, is whether there was a misdirection on the part of the learned High Court judge when he dismissed the appellants’ counter-claim. J17 It is quite rightly common ground between the parties that a loan facility secured by a mortgage was contracted by the appellants and remained subsisting at the commencement of these proceedings in the lower court. It is equally beyond argument that there was default on the part of the appellants which would prima facie entitle the respondent, as mortgagee, to seek and obtain the orders it prayed for in the Originating Summons. The appellants’ defence to the respondent’s claim took the form of a counter-claim. It was simply that, but for the actions of the respondent itself, the default on the appellants’ part would never have arisen. In their affidavits filed in support of this position the appellants gave coherent and rational explanations as to how the default occurred, and more importantly, how that default was attributable to the respondent’s own actions or inaction. We must state that in this case, the respondent as applicant in the lower court, bore the burden of proof to establish that it was a mortgagee entitled to the orders sought. We are satisfied that on the affidavit evidence available, this burden was discharged. The appellants, by way of defence, put up a counter­ claim. The burden of proving that counter-claim lay squarely on J18 them. It is this burden which the learned judge in the court below found was not discharged to the requisite standard. In our view, ground one as framed, radiates a dispute of an evidentiary kind. We perceive the appellants’ complaint under this ground as one comprising a challenge of findings of fact and assessment of the evidence presented to the lower court. We have repeatedly asserted that as an appellate court, we are loath to overturn findings of fact except in every exceptional circumstances (See: Nkata and Four Others v. Attorney- General1, Zambia Revenue Authority v. Independence Service Station2, and Attorney-General v. Marcus Kapumba Achiume3). In the present case, save for a half-hearted reference in the appellants’ counsel’s submissions in reply to instances when interference with a trial court’s findings of fact would be justifiable, there has been no suggestion made to us that the judge’s treatment of the evidence before him was perverse or a misapprehension. J19 Perhaps more importantly, we believe this ground should turn on the issue raised by counsel for the respondent, that the basis of the respondent’s action in the court below was the relation of the parties, recreated as it were, by the banking facility letter of 28th September, 2011. The learned counsel for the appellants disagreed with the position taken by the respondent. They maintain that the facility letter of 28th September, 2011 does not contain any clause that absolves the respondent from any liability arising from, or incidental to, the consolidated facilities. We have scrupulously examined the banking facility letter of 28th September, 2011. The purpose of that letter as set out in clause 2 was to consolidate existing facilities and convert them to an eight-year United States Dollars denominated loan. Clause 15 which we quoted earlier on in this judgment when we considered the respondent’s counsel’s submission, states that the banking facility letter of 28th September, 2011 superseded all prior documents and agreements. Does this constitute a break from the obligations and breaches of the past arrangement? To the extent that by this facility letter, the loan arrangement between the parties was restructured, the letter J20 provided a nexus between the new arrangement and the old. The facility as originally arranged, however, ceases to exist in the original format. The old loan was clearly incorporated in the fresh arrangement. In our view, by deciding to restructure the loan facility through the banking facility letter of 28th September, 2011, the parties redefined their relationship so that reference to the old order had henceforth become impetinent. It is, therefore, not surprising that the affidavit in support of the Originating Summons in the court below showed that the legal mortgage rights that the respondent sought to enforce emanated and were referable to the banking facility letter of 28th September, 2011 (see paragraph 13 and 15). In this regard, we accept the submission by the learned counsel for the respondent that to the extent that the parties redefined their relationship through the new banking facility letter of 28th September, 2011, any defaults and breaches under the previous relationship could not be part of the new credit affair that started with the 28th September, 2011 banking facility letter. J21 Even assuming that the appellants had adduced sufficient evidence to show that their counter-claim was well founded, to raise as a defence, the perceived breaches of the respondent’s pre-restructured loan facility in an action premised on the post structured facility, would in our view, be anacronistic. At any rate, late disbursement of funds by a lender is not considered, without more, as a defence to an action by the lender to recover the debt; nor does the mere fact that the respondent has a counter-claim or a cross-claim defeat the mortgagor’s right to possession of the mortgaged property. In the case of Michelo Special Georges Mwiinga and Another v. Zambia National Commercial Bank8, we cited with approval the holding in the case of National Westminster Bank Pic v. Skelton and Another9 that a mortgagee’s right to possession of the mortgaged property cannot be defeated by a cross-claim, even if the cross­ claim exceeded the amount of the mortgage debt. In the same case, we made reference to the case of Citibank Trust v. Ayivor and Another10 in which Mervyn Davies stated as follows: “The next question that arises in this case is whether or not the existence of the counter-claim affects the right to possession. The cases show that the existence of the counter-claim does not affect that right. In Barclays Bank Pic v. Tennet (1984) CA 242 Slade LJ said: J22 .... and in my opinion, the Keller case (Samuel Keller (Holdings) Limited v. Martins Bank Ltd (1970) 3 ALL ER 950 makes it quite clear that the existence of the counter-claim cannot defeat the right to possession which the Bank enjoys as mortgage. Indeed, only recently in Mobil Oil Co. limited v. Rawlison .. .. which was brought to our attention, Nourse J specifically held that the existence of a counter-claim will not defeat the legal mortgagee’s right to possession where he established his indebtedness. The correctness of that decision does not appear to be in doubt as a matter of principle. ” In the case of Kanjala Hills Lodge Ltd. & Veronica Namakau Jayetileke v. Stanbic Bank (Z) Ltd11, we stated among other things that: “we note that the appellant raised the issue of late disbursement of funds and the issue of the redemption date .... Late release of funds is not a valid excuse for default or failurely to make timely repayments.” It is for these reasons that we are satisfied that ground one has no merit. Under ground two, the appellant impeaches the learned trial judge’s order that the 1st appellant liquidates the sum of US$1,208,533.06 as at 1st February, 2012. According to the appellant’s learned counsel, the court’s order overlooked the plain fact that the facility availed to the 1st appellant comprised a line of credit loans on which the borrower is liable only for the actual sums drawndown. In the present case, according to the learned J23 counsel, there was no evidence that the whole sum of US$1,208,533.06 was disbursed. The learned counsel argued that the respondent did not offer any defence to the appellants’ demonstrated position that the 1st appellant had to use its own resources towards the construction of Stand 829 due to the erratic disbursement of drawdowns by the respondent. The learned counsel then raised the issue of the absence of a certificate signed by the director of the respondent. Citing clause 11.2 of the loan facility letter of 28th September, 2011 to the effect that in the event of the bank taking any proceedings to recover any amount due to it, such amount shall be determined and proved by a certificate signed by any director of the bank. According to the learned counsel for the appellant, no such certificate was produced in the lower court by the respondent whose responsibility it was to prepare it. The lower court should, accordingly, never have entertained the claim and made the order that it made. For his part, the learned counsel for the respondent countered the argument of counsel for the appellants on this ground on a number of fronts. First, it was contended that this J 24 ground raised a new issue of the certificate which was never canvassed in the court below. On the strength of the decisions of this court in Mususu Kalenga Building Limited, Winnie Kalenga v. Richmans’s Money Lender’s Enterprises4, the learned counsel urged us to dismiss this ground of appeal. The second basis on which Mr. Banda spurned the appellants’ argument was that clause 10.2 states that a certificate of indebtedness would be prima facie evidence of the appellants’ indebtedness and was not the sole mode of proving the indebtedness. Therefore, the absence of such a certificate could not defeat the respondent’s claim which had otherwise been proved. In this particular case, the statement of account produced in the respondent’s affidavit supporting the Originating Summons, was one such method used to prove the appellants’ indebtedness. Furthermore, the learned counsel for the respondent adverted to clause 3.2 of the relevant banking facility letter which stated that nothing contained therein would preclude the bank from advancing a sum in excess of that referred to in clause 3.1 and recovering the same in the event of default. This, according to J25 Mr. Banda, plainly entitled the respondent to take the action that it did. He went further to quote clause 14.1 which dealt with severability of the provisions of the banking facility letter all in an effort to persuade us to accept his argument on this ground that the absence of a certificate of indebtedness was inconsequential to the respondent’s claim. In their brief rejoinder to the arguments by the learned counsel for the respondent under ground two, the appellants’ learned advocates maintained that there was no evidence that the judgment sum of US$1,208,535.06 had been disbursed to the appellant. Furthermore, clause 10.2 made it mandatory for the respondent to prepare a certificate of the amount owing. They cited the case of Sithole v. State Lotteries Board12 to support their argument that an appeal to this court is a re-hearing on the record and therefore, that the requirement for the certificate which is provided for in the facility letter produced in the record of appeal, was part of the matters this court should consider in the rehearing. We have considered the clashing arguments of counsel relative to ground two. We have no trepidation whatsoever to state J26 that this ground of appeal cannot succeed. While the respondent produced a statement of accounts in the lower court to support its claim that the sum of US$1,208,533.06 was owing from the appellants as of 1st February, 2012, the appellants merely allege that they did not receive the full amount stated in the statement of account. This, in our view, was not insufficient to rebut the evidence given by the respondent. As regards the failure by the respondent to prepare and produce a certificate signed by a director of the respondent in accordance with clause 11.2 of the banking facility letter, we cannot but agree with the submission of the learned counsel for the respondent. The issue of the certificate of indebtedness was raised as an afterthought by the appellants, redolent of hindsight. It was not canvassed in the court below. In the case of Buchman v. Attorney-General5, we guided that: “a matter not raised in the lower court cannot be raised in a higher Court as a ground of appeal.” This position has been consistently carried by this court in various case authorities including that of Mususu Kalenga Building Limited and Another v. Richman’s Money Lender’s J27 Enterprises4 which was alluded to by the learned counsel for the respondent. Giving justification for this position in the case of Nevers Sekwila Mumba v. Muhabi Lungu6, we stated thus: “The reason for this position, in our view, is that in an adversarial system of justice such as obtains in this country, it is generally considered fair to afford the opposing party an opportunity to respond to every issue raised. Furthermore, we are loath to reverse a lover court based on an issue that the trial Court has not ruled upon. This court will, however, affirm or overrule a trial court on any valid legal point presented by the record regardless of whether that point was considered or even rejected.” As the issue of the certificate was not raised in the lower Court, we are of the decided view that it cannot be raised here. In any case, we cannot accept the suggestion implicit in the submission that preparation of the certificate was a condition precedent to the commencement of the action by the mortgagee. In this respect, we are of the decided view that this ground of appeal is incompetent. Even assuming that the issue of the certificate could be argued, the ground of appeal could still not succeed for the reasons that Mr. Banda has given in his submissions, which we have summed up above and accept. Ground two accordingly fails. J28 Ground three impugns the lower court’s order that interest on the judgment sum be paid. According to the learned counsel for the appellants, interest could only be paid on the total sum disbursed. To support this ground, the learned counsel for the appellants adverted to the definition of the term interest in Black Law Dictionary 8th edition. They argued that since the facilities subject of these proceedings were lines of credit, interest should have been ordered payable only on the actual amounts disbursed to the 2nd appellant either in cash or in building materials; that the respondent failed to show the amount actually disbursed. In response to the arguments on this ground, the learned counsel for the respondent maintained that interest on the judgment sum was payable. We were referred to Section 2 of the Judgments Acts, Chapter 81 of the Laws of Zambia. Furthermore, the learned counsel referred us to clause 15 of the banking facility letter of 28th September, 2011 which states that the facility letter represented the entire agreement between the parties. He also referred to clause 3.2 which provides that nothing contained in the letter precluded the Bank from advancing a sum in excess of that referred to in clause 3.1 and J29 recovering the same in the event of default. Counsel submitted that the appellants failed to contradict the respondent’s evidence adduced in the court below that the sum of US$1,180,149 was due to the respondent from the appellants. We were beseeched to dismiss this ground of appeal. In their retort to the respondents’ arguments on this ground, the learned counsel for the appellants rehashed their argument that the respondent did not prove that the judgment sum had been disbursed and was accordingly unable to show the actual amount owed. It followed that interest on the unascertained amount was not payable. For this proposition the learned counsel relied on the case of Investrust Merchant Bank v. Lyvale Limited13 where it was stated that: “interest can only be charged on the actual amount utilized.” We have considered the arguments addressed to us under this ground of appeal. What is clear is to us is that this ground is integrally linked to the other grounds of appeal. We have already found that the holding of the lower court that the appellant’s indebtedness to the respondent had been proved and that there J30 was no evidence to support the counter-claim, was properly anchored. We have no reason to interfere with that holding. With this finding, it is obvious to us that interest on the sum found owing is payable. The learned judge in the court below cannot be faulted for making the order on interest in the manner that he did. We accept in this respect, the submissions of the learned counsel for the respondent. This ground is without merit and it is dismissed. The net result is that the whole appeal is bereft of merit and it fail accordingly. Costs shall abide the event, to be taxed in default of agreement. H. CHIBOMBA SUPREME COURT JUDGE E. M. HAMAUNDU SUPREME COURT JUDGE M. MALILA, $C SUPREME COURT JUDGE