Wankumbwa Suppliers and General Contractors Limited v Mabiza Resources Limited (2020/HKC/018) [2020] ZMHC 393 (7 September 2020)

, IN THE HIGH COURT FOR ZAMBIA 2020/HKC/018 AT THE COMMERCIAL REGISTRY HOLDEN AT KITWE (Civil Jurisdiction) BETWEEN: WANKUMBWA SUPPLIERS AND GENERAL CONTRACTORS LIMITED . .,.-~"-·~-~~-,- .. PLAINTIFF .,. ... ,:~··. ,> AND Before: Justice Abha N. Patel, SC. On 7th September, 2020 For the Plaintiff : Mr. E. Chibeluka of Messrs Douglas & Partners (I For the Defendant : Mr. M. Nalishowa of Messrs Mulenga Mundashi LP JUDGMENT ON ADMISSION Rules of Court and Statutes (i) Order 27 Rule 3 of the rules of the supreme Court of England 1965, contained in the White Book, 1999 Edition. (ii) Order 21 rule 5 and6 of the 1-figh Court Rules Cap 27 of the Laws of Zambia. (iii) Order LIII of the High Court {Amendment) Rules S. I No.27 of 2012. (iv) Order llI rule 2 of the High Court Rules Cap 27. Case Law (i) China Henan International Economic Trade Cooperation vsMwange Contractors Limited (SCZ Judgment No. 7 of2002); (ii) Chazya Silwamba vs Lamba Simpito(2010) vol 1 Z. R at 475; (iii) A. J. Trading Company limited v Chilombo (1973) Z. R 55; (iv) Finance Bank Zambia Plc vs Lamasat International limited Appeal No. 175/2017 and Appeal No. 27/2018; (v) China Copper Mines Limited vs Tikumbe Mining Limited Appeal No.17 of 2017; (vi) Himani Alloys Limited vs Tata Steel Limited (2011) 3,Civil Court Cases 721; (vii) Freshview Cinemas Limited vs Manda Hill limited Appeal No. 174/2013; (viii) Zega Limited vs Zambezi Airlines Ltd & Diamond Insurance Limited Appeal No. 39/2014; (ix) Foveros Mining Limited vs Bell Equipment Zambia Limited CAZ Appeal No. 115/2018; (x) Silwamba v Simpito (2010) 1 ZR 475 Other Works (i) Matibini, on Zambian Civil Procedure: Commentary and Cases 1. Introduction 1. 1. In an actionfiled on 11 th March 2020, for an outstanding debt, the Plaintiff seeks the following: -J2- , I 1. an Order for the payment of the sum of USO 103,228.40 being moneys due on Invoices for services renderedto the Defendant upon the Defendants own request. 11. Interest on the outstanding amount 111. Further or Other relief and costs 1.2. The Defendant filed a Conditional Memorandum of Appearance on 16th April 2020 andthereafter caused to be filed is Defence and Counterclaim on 6 th May 2020, prompting the Court,in view of the Judiciary (Coronavirus) , May 2020 Guidelines,to proceed with a Scheduling conference and issue Special Orders for Directions dated 4 th June 2020. 1.3. The Plaintiff filed an application on 12th June 2020, by Summons for entry of Judgment on Admission, the subject of this Ruling, supported by an Affidavit in Support and Skeleton Arguments andList of Authorities. 1.4. On 21 st July 2020 when the application was scheduled for hearing, the Defendant had not been able to file its process in opposition and the hearing was adjourned on pain of hearing fees and the Plaintiffs costs, both payable before the Defendant was allowed to file its process. 1.5. It was further agreed by the Parties and the Court directed that the Plaintiff be at liberty to file its Reply, if any, by or -J3- before 28th July 2020 and that the Court would proceed to deliver a Ruling on the matter. 1.6. The Defendant did file its Skeleton Arguments and Affidavit in Opposition on 21st July 2020 and the Plaintiff filed its Skeleton Arguments in Reply on 27thJuly 2020. 1.7. I have reflected deeply on the Affidavits on record, and the submissions in the Skeleton Arguments filed by both Parties, and all of which I havepainstakingly considered. I thank Counsel for their industry. 2.0 Application for Judgment on Admission 2 . 1 The factsas pleaded by the Plaintiff According to the affidavit in support of this application, the deponent, one Peter Nkumbwa avers that the Plaintiff was contracted by the Defendant by way of Purchase Order marked and exhibited as 'PNl' to his said Affidavit to rehabilitate the Toro Loader, and Drill Rigs, which were duly reh a bilitated and delivered under Delivery Notes exhibited and marked 'PN2' and 'PN3'. 2.2 It was his averment that the Plaintiff did issue Invoices exhibited and marked 'PN4' and 'PNS' which were sent to the Defendant. He also referred to exhibits marked 'PN6' and 'PN7' being correspondence from the Defendant proposing a payment plan, albeit in instalments. -J4- 2 .3 He has exhibited documents marked 'PNS' and 'PN9' being the proposed draft consent Order from the Defendant and a the Plaintiff's Lawyer counter copy of the letter from proposing the terms of payment dated 21st April 2020 and 24th April 2020 respectively. 2.4 It is the Plaintiffs further submission that the machines having been rehabilitated and repaired in 2019, and there being no complaint of the services rendered, the only correspondence related to payment of the outstanding sum. 2.5 The Plaintiff has also submitted that paragraph 8 of the Defence 1s a clear and unequivocal admission that the Plaintiff 1s entitled to the sum of USD68,700.00 as the amount outstanding for work delivered by the Plaintiff. It is therefore the Plaintiffs submission that based on the holding of the Court of Appeal in the case of Finance Bank Zambia Pie vs Lamasat International Limited, this is a proper case for the Court to enter Judgment on Admission. 3 . The facts as pleaded by the Defendant 3.1 The defendant has opposed the application through theAffidavit of oneAnton Mauveand has placed reliance on their Skeleton arguments in opposition, both filed on 21st July 2020. They have submitted that the Plaintiff is misguided in its application and has wrongly assumed the Defendants admission to the Plaintiffs claim. -JS- r 3.2 The Defendant has submitted that while this Court is endowed with the discretion to enter Judgment on admission, under the enabling provisions of the cited law, the same discretion equally extends to refusing to enter Judgment on admission. They have cited the case ofFinance Bank Zambia Pie vs Lamasat International Limited wherein the Court of Appeal stated: "This power is exercised in only plain cases where the admission is clear and unequivocal. There is a plethora of decisions on the admissions and entry of Judgment. An admission has to be plain and obvious, on the face ofit without requiring a magnifying glass to ascertain its meaning." 3 .3 The Defendant has also cited the case of China Copper Mines Limited vs Tikumbe Mining Limited wherein the Court of Appeal cited with approval the holding in the Indian case of Himani Alloys Limited vs Tata Steel Limitedon the issue of the admissions being a discretionary remedy and the requirement that the admission should be unequivocal, when it stated as follows: "It should be a conscious and deliberate act of the party making it, showing an intention to be bound by it. The Court on examination of facts and circumstances has to exercise its judicial discretion keeping in mind that a Judgment on Admission is a Judgment without trial which permanently denies any remedy to the defendant, by way of a trial on merits. Therefore unless an -J6- admission is clear, unambiguous and unconditional, the discretion of the Court should not be exercised to deny the valuable right of a defendant to contest the claim. In short, the discretion should be used only when there is a clear admission which can be acted upon." 3.4 The Defendant has averred in its Affidavit in Opposition, that not being satisfied with the services rendered by the Plaintiff, it engaged Messrs Price Waterhouse Coopers (PWC) to undertake a forensic enquiry and report on the correctness of the Plaintiffs claim, and which enquiry did make findings, that at the date of preparation of the Forensic Report, that all three heavy pieces of equipment allegedly rehabilitated by the Plaintiff had infact broken down. A copy of the said Report from Messrs PWC was exhibited and marked 'AM2'. 3 .5 The Defendant has also averred that correspondence passing between the Parties and their Advocates was onawithout prejudice basis and referred to the exhibit marked 'AMl' being a letter from the Plaintiffs Advocate dated 24th April 2020 which confirmed that the proposals were made on a without prejudice basis. ( the same letter is exhibited and marked 'PN9' to the Plaintiffs Affidavit in Support). 3.6 The Defendant has also cited the case of A. J. Trading Company limited v Chilombo (1973) Z. R 55 where -J7- The Court held that: "an admission by the Defendant of an allegation in the Plaintiffs Statement of Claim means there is no issues between the parties on that point and no further evidence is admissible in reference to that point." Where as in casu, it is the Defendant's contention that it did engage MessrsPWC to undertake a forensic audit on the transaction between the Plaintiff and the Defendant and which report did reveal a number of anomalies regarding the transaction, thereby supporting their submission that admissions if any, were not unequivocal and that the Court needs to further interrogate those issues. 4. The Law 4.1 In terms of legal arguments, the Plaintiff cited Order XXI., Rule swhich reads as follows: "A party may apply, on motion or summons, for judgment on admissions where admissions of facts or part of a case are made by a party to the cause or matter either by his pleadings or otherwise.» The Plaintiff also referred to Order XXl, rule 6to support its application for the Court to enter Judgment on Admission of facts made by a Party either by his pleadings or otherwise. In the case incasu, it is submitted that the admission by the Defendant is both -J8- from the Pleadingsand from the correspondence between the Plaintiff and the Defendant. 4.2 The Plaintiff also sought refuge in Order 27., Rule 3 of the Supreme Court Rules which gives the Court power to enter judgment upon any admission of fact or of part of a case made by a party to a cause either by his pleadings or otherwise, without waiting for the determination of any other question between the parties. 4 .3 The object of Order XXI of the High Court Rules and Order 27 rule 3 of the Rules of The Supreme Court, is to enable a party to obtain speedy judgement where the other party has made a plain admission entitling the former to succeed. It is important to note that the function of an admission is to ensure that the Courts time at trial is not wasted and delay is avoided. It is trite tha t a defence must not be evasive, nor must it be superficial. This was the guidance by Hon Dr. P. Matibini, as he then was, in the case of Silwamba v Simpito. 4.4 The gist of the plaintiffs' argument is that the defendant by its pleadings, specifically the defence, has admitted the plaintiffs' claim. Additionally, that the exchange of correspondence referred to and quoted in paragraphs 2.2 and 2 .3 above, in which the debt is -J9- , acknowledged, and a payment plan proposed, constitutes an admission in writing. 5. The Issue for determination The issue for my determination is crystal clear and simply put: has the Defendant admitted the Plaintiffs claim in such clear and unequivocal terms, that mandates this Court to exercise its discretion and enter Judgment on Admission in favour of the Plaintiff7 Conversely stated, has the Defendant shown that the Court should not exercise its discretion, to deny the valuable right of the defendant to contest the claim. 5.2 The Court has considered the authorities cited by the Parties and in addition it has also relied on the decision of the Supreme Court in the case of China Henan where the Court stated as follows: "The new dispensation in commercial matters is that Parties must place their cards on the table early in the litigation to assist in narrowing issues of contention and for the real issues in the dispute to surface. It is not prudent for a party to wait for trial before exposing their side of the story ... in keeping with the Practice Directions, where a defence in a commercial matter does not satisfy the requirements of rule 2, the court is entitled to enter Judgment on Admission in an appropriate case." -JlO- , 6. Analysis of the Law and Facts 6.1 I have meticulously perused the affidavit evidence and note the categoric and unequivocal acknowledgment of the debt by the Defendant. I also note the exhibits marked 'PNl' being the Purchase Order from the Defendant dated 19th November 2018 and signed by one Lemmy Nyirenda on 30th November 2018. 'PN2', 'PN4'and 'PNS'is the Delivery Note and Tax Invoice No. 160 and 165 dated 1st February 2019 and 2 nd February 2019 and 19th June 2019respectively. 6 .2 I note further that 'PN6' is a proposal dated 13th March 2020, from the Defendant,_ to the Plaintiff, and which reads as follows: "Dear Peter, Thanks for your email. Sorry we have not kept up to date with the current invoices despite you being in agreement with payment plan . ...... . As funds have been received, I would propose that Mabiza brings the arrears up to date as soon as possible. I will let you know when the initial payment as per plan as detailed below is to be made: Initial payment of • 5%- $5, 161.42 • 10% of the balance in July month- $9,806.70 -Jll- Thank you for your patience and for your continued support for Mabiza. If you have any queries please do not hesitate to contact me. Akash Thawani Senior Administrator Benedict Mackenzie Business Rescue and Insolvency" 6.3 A follow-on mail is dated 6 th April 2020issued by the f\ same business unit for the Defendant apologising for --- the delay, confirming funds from the Investors and promising to pay the 5% within the next 14 days. 6.4 It is a fact of simple calculation verified by the Court that 5% of the Plaintiffs claim (in the sum of $103,228.40) is the sum of$ 5,161.42 and that 10% of the balance is the sum of $9,806. 70Fe the exact same / amounts being offered to the Plaintiff by the Defendant through its Business Rescue and Insolvency Team. Even if the Court were to exclude any reference to the correspondence passing between the lawyers, the above correspondence whichever way you look at it, is a clear and unequivocal admission of the Plaintiffs claim. The Court is also minded of the decision of the Court of Appeal in the case of Zega Limited v Zambezi Airlines Ltd & Diamond Insurance Limited on the need for the admission to be clear, unambiguous and unconditional. -J12- 6.5 In the words of the Court of Appeal, as cited by both Parties, in the Finance Bank Zambia Pie v Lamasat (Supra) case, I find that in casu, the "admission is plain and obvious, on the face of it without requiring a magnifying glass to ascertainits meaning." (the emphasis is by the Court). The Court will arrive at the same determination relying on the case of China Copper Mines (supra) to warrant the exercise of its judicial discretion in the face of a clear unequivocal admission. 6.6 I am fortified in this finding ably guided by the pronouncement of the Supreme Court as set out in the case of Fresh view Cinema's Limited vs Manda Hill Limited when it had occasion to consider a similar application under Order XXI of the HCR and Order 27 rule 3 of the RSC, and held that " ... what is paramount, in our view is that the express or implied admission is clear." 6. 7 I now turn to consider the impact, if any, of the Report exhibited as 'AM2' being the Report of Messrs PWC entitled "Mabiza Resources Limited Forensic Review of Select Transactions." I note that the Report is marked 'Draft', is dated 25th February 2020, and was apparently triggered and developed in accordance with an engagement dated 17th January 202d between the Defendant and Messrs PWC. -Jl3- ... , 2 6.7 To the extent that the Defendant may intend to rely on the said Report in support of its counter-claim, I will not dwell any further on the report, nor make any findings of fact on the said Report. That notwithstanding, and on the authority of the recent decision of the Court of Appeal in the case of Foveros Mining Limited vs Bell Equipment Zambia limited, the Court upheld the decision of the trial court when it held that the existence of a counter claim does not operate as bar to entering Judgment on Admission. To that extent, I am fortified in arriving at the finding that there is adequate clear and unequivocal admission made by the Defendant and that the defence raised by the Defendant, lacks merit and is an attempt at dragging litigation which has no merit, and which on the authority of the decision in the China Henan case, will not be entertained in this division. 6.8 I am satisfied that Judgment on admission may be entered andJhat this is a proper case for me to exercise my jurisdiction to enter judgment on admission pursuant to Order XX1 of the High Court Act and Order 27., Rule 3 of the Rules of the Supreme Court. 7. Conclusion In light of my being satisfied that there is clear admission by the defendant, Judgment on admission is entered against the defendant in the sum of United States Dollars One -J14- , a , • • Hundred and three Thousand Two Hundred and twenty Eight and forty (USD103,228.40) being moneys due for services rendered to the Defendant, and which were duly acknowledged as received. The Judgment debt shall attract interest at the average of the rate prescribed by LIBOR prevailing from the date of commencement of this action to the date of final settlement. Costs are awarded to the Plaintiff, to be taxedin the event of I\ default of agreement . Leave to appeal is granted . -JlS-