Zambia Industrial Commercial Bank v Coster Mwaba and Hearmes Mining and Trading Limited (APP NO. 88 OF 2022; CAZ/08/91/2022; SP007/2023) [2023] ZMCA 369 (26 May 2023)

IN THE COURT OF APPEAL FOR ZAMBIA HOLDEN AT LUSAKA (CIVIL JURISDICTION) SP007/2023 APP NO. 88 OF 2022 CAZ/08/91/2022 BETWEEN: ZAMBIA INDUSTRIAL COMMERCIAL BANK Appellant AND COSTER MWABA l.)Y>\. IC OF lAM Bi rAP~ ~ · ~ \ (~11~f;{ I ~ = ···· '~-'\\ Jn- 1st Respondent ~r HEARMES MINING AND\~~ 2nd Respondent Coram: Makungu, Ngulube and Sharpe-Phiri, JJA ~ ~":) 6 7 On 30 March 2023, 2 May 2023 and on 26 May 2023 For the Appellant: Mr B . C. Mutale, Ms. M. Mukuka and Ms T. Kasweshi of Messrs Ellis and Company For the 1s t Respondent: Mr. Coster Mwaba, in person For the 2 nd Respondent: No appearance RULING Sharpe-Phiri, JA, delivered the Ruling of the Court Legislation referred to: 1. The Court of Appeal Act, No. 7 of 2016 2. The Court of Appeal Rules, SI No. 65 of 2016 3. The Rules of the Supreme Court of England (White Book), 1999 Edition Cases referred to: 1. Bidvest Foods Zambia Ltd v CAA Import and Export Ltd, Appeal No. 56 of 2017, scz 2 . Jason Yumba and 22 Others v Luanshya Municipal Council, SCZ Appeal No. 5/2015 3. Bwalya Matafwali v Coates Brothers Zambia Limited, SCZ Appeal No. 005/ 2013 4. Antonio Ventriglia, Manuela Ventriglia v Eastern and Southern African Trade and Development Bank (201 OJ Vol. 1 ZR 486 RI 1.0 INTRODUCTION 1. 1 This motion was brought by the Respondents seeking leave to appeal to the Supreme Court against a judgment of this Court delivered on 15 February 2023 and for an Order for stay of execution of the said judgment. By that judgment, this Court set aside the Kitwe High Court's judgment which held in favour of the Respondents that the Appellant had not registered the mortgage, hence failing to prove its claim in the trial Court below. 1.2 The motion was brought on 1 March 2023 and made pursuant to the provisions of Section 13 of the Court of Appeal Act, (CAA) 1 as read with the provisions of Order XI of the Court of Appeal Rules, (CAR)2 and further pursuant Order 88 of the Rules of the Supreme Court of England, 1965 Edition. 3 1.3 The application was also supported by an affidavit sworn by the 1st Respondent, Coster Mwaba. 2.0 BACKGROUND 2.1 The brief background of the matter is that the Respondents were sued as Defendants in the Kitwe High Court for Zambia under cause number 2021/HKC/016. 2 .2 The suit commenced in the lower Court stemmed from loan facilities which the Respondents acquired from Intermarket R2 Bank some time in 2011. Due to operational challenges, the Appellant Bank took over some of the business of Intermarket Bank in 2018 including the Respondent's loan facility. 2.3 The Appellant then instituted a mortgage action against the Respondent by way of originating summons some time in 2021 seeking the following reliefs among others: a. Payment of all money due by the 1st and 2 nd Respondents to the Appellant under the respective covenants in the mortgage between the Plaintiff and the 1st and 2 nd Defendants, dated the 14th day of the Republic of Zambia and registered with good title in the Lands and Deeds Registry under Certificate of Title No. 54281 dated 23rd day of August 2001 in favour of the 1st Defendant. 2.4 It was deposed in the 1s t Respondent's affidavit in support of this application that the action in the Court below was opposed on the basis that the mortgage was in fact not registered within the time lines of the provisions of the law and was therefore null and void. The Respondents also added that the Appellant was only founded and took over some business of Intermarket Bank in 2018 . 2.5 The Kitwe High Court entered judgment on 24 January 2022 in favour of the Respondents. In the said judgment, the trial Court held at pages J 13 to J 14 as appears on pages 21 and 22 of the Record of the Notice of Motion as follows: R3 ( " ... For the above reasons, I am of the view that the Plaintiff has not adduced sufficient evidence to show that there was an existing charge on Stand No. 7270 Kitwe for K450,000, K250,000 and US$60,000 at the time the facility was obtained. It has already been noted that the mortgage was not registered s at 19th June 2018 and if at all, it was registered after and in 2019, as alleged by the 1st Defendant, that purported registration was out of time and without leave of Court, rendering it null and void. Further I have also noted that no evidence was offered by the Plaintiff to prove that the 1s t Respondent surrendered the title deeds to them, as alleged, to secure the initialfacility and or to support any finding of the creation of an equitable mortgage. In view of the findings above, I am not satisfied and find that the Plaintiff has not proved its case against the 1st and 2 nd Defendants on a balance of probabilities. I therefore find and hold that the Plaintiff has not proved its entitlement to the reliefs of foreclosure on Stand No. 7270 Kitwe an for an account of any monies owed to it by the 1st and 2 nd Defendants and I decline the Orders sought by the Plaintiff in its Originating Summons ... R4 2.6 Following the aforesaid judgment of the Kitwe High Court, the Appellant appealed to this Court and a judgment of this Court was rendered on 15th February 2023. In our judgment, the Court set aside the judgment of the Kitwe High Court which has now prompted the Respondents to bring this application for leave to appeal. 2.7 Excerpts of the Court of Appeal judgment of interest and relevance to this application are as reproduced below: At pages J25 and J26 which is shown at pages 145 and 146 of the Record of Notice of Motion. It was held that; " ... The 2 nd Respondent's statements of account numbers 01-12102004703 and 0l-12122004192 shown at pages 78 and 80 of the ROA reveal the accounts overdrawn by K639, 117. 79 and US$S0. 724. 97 respectively. As Counsel for the Appellant pointed out, this brings the total sum owed on all 3 overdrafts to Kl,504,214.27. In light of the foregoing evidence on record, we are at pains to come to terms with the fact the Judge made the findings of fact as she did. More particularly, her finding that there was no evidence of any charges existing to secure the facilities . ... As earlier highlighted, the evidence on record is unmistakable and confirms that the mortgage in relation to Stand No. 7270, Kitwe was registered at RS the Lands and Deeds Registry at Lusaka on 14 July 2011, two months after the Mortgage Deed was executed. A corresponding entry was also made on the same date in the memorials of the Certificate of Title No. 54281 in respect of the property. There is no evidence that this entry has been discharged. Despite the learned Judge finding at page 25 lines 7- 8 of her Judgment that the Mortgage Deed was the security for the initial facility of K450,000, she proceeded to find that there was no evidence before her to prove that the 1st Respondent surrendered this Certificate of Title to secure the initial facility. We are of the view that the finding of the Court in relation to Mortgage was incorrect ... " 2.8 We went on to also hold at Page J29 and 30 of our appeal judgement found at pages 149 to 150 of the Record of Notice of Motion as follows; "Given the above findings and holdings, we are of the firm view that this is a proper case in which we can interfere with findings of fact made by the trial Court. We find that on a proper examination of evidence before it, the trial Judge acting correctly, would not have arrived at the conclusion she made aforesaid. R6 CONCLUSION Having found as we have, we are of the view that there was sufficient evidence before the Court to prove that the 1st and 2 nd Respondents were indeed indebted to the Appellant. This appeal therefore succeeds. Given that the appeal is successful, we accordingly set aside the Judgment of the lower Court of 24 January 2022. In the interest of bringing finality to this matter, we make the following Orders in favour of the Appellant: i) Judgment is entered in favour of the Appellant for the sum of Kl,504,214. 77 being the balance of monies due and owing by the Respondents as at 11 November 2016 pursuant to the terms of the facilities of K450,000, K250,000 and US$60,000 respectively. ii) The Judgment debt shall attract contractual interest up to the date of full payment. iii) An order for possession and sale of the mortgaged property known as Stand 7270, Kitwe if the amounts due and owing are not settled within 90 days from date hereof... " 2.9 Being dissatisfied with our aforestated judgment, the Respondents now seek leave of this Court to appeal to the Supreme Court. They also seek an Order granting a stay of execution of our judgment pending the said appeal, if at all. R7 ' - . 2 .10 By the evidence of the intended memorandum of appeal exhibited in their affidavit in support of this motion, the Respondents intend to advance 3 grounds of appeal as follows: 1. That the Court below erred in law and fact by setting aside the Judgement of the High Court despite the confession by the Respondent that in fact the Mortgage was not registered in 2011. 2. By failure to register their mortgage in time, the purported mortgage of 14th July 2011 or any other alleged charge was null and void and no rights would be derived by the Respondent and no Judgment could be entered in their favour as pleaded. 3. The mortgage claim was not proved by the Respondent. 2 . 11 The Respondents further believe that the intended appeal will provide an opportunity for the Supreme Court to address the questions below: 1. What is sufficient proof in mortgage action for the guidance of mortgagors and mortgagees in a mortgage action and whether if there are disputes of facts, the matter should be determined in chambers or open Court. 2. Whether the Court would be right to substitute a pleading for an equitable mortgage where the Claimant has pleaded the case of a registered mortgage and whether where the deed is not registered the mortgagee has any reliefs. R8 j - 3. Where security given is a dwelling house, is it not amiable to more favourable condition than security which is a business location. 2.12 In response to the application before Court, the Appellant filed its affidavit in opposition 17 April 2023 sworn by Sangulukani Lwara, the Head of Credit in the Appellant Bank. 2 . 13 It is his belief that that the Respondents' application has not demonstrated any reason why they should be granted a Stay of execution. He further deposed that it was his belief that the Respondents did not file any heads of argument in response to the appeal. He added that the intended appeal does not raise any point of law of public importance nor does it demonstrate any prospects of success or any other compelling reason for leave to be granted to appeal to the apex Court. 3.0 THE NOTICE OF MOTION BEFORE COURT 3.1 The Notice of Motion filed by the Respondents is for leave to appeal to the Supreme Court against the judgment of this Court dated 15th February 2023 and for an Order for Stay of execution of same judgment. The Notice is premised on the ground that the intended appeal has reasonable prospects of success and raises matters of public interest and on the grounds set forth in the supporting affidavit. R9 4.0 ARGUMENTS IN SUPPORT OF MOTION 4.1 The Respondents' application was fortified by their heads of argument filed on 1 March 2023. The central argument was anchored on the provisions of Section 13(3) of the Court of Appeal Act and the principles established by the Supreme Court in the case of Bidvest Food Zambia Limited and 4 Others v CAA Import and Export1 . Section 13(3) aforesaid provides that: "The Court may grant leave to appeal where it considers that- (a) the appeal raises a point of law of public importance; (b) it is desirable and in the public interest that an appeal by the person convicted should be determined by the Supreme Court; (c) the appeal would have a reasonable prospect of success; or (d) there is some other compelling reason for the appeal to be heard." 4.2 The Respondents submitted that the questions that would arise from the intended appeal are general questions of public importance which would have a bearing on how mortgage actions are to be proven and how pleadings in such actions should be framed. RlO - . ' 4.3 The Respondents also argued in relation to the application for stay, that they were relying on the provisions of Order 88 / 5 / 9 of the Rules of the Supreme Court of England, 1965 Edition, which provides, in part, that: " .. . By statute however, where the property consists of or includes a dwelling house the Court now has power (a) to adjourn the proceedings, or (b) on giving judgment for possession to stay or suspend execution or to postpone the date for delivery of possession and may make any such adjournment, etc. subject to such conditions with regard to payment or remedying any default as the Court thinks fit. 4.4 The Respondents argued that the appeal in casu relates to a dwelling house for which the Court is empowered by the aforesaid provision to stay or suspend its orders in relation to such dwelling house, pending determination of the intended appeal, which they argued, was going to raise important questions for determination by the Supreme Court. 5.0 ARGUMENTS OPPOSING THE MOTION 5 .1 The Appellant's heads of argument opposing the motion were filed on 17 April 2023. In addressing the issue of stay, the Appellant argued that no real ground had been advanced by the Respondents on why a stay of execution should be granted. The Appellant relied on the provisions of both Section 13(4) of the Court of Appeal Act and Order X rule 5 of the Court of RI I Appeal Rules which provide that neither leave to appeal nor actual appeal, shall operate as a stay unless such relief is so granted by the High Court, quasi judicial body or this Court. 5.2 The Appellant argued further that the case of Bidvest Food Zambia Limited cited by the Respondents espouses principles which would in fact work to deny the Respondents leave to appeal. The Appellant argued that the Supreme Court in the aforesaid case elucidated the altered position on appeals to that Court following the establishment of the Court of Appeal. A portion of that judgment was recited which states that the purposes of Section 13 of the Court of Appeal Act is to enable this Court to filter out cases that are undeserving of the attention of the Supreme Court. The Appellant reiterated Lord Birmingham's statement as recited in the Bidvest case when he said that the benefits of finality of litigation when weighed against the infallibility of the human mind, should assume precedence at the highest level of litigation. This was echoed in the context of leave to appeal applications. 5.3 The Appellant in its arguments submitted that the intended appeal does not relate to the findings of law reached by this Court nor have the Respondents demonstrated how the findings of fact in the judgment of this Court can be said to be points of law. 5.4 The Appellant added that the question as to whether the action ought to have been heard in open Court or the ramifications of R12 a mortgage action where the security is a dwelling house did not arise in this Court and where therefore not subject of judicial determination. 5.5 The Appellant also submitted that the intended appeal does not satisfy the provisions of Section 13(3) of the Court of Appeal Act as the Respondent's apprehensions were not sufficiently weighty to justify an appeal to the Supreme Court as the prospects of success were merely fanciful. 5.6 The Appellant further argued that likelihood of the intended appeal being heard if it is to be allowed was very unlikely due to the defective nature of the intended memorandum of appeal. The Appellant submitted that the manner in which the intended memorandum of appeal had been framed was defective as it does not satisfy the provisions under Order X rule 9(2) of the Court of Appeal Rules which requires such grounds to be concise, without argument or narrative and clearly specifying the points of law or fact which are alleged to have been wrongly decided. The Appellant also placed reliance on the holdings in the cases of Jason Yumba and 22 Others v Luanshya Municipal Council2 and that of Bwalya Matafwali v Coates Brothers Zambia Limited3 . 5.7 The Appellant concluded its arguments by submitted that the notice before us revealed no compelling ground to justify the grant of leave to appeal nor did it have any issues which were R13 remotely weighty enough to justify the intervention of the Supreme Court. 6.0 HEARING OF THE NOTICE OF MOTION 6.1 The parties were heard on the motion filed by the Respondents on 2 May 2023. The 1s t Respondent appeared in person, the 2 n d Respondent was not present while the Appellant was represented by Mr B. C Mutale, Ms. M. Mukuka and Ms T. Kasweshi of Messrs Ellis and Company. 6.2 The parties' position was that they would rely on their respective heads of argument filed before Court and the Court reserved its Ruling on the motion, which it now renders herein. 7.0 DECISION OF THIS COURT 7 .1 We have carefully considered the motion and the submissions of the parties in this matter. There are two broad considerations to determining the motion before us. The first issue will be to deliberate and consider if the Notice of Motion has raised valid grounds for grant of leave to appeal to the Supreme Court. Following determination of the foregoing issue , the second issue will address the application for stay of execution of judgment. 7.2 The contention of the Appellant is that the Notice of Motion does not meet the threshold provided under Section 13(3) Court of Appeal Act for grant of leave to appeal. R14 7.3 The relevant provisions of Section 13(3) Court of Appeal Act which provides the basis upon which leave to appeal applications maybe granted provides as follows: 'The Court may grant leave to appeal where it considers that- (a) The appeal raises a point of law of public importance; (b) ... (c) The appeal would have a reasonable prospect of success; and (d)There is ~ome other compelling reason for the appeal to be heard." 7.4 The contention of the Respondents is that leave to appeal to the Supreme Court should be granted on the basis that the intended appeal has reasonable prospects of success and that that it a lso raises matters of public importance. The intended grounds of appeal which have been cast above are recast here below for convenience, as follows: 1. That the Court below erred in law and fact by setting aside the Judgement of the High Court despite the confession by the Respondent that in fact the Mortgage was not registered in 2011. 2. By failure to register their mortgage in time, the purported mortgage of 14th July 2011 or any other alleged charge was null and void and no rights would R15 be derived by the Respondent and no Judgment could be entered in their favour as pleaded. 3. The mortgage claim was not proved by the Respondent. 7. 5 By these purported intended grounds of appeal, the Respondents contend that the intended appeal will provide an opportunity for the Supreme Court to address the questions below: 1. What is sufficient proof in mortgage action for the guidance of mortgagors and mortgagees in a mortgage action and whether if there are disputes of facts, the matter should be determined in chambers or open Court. 2. Whether the Court would be right to substitute a pleading for an equitable mortgage where the Claimant has pleaded the case of a registered mortgage and whether where the deed is not registered the mortgagee has any re liefs. 3. Where security given is a dwelling house, is it not amiable to more favourable condition than it security which is a business location. 7.6 Further, a review of our judgment, particularly paragraphs 8.9 to 8.12 at pages J21 to J22 thereof show that it was determined that the Applicant executed a mortgage deed with Intermarket Banking Corporation (Zambia) Limited, which has been taken over by the Appellant, on 14 May 20 11. The evidence was not contended, the mortgage of K450 ,000 had been secured with a Rl6 \.. I • I charge over the subject property and the memorials in the certificate of title number 54281 for the subject property showed that the said mortgage had been endorsed on the said title as registration number 7270 /7. Having recast our findings in our judgment at appeal of the main matter in relation to the intended grounds of appeal, it is difficult to see how the Respondents are likely to succeed on appeal if leave should be granted. 7.7 Furthermore, it is difficult to comprehend and appreciate how the purported important questions of law will be addressed by the Supreme Court given that there were no considerations of the said issues in this Court or the High Court. The Respondent has at no point raised issues in this court by way of cross appeal or in their heads of argument nor in the Court below on the threshold for proving mortgage actions, manner of hearing mortgage actions, considerations to be taken where a charged property is a dwelling house and substitution of pleading for equitable mortgage where the initial pleading was founded on a registered mortgage. 7.8 A review of the record shows that that the issues the Applicant is attempting to raise in the intended appeal were never subject of consideration in this Court or the High Court. In the case of Antonio Ventriglia, Manuela Ventriglia v Eastern and Southern African Trade and Development Bank4 , the Supreme Court explained such a scenario in the following words: R17 "We agree that, that principle of law has been laid down in a plethora of authorities by this Court that in order not to ambush the other party, only issues that were pleaded and raised in t he Court below can be raised in this Court as this is a Court or record. Only in very exceptional cases is this Court obliged to receive fresh evidence. But that statement on issues not raised before the lower Court is not cast iron. We have held that issues which were not pleaded but which were nevertheless raised i n the Court below, without any objection from the other side, cannot be ignored and the Court has an obligat ion to consider such issues." 7 . 9 It is clear that the circumstances of this case do not constitute an exception envisaged in the aforesaid case upon which the Suprem e Cour t can entertain consideration of fresh issues not raised in this Court nor the High Court. 7 .10 Having determined as we have, we find no basis for grant of leave to appeal to the Supreme Court. Consequently, the application for stay of judgment is a lso unsuccessful. 8.0 CONCLUSION 8.1 For the foregoing reasons, the Respondents' application for leave to appeal to the Supreme Court for Zambia and for stay of execution of our judgment is u nsuccessful. Rl8 ' ' 8 .2 We award costs to the Appellant to be paid forthwith by agreement and in defa ult to b e taxed. C. K. Makungu COURT OF APPEAL JUDGE P. C. M. Ngulube COURT OF APPEAL JUDGE ~ cou::: APPEAL JUDGE arpe-Phift R1 9