Zambia National Building society v Big 5 Car Hire Zambia Ltd (SCZ Appeal 105 of 1997) [1999] ZMSC 71 (15 February 1999)

IN THE SUPREME COURT OF ZAMBIA SCZ APPEAL No.105 OF 1997 HOLDEN AT LUSAKA (CIVIL JURISDICTION) BETWEEN: ZAMBIA NATIONAL BUILDING SOCIETY APPELLANT AND BIG 5 CAR HIRE ZAMBIA LIMITED RESPONDENT Coram: Chai la, Chirwa and Muzyamba JJS 24th November 1998 and 15th February 1999 For the Appellant: E. B. Mwansa, E. B. M. Chambers For the Respondent: A. J. Nyangulu, Nyangulu and Company Muzyamba, J. S. delivered the judgment of the court. JUDGMENT This is an appeal against a refusal by the High Court to grant possession of the mortgaged property. The brief facts of this case are that the respondent borrowed K12,000,000-00 from the appellant to be repaid by monthly instalments of K341,416. The loan attracted interest at the rate of 34% per annum. As a security for the repayment of the loan the respondent mortgaged its property, plot 7422 Mumbwa Road, Lusaka and executed a mortgage Deed dated 13th September 1990. On 10th March 1994, the respondent's then Mortgages Manager, Mr. Kamoto wrote to the respondent as follows: "The Managing Director Big 5 Car Hire Zambia Limited P. O. Box 35317 LUSAKA. ATTENTION: MR. SODALA re: MORTGAGE ACCOUNT No.34916 PLOT No.7422 LUSAKA. We refer to the telephone conversation between the undersigned and Mr. Sodala when he requested for the redemption figure on this Account. The amount required to redeem the account is K90,924,867-14. The breakup of the figure is summarised as follows:- : J2 Ledger Card Balance at 31/01/94 K51,159,972-63 Less Interest rebate for 21 days @ 130% K 1,868,082-25 Balance Add 90 days interest @ 130% Arrears fines K51,291,890-38 K16,669,864-38 K 5,583,248-00 Penalty interest for Accounts K16,669,864-38 redeemed under 5 years (90 days) interest @ 130% Administration fee Provisional legal costs for 10,000-00 property under repossession 700,000-00 Total Redemption Figure <90,924,867-14 Yours faithfully ZAMBIA NATIONAL BUILDING SOCIETY.” Upon receipt of this letter and before 90 days expired, the respondent paid the appellant the sum of <73,271,214-44. There then followed some corres­ pondence between the parties in which the appellant was demanding for the balance of <16,669,864-38 and in which the respondent denied owing the amount. The learned trial Judge found, on the evidence before him, that the amount claimed represented 90 days interest at 130% and held that since the redemption amount was paid immediately the appellant was not entitled to this amount. It is against this holding that the appellant appealed to this court. There are three grounds of appeal namely that: 1. The Lower Court misdirected itself in law and fact to have held that in all avenues of Common sense it found itself difficult to appreciate the Plaintiff's claim for the balance of <16,669,364-33 as this was a rebatable 130% interest not payable within 90 days. 2. The Lower Court misdirected itself in law and fact to have held that there was no documentary evidence challenging the authority of DW1 (Mr. Paul Chabangu Kamoto) of what he did and even so it can not overspill to a Third Party (Defendant) since he had the apparent authority to do so. : J3 : 3. The Lower Court misdirected itself in law and fact to have held that dismissal of DW1 (Paul Chibangu Kamoto) is no claim that he acted without authority. It was argued by Mr. Mwansa that Mr. Kamoto had no authority to waive the 90 days interest. That only the Board of Directors of the appellant had such authority. To support his argument he referred us to the evidence of Mr. Mutuna. Mr. Nyangulu's response was simply that the amount claimed was not earned and therefore not due to the appellant. Further that whether or not Mr. Kamoto had authority to waive interest was not the concern of the respondent as it was a matter of internal management. We have considered the arguments and examined the evidence on record, in particular the appellant's letter to the respondent which is reproduced above. It is quite clear from this letter that the figure K16,669,864-38 appears twice. First as 90 days interest at the rate of 130% and second as a penalty for redeeming the mortgage under 5 years. Since the mortgage was redeemed immediately upon receipt of the letter the 90 days interest did not accrue or, to use Mr. Nyangulu's expression, was not earned and therefore not due. As regards the argument that Mr. Kamoto had no authority to waive the interest we have examined the mortgage Deed and have found no Clause on waiver or non-waiver of interest. The respondent was therefore entitled to rely on Mr. Kamoto's letter. Moreover, Mr. Kamoto being a Mortgages Manager the respondent was right to assume that he had ostensible authority to act as he did. For the foregoing reasons we would dismiss the appeal with costs to be taxed in default of agreement. M. S. CHAILA SUPREME COURT JUDGE D. K. CHIRWA SUPREME COURT JUDGE W. M. MUZYAMBA SUPREME COURT JUDGE