Zlatan Zlatco Arnautovic v Stanbic Bank Zambia Limited [2019] ZMCA 381 (26 July 2019)

IN THE COURT OF APPEAL OF ZAMBIA APPEAL NO. 130 OF 2018 HOLDEN AT KABWE (Civil Jurisdiction) (cid:9) BETWEEN: (cid:9) - c- ?--- / "r 2& 4.(j;j \ \ ZLATAN ZLATCO ARNAUTOVIC -- -'APPELLANT AND STANBIC BANK ZAMBIA LIMITED RESPONDENT CORAM: Chashi, Lengalenga and Siavwapa, JJA ON: 22nd May and 26th July 2019 For the Appellant: J. Madaika and S. Kalima (Ms.), Messrs J and MAdvocates For the Respondents: M M. Mundashi, SC and D. M. Chakoleka, Messrs Mulenga Mundashi Kasonde and Company JUDGMENT CHASHI, JA delivered the Judgment of the Court. Cases referred to: 1. Newplast Industries v The Commissioner of Lands and Attorney General (2002) ZR, 58 -I -) - 2. Finance Bank (Z) Limited v Sidik Valli Patel T/a Libala Stores and Judith Hamaluba - SCZ Appeal No. 40 of 2009 3. Khalid Mohamed v The Attorney General (1982) ZR, 40 4. Credit Africa Bank Limited (in Liquidation) v John Dingani Mudenda - SCZ Judgment No. 10 of 2003 S. Union Bank Zambia Limited v Southern Province Co- operative Marketing Union Limited (1995-1999) ZR, 207 6. Zambia Revenue Authority v T and G Transport - SCZ Judgment No. 2 of 2007 7. Philip Mhango v Dorothy Ngulube and Others (1983) ZR, 61 8. Wilson Masauso Zulu v Avondale Housing Project Limited (1982) ZR, 172 9. Sithole v The State Lotteries Board (1975) ZR, 106 10. Chuba v The People (1976) ZR, 272 Legislation referred to: 1. The High Court Act, Chapter 27 of the Laws of Zambia Rules referred to: 1. The Supreme Court Practice (White Book) 1999 2. Court of Appeal Rules, 2016 Other works referred to: 1. Odger's Principles of Pleadings and Practice, 22nd edition, Stevens and Sons Limited -J 3- The amended writ of summons at page 45 of the record of appeal (the record), shows that the Appellant who was the plaintiff in the court below, took out an action against the Respondent claiming the sum of K1,183,333,352.39 consisting of alleged unlawful penalty interest, unauthorised compound interest, unauthorised transfers and transaction charges. In addition, the Appellant sought damages and interest which he unilaterally quantified. According to the statement of claim, the claims are broken up as follows: (1) K470,829,827.42; the claim being that, between December 1996 and August 1997, the Appellant was made to pay the said amount in penalty interest on six accounts, which interest was unlawfully compounded. That this came about because of the Respondents failure to raise a charge on 44,978 bags of maize that the Appellant had surrendered to the Respondent for the 1995/1996 season. (2) K5,296,490.00, unauthorised bank transfer to two Respondent's employees. (3) K54,227,028.00, unauthorised money transfer to unknown accounts between 8th and 17th August 1995. (4) K59,523,518.00, unauthorised money transfer on 41h July -J 4- 1997 to an unknown account. (5) K250,656,744.89; claim being that on 15th August 1997, the Respondent without mandate closed the account of a limited company and transferred the debit balance to the Appellant which the Appellant paid. (6) K252,102.399.65, unauthorised compound interest over five years from 1995 to 1999 (7) K90,647,344.43, being over charged simple interest on eleven accounts. (8) K234,241,777.00 being unlawful and unauthorised transfer and transaction charges between June 1995 and 1998. The Appellant is also claiming Mora Interest on all the aforestated amounts. The amounts together with Mora Interest come to the total sum of K6,318,528,097.50 (unrebased) on which amount the Appellant is claiming further interest. In its defence, the Respondent averred that, it charged compound interest which was either contractual or acquiesced to by the Appellant. -J 5- Further that, it had been sending bank statements which set out various transactions on the Appellant's account, the accuracy and veracity of which were never questioned. The Respondent then counterclaimed as follows: (1) K1,097,2237335.42 as at 30th June 2000 and K880,431,747.00 as at 31st August 2001 being borrowings under loan facilities bringing the total sum to K1,997,655,082.42 (unrebased) plus interest. The Respondent further claims the sum of US$47,222.02 (2) A declaration that the Respondent is entitled to exercise its various powers and rights under various security instruments executed in favour of the Respondent and realisation of the same securities. According to the Respondent, after the commencement of the proceedings by the Appellant, the parties by way of an agreement dated 30th November 1999 agreed to engage a consultancy firm by the name of DCDM, to investigate all the claims which were raised by the Appellant. The parties further agreed to stay the court proceedings pending the outcome of the investigations. The idea was to try and see whether the issues raised could be resolved through the investigation report by DCDM. DCDM produced a finalization reconciliation report -J 6- as shown at page 154 of the record. The Appellant, however did not agree with the report as according to him, DCDM exceeded its mandate by rendering its opinion on issues, when it was only asked to make findings of fact. It was on that basis that the matter was restored to the active cause list. In his defence to the counterclaim, the Appellant made mere/bare denials. At the hearing of the matter, the Appellant gave evidence in pursuit of his claims, whilst the Respondent called one witness. At the end of the trial, both parties filed copious submissions. After considering the evidence and submissions, the learned Judge, Hon. Mr. Justice E. M. Hamaundu, High Court Judge, as he then was, after identifying the issues which needed to be resolved, addressed each of the heads of claims as listed in the statement of claim and dismissed all the claims by the Appellant, whilst upholding and granting the counterclaim. Dissatisfied with the Judgment, the Appellant has appealed to this Court advancing eleven grounds of appeal as follows: -J 7- 1. The learned trial Judge erred in law and fact when he, contrary to the evidence on record, dismissed the Plaintiff's entire case and upheld the Defendant's entire case. 2. The learned trial Judge erred in law and fact when he applied a different standard of proof to the Plaintiff's case as compared to the standard of proof he applied to the Defendant's case. 3. The learned trial Judge erred in law and fact when he held that there was an express agreement between the Plaintiff and the Defendant to charge compound interest. 4. The learned trial Judge erred in law and fact when he engaged in suppositions and inferences to explain the gaps in the Defendant's evidence and thereby arriving at perverse inferences which are not supported by the evidence on record. 5. The learned trial Judge erred in law and fact when he glossed over the failure by the Defendant to provide the necessary documents and account statements to support its claims. 6. The learned trial Judge erred in law and fact when he held that the Plaintiff retained possession of the maize in the Food Reserve Agency shed, when the evidence clearly showed that the said maize had been surrendered to the Defendant. -J 8- 7. The learned trial Judge erred in law and fact when he glossed over the fact that the Defendant charged penalty interest to the Plaintiff and failed to order a re-imbursement of the penalty interest. 8. The learned trial Judge erred in law and fact when he, in the absence of substantiating evidence, made findings that the Defendant had re-imbursed various amounts to the Plaintiff by providing him debt relief. 9. The learned trial Judge erred in law and fact when he made inferences that some of the Plaintiff's claims on wrongful debits were afterthoughts and that the Plaintiff had totally failed to prove his case on the wrongful debits to his accounts. 10. The learned trial Judge erred in law and fact when he, in some instances shifted the burden of proof from the Defendant to the Plaintiff. 11. The learned trial Judge erred in law and fact when he agreed with the Defendant that certain sums were due from Tanker Investments Limited due to the default on payments and that the Plaintiff as guarantor was liable to pay the said alleged amounts. -J 9 - At the hearing of the appeal, both parties relied on their respective heads of argument which they augmented with brief oral submissions. The Appellant's Counsel, Mr. Madaika argued the first and fifth grounds of appeal together. However, before proceeding to argue the grounds, Counsel took the view that the court below was in error when it granted the reliefs pleaded in the counterclaim, as it had no jurisdiction to entertain and award reliefs for mortgage action in an action commenced by writ of summons, as opposed to commencing a separate mortgage action by way of originating summons in accordance with Order 30/14 of The High Court Rules (HCR)'. According to Counsel, this was raised as a preliminary issue in the court below and the court dismissed it as shown by the ruling at pages 1083 -1090 of the record, allowing the Respondent to proceed with the counterclaim. It was Counsel's contention that the counterclaim was a wrong mode of commencement for a mortgage action and the court below therefore had no jurisdiction to determine the counter claim or grant any reliefs -J10- sought and therefore the Judgement as it purports to entertain and uphold the counter claim is a nullity. Reliance was placed on the case of Newplast Industries v The Commissioner of Lands and Attorney General' on the effect of commencing an action using the wrong mode. Further reliance was placed on the case of Finance Bank (Z) Limited v Sidik Valli Patel T/a Libala Stores and Judith Hamaluba2 where the question before the Supreme Court was whether or not it was appropriate to join a mortgage action to an action commenced by writ of summons in order to avoid multiplicity of actions. That in the said case the Supreme Court held as follows: "The second action was commenced pursuant to the procedure prescribed by statute, whereas the first action was commenced by writ of summons, therefore it would be inappropriate and contrary to the procedure prescribed for the second action to be to the first action. That being the case, we hold that the trial court erred by ruling that the Appellant ought to have applied to enjoin the second Respondent to cause No. 2007/HPC/0287 in enforcing its equitable mortgage in an action commenced by writ of summons when such action could only -Jil - be commenced by originating summons. The second ground has merit and is therefore allowed." According to Counsel, the counter claim was not pleaded as an action for collection of a debt, but as a mortgage action. Counsel urged us to reverse the holding of the lower court on account of lack of jurisdiction. Reverting to grounds (1) and (5), Counsel submitted that, the court below did not properly adjudicate upon the evidence presented to it but based the Judgment on its own notion, suppositions and inferences which are not supported by the evidence. That the court submitted its own inferences for the actual evidence on record or used its inferences to tilt the scales in favour of the Respondent, hence leading itself into grave error. It is Counsel's argument that the court placed a burden of proof on the plaintiff not only to prove his own case but also to disprove the Respondents case. Counsel submitted that, the Appellant met the threshold for proving his case in a civil matter especially on issues relating to unauthorised transactions and transfers on his accounts. That on the said -J12- unauthorised transactions, the Respondent's witness in his evidence admitted that the Respondent could not find what he termed "source documents" to prove that the transactions in question were sanctioned by the Appellant. It was Counsel's contention that, on the basis of this admission alone, the lower court should have found in favour of the Appellant since the burden of proof to produce the "source documents" is the Respondent's and not the Appellant's It is alleged that the Respondent in its written submissions in the court below, introduced a defence which was not pleaded; that the "source documents" could not be found due to passage of time. That however at the time of commencement of the matter in 1999, the source documents should have been in the Respondent's possession as Section 54 of The Banking and Financial Services Act (Retention of Records)' Order provides for a minimum period of six years for any records in a Bank's possession. According to the Appellant, DCDM were to investigate issues covering the period from October 1993 to October 1999, which is clearly a six- year period leading up to the appointment of DCDM as confirmed by the Respondent's Managing Director in his letter at page 250 of the record. -J13- It was the Appellant's contention that DCDM did not review documents for years 1993-1994 as the Respondent did not provide them any documents for that period, but only for 1995 -1999 despite the mandate letter stating that documents would be provided for the whole period. It was submitted that the failure to produce the records cannot be blamed on passage of time, but on concealment because they were not in the Respondent's favour. On the funds supposedly owed by the limited liability company, Tankor Investments Limited, which indebtedness the Respondent moved to the Appellant's personal account without his knowledge and he settled the same thinking it was his personal debt; it is submitted that the learned Judge in the court below granted this in favour of the Respondent on the basis that the Appellant had signed a guarantee, without interrogating whether the debt was legitimate; whether the Respondent had issued any demand notice to Tankor Investments Limited and without any Judgment or court Order allowing the Respondent to recover the alleged amount. On the learned Judge's granting of the counter claim, it was submitted that, it is settled law that the failure of a defence does not entitle a party to succeed if that party has not proved its case. Reference was made to -J14- the case of Khalid Mohamed v The Attorney General' and submitted that it was an error for the court to use the fact that according to the court, the Appellant had not challenged or protested to a claim and thereby grant the Respondent's claims. It was submitted that even where there is no defence, the Respondent needed to prove its case which according to the Appellant, the Respondent lamentably failed. The second and tenth grounds of appeal were argued together. According to Counsel, the court below did not properly apply the burden and standard of proof which fell on the parties based on the pleadings and the evidence which was before the court. Further that the court failed to distinguish between the persuasive burden of proof and the evidential burden of proof. It was submitted that, in the evaluation of evidence and arriving at the conclusion that the Appellant had failed to prove his claims and that the Respondent had proved its counter claim, the court failed to apply a consistent standard of proof to the Appellant's and the Respondent's cases. -J15- Our attention was drawn to page J25 of the Judgment under appeal at page 32 of the record where the Judge was dealing with the issue of irregular transfer of funds to a Mr. Makulu in the sum of K1,296,490.00 and Mr. Shoko, the Respondent's employee in the sum of K4,000,000.00 and submitted that the Appellant's evidence in relation to the two payments was that he had not sanctioned the payments and he did not know the two individuals and as such the payments were illegally made. Counsel contended that at this point, the onus and burden of proving that the Appellant had indeed given instructions fell to the Respondent, because the Respondent as the bank is the one which made the payments on the Appellant's account and therefore only the Respondent can explain the basis or instructions upon which such payments could have been made; which the Respondent failed to explain or justify. That however, the lower court instead of holding in favour of the Appellant shifted the issue back to the Appellant under the insinuation that the Appellant should somehow have known how the transfers were done. According to Counsel, the trial Judge at paragraph 10 of page J25 found as a fact that the Respondent could not justify the payments but -J16- instead of holding in favour of the Appellant shifted the issue back to the Appellant, essentially placing a duty on the Appellant to have discovered these irregularities earlier and that because four years had passed between the transfers and the report by DCDM, then it was the Appellant's fault. It was Counsel's view that, the issue which the Judge raised was immaterial unless it related to a plea of statute bar which was never raised in the matter. Our attention was also drawn to page 723, paragraph 30 of the record as another instance where the burden of proof was shifted back to the Appellant on an allegation that had already been proved and conceded by the Respondent's witness in relation to a claim for refund of K54,227,028.00 which was erroneously debited to the Appellant's account because of unauthorised money transfers, which only came to light after DCDM completed their investigations and produced their report. In that respect, Counsel asked us to reverse the Judge's finding in so far as it held that the claim for a refund of K54,227,028.00 was not proven. Another instance which was brought to our attention relates to the claim for K59,523,518.00 which according to Counsel, the findings -J17- that this transaction did not have supporting documents was done by DCDM as shown at page 687/5 of the record. It is Counsel's contention that two issues arise on this particular claim. The first issue is that in part of its holding, the court below asserts that the said amount of K59,523,518.00 was already dealt with in the earlier part of the Judgment where the court dealt with the unauthorised transfers to Makulu and Shoko and two other unauthorised debits. That the learned Judge states that the Appellant had not provided him with any figure which was illegally transferred from the call account to the current account and that the Appellant misinterpreted the DCDM report. That however, the learned Judge goes on to note that the unauthorised transfer of this was done on 4th July 1999 which date is more than a year after the transfer to Makulu and Shoko, which both occurred on 10th July 1996. Counsel contends that the learned Judge misled himself when he said that the issues were one and the same and he had already addressed them. The second issue is that the learned Judge again places the burden back on the Appellant and uses the same reasoning as before to dispel and refuse the claim which was adequately proven as the Respondent failed to produce any instruction by which the amount was moved. -J18- Counsel urged us to note that unlike when dealing with the Appellant's case, the learned Judge when dealing with the counter claim lowers the standard of proof and overlooks the defence to the counter claim put up by the Appellant. It is Counsel's contention that the counter claim was not sufficiently proven by the Respondent and the learned Judge fell into grave error when he held that the Respondent had proven the counter claim. The third and seventh grounds of appeal were argued together. Counsel submitted that the learned Judge erred when he held that the words in the facility letters signed by the Appellant had the "effect of compounding" the interest, then that amounted to an express agreement and that it fell within the ambit of the holding of the Supreme Court in the case of Credit Africa Bank Limited (in Liquidation) v John Dingani Mudenda4 and the case of Union Bank Zambia Limited v Southern Province Marketing Union'. It is Counsel's contention that there was no express agreement as the wording in the facility letter was so vague that even acquiescence cannot be inferred in the current case as banks are required to inform their clients in clear exact terms of their intention to charge compound interest. -J19- According to Counsel, there is no evidence to show that the Appellant expressly or by acquiescence agreed to the charging of compound interest. On the issue of penalty interest, Counsel submits that, despite the findings in the DCDM report the learned Judge demonstrated that he did not feel bound by the findings of DCDM; refused to be bound and made his own findings and inferences. That therefore, the court acted unfairly when as it dealt with the issue of penalty interest it unnecessarily only restricted itself to the figure of K71,000,000.00 found by DCDM but refused to consider the extra evidence tendered by the Appellant which showed that penalty interest was charged. The fourth and ninth grounds were argued together and submitted that the learned Judge failed to properly evaluate the evidence before him and in many instances ignored the actual evidence preferring to reject the evidence on record in preference to his own "inferences" which led to him making perverse inferences. It was submitted that, the Judge made a perverse finding at page J35, page 42 of the record, when he found that from all the correspondence produced, there was no protest from the Appellant as to the insinuation made in the facility letters. The sixth ground of appeal was not argued as it was withdrawn. -J 20 - As regards the eighth ground, it was submitted that, the fact that some debt relief had been supposedly provided to the Appellant cannot apply to absolve the Respondent of liability for breaches committed by the Respondent. That there is no evidence which was led to the effect that the debt relief was granted pursuant to an agreement between the parties as a way to offset the losses claimed by the Appellant in this action. That it was therefore wrong for the lower court to accept the Respondent's evidence that simply because of the long relationship at some point in time, the Respondent had provided debt relief to the Appellant, then the debt relief could be a defence against the claims by the Appellant against the Respondent. It was submitted that any debt relief was a separate agreement based on separate considerations and was not granted to offset the amounts claimed in this action and therefore, it cannot shield the Respondent from liability in this action. That without any supporting evidence to connect the debt relief to the specific claims in this action, it was erroneous for the learned Judge to simply accept that the debt relief offset the Appellant's claims. -J 21- In respect to the eleventh ground of appeal, Counsel contends that the learned Judge held in favour of the Respondent in relation to the wrongful unilateral transfer of the indebtedness of Tankor Investments Limited to the Appellant and secretly having the Appellant settle the said indebtedness on the basis that he was a guarantor for a loan which had been taken out by Tankor Investments Limited. The Respondent closed the company's account, a limited liability company and transferred the liability in the sum of K250,656,744.89 without the Appellant's knowledge or consent and the sum was settled by the Appellant. Counsel argues that the position taken by the court is overly simplistic in holding that the Appellant had guaranteed the loan and not supported by law. It was submitted that a guarantor only becomes liable upon the principal debtor being unable to settle the debt. In response, Counsel for the Respondent also relied on the Respondent's heads of arguments which they augmented with brief oral submissions. In response to the issue of mode of commencement of the counter claim, it was noted that the Appellant has sought to attack the jurisdiction of the court below in the manner it dealt with the counter claim. The -J 22- argument by the Appellant is that the court below did not have the jurisdiction to hear and determine the counter-claim on account of mode of commencement. Counsel for the Respondent submits that ground one as couched in the memorandum of appeal does not raise any jurisdictional issues and neither is there anything from which it can be inferred that the issue of wrong mode of commencement is being raised. Our attention was drawn to Order 10/9 (2) Court of Appeal Rules' (CAR), on the manner grounds of appeal should be drafted in the memorandum of appeal, and submitted that the Appellant is trying to sneak in a new ground of appeal via the back door. Reference was also made to Order 10/9 (3) CAR and submitted that the Appellant did not seek leave of the court before canvassing any argument outside the grounds set out in the memorandum of appeal. We were urged to disregard this issue. It was further observed that the issue was dealt with by the ruling of the court below on 6thJanuary 2015 and the ruling was not appealed against and neither was leave sought to appeal against the said ruling as was held in the case of Zambia Revenue Authority v T and 0 Transport'. Which failure goes to jurisdiction to this Court, as such this Court should not entertain the arguments by the Appellant in respect to the alleged wrong mode of -J 23 - commencement. Counsel in response to the first and fifth grounds, submits that the grounds are devoid of merit as the learned Judge in the court below provided sound reasoning to the evidence on record in arriving at the conclusions, he did. That at page J27 of the Judgment, the subject of the appeal, the learned Judge demonstrates the reasoning behind the finding with respect to the agreement made by the defence witness in a question put to him in cross examination. The reasoning being that the agreement by the witness that two of the alleged wrongful transfers were made without supporting documentation was premised on the fact that, the question asked related to specifically what reflected on the DCDM report at page 723 of the record under the heading "transactions still being investigated"; the Judge explained that there was no conclusion regarding that part of the report and further proceeded to state that the witness had only joined the Respondent in 1999 alter the alleged wrongful debits had been made and could not possibly have had first- hand information in that regard. According to Counsel, the Judge further proceeded to give reasoning with respect to the alleged erroneous debit that was made on 4th July 1997. The learned Judge addressed his mind to the evidence on record -J 24- and proceeded to state that "it is obvious that the Appellant misunderstood the report on the issue and went on to base his claim on that misunderstanding". Counsel contends that it is clear that the narration on the transfers between the current account and the call account does not relate to the sum of K59,523,518.00. On the other hand, it is clear that the said sum is exactly the total payments to Makulu and Shoko on the one hand and the debits whose details were "transfer from Mkushi" and "for 4,000 bags for maize", which the Judge acknowledged he had already dealt with. It was Counsel's submission that the learned Judge was entitled to arrive at the conclusion he did after reviewing the evidence on record. Reference in that respect was made to the case of Philip Mango v Dorothy Ngulube and Others' and submitted that the learned Judge was on firm ground in arriving at conclusions and applied his mind to the facts and evidence, contrary to the evidence tendered by the Appellant. On the issue of failure by the Respondent to submit documentation to DCDM, Counsel acknowledged that at the time the Banking and Financial Services Act (Retention of Records) Order, placed an obligation on the Respondent to maintain any records in the bank's possession for a minimum period of six years. That the Act however did not place any -J 25 - obligation on the Respondent to submit such documents to any consultant. Let alone DCDM, more so documents that it did not have in its possession at the time. As regards the second and tenth grounds of appeal, it was submitted that the burden of proof lies upon the party who substantially asserts the affirmative of the issues. That it is trite law that he who alleges must prove. Our attention was drawn to the case of Wilson Masauso Zulu v Avondale Housing Project Limited' where the Supreme Court had this to say: ... It is accepted that where a Plaintiff alleges that he has been wrongfully or unfairly dismissed, as indeed any other case where he makes any allegation, it is generally for him to prove those allegations. A Plaintiff who has failed to prove his cases cannot be entitled to judgment, whatever may be said of the opponent's case." Counsel submitted that the burden of proof lies on the party making the claim and in order to succeed, the party claiming must discharge the burden. According to Counsel, the learned Judge was on firm ground when he found that the Appellant ought to have noticed the irregular payments and that it could not reasonably take four years to identify the -J 26 - irregularity. That the Judge was supported in his finding on the premise that even the Appellant's auditors, too did not spot the irregularity when they ought to have spotted the same and such irregularities were only discerned by DCDM four years after the alleged payment were made. As regards the argument that the learned Judge applied his own inferences which are not supported by the evidence, it was submitted that the Judge merely applied good reason to the facts and evidence as required by the principle of burden of proof and rightly found as a fact that the Appellant had not discharged his burden on the balance of probability; neither did he apply his own findings nor inferences which are not supported by evidence. It is Counsel's contention that the grounds are challenging findings of fact. It was submitted that an appellate court cannot disturb findings of fact of a trial court unless such findings are palpably wrong and perverse. According to Counsel, the Appellant has not demonstrated in any way the perverseness of the findings of the trial Judge and is merely alleging error on the part of the Judge for his failure to prove his case. On the allegation that the trial Judge applied a higher standard of proof than the required standard in civil matters which is on the balance of -J 27- probability to the Appellant's case, whilst applying a lower standard to the Respondent's case, it was submitted that the Judge was justified as the Appellant made submissions alleging or bordering on fraud. There was an allegation of fabrication of the figure of K71,000,000.00, penalty interest which is alleged, to have been added in the fabricated account in order to tie to the findings of DCDM. It was contended that the allegation of fabrication of figures borders on allegation of fraud. Our attention was drawn to the pronouncement by the Supreme Court in Sithole v The State Lotteries Board' that: "If a party alleges fraud, the extent of the onus on the party alleging is greater than a simple balance of pro babilities." Further, on the failure by the Respondent to produce all documents to DCDM, Counsel contends that there is no evidence on record which indicates that DCDM were appointed as forensic investigators to whom there was an obligation to give evidence on the basis as alleged. It is submitted that there is no legal basis at law placing an obligation on the Respondent to have submitted the documents. In response to the third and seventh ground of appeal, it was submitted that the charging of penal interest in this jurisdiction is illegal and does not form part of the banking practice in this country. -J 28- The case of Union Bank Zambia Limited and Southern Province Co- operative Marketing Union Limited' was cited where the Supreme Court held that: 'Penal interest is certainly not part of banking practice and custom in Zambia, even if there had been an agreement to pay penal interest, such would have been liable to be struck down for being penalty objectionable at common law." As regards compound interest, it was submitted that it can only be sustained if there is express agreement between the parties or if there is evidence of consent or acquiescence to the same. That the consent need not be express, but it was nevertheless given in the loan facility agreement. On the argument that the learned Judge should have subordinated his own opinion to that of DCDM Consultants as experts, with respect to the charging of compound interest, it was submitted that it is settled law that an expert merely gives an opinion to the trier of facts, hence his opinion should not substitute the decision of the court. Reliance was to that effect placed on the case of Chuba v The People'°. It was argued that, the court is not mandated to replace its own Judgment for that of the expert. - (cid:9) -J29- The court has discretion to weigh the evidence of an expert and still form its own Judgment. That as such, the trial Judge was still entitled to form his own Judgment. It was further submitted that the sum of K71,000,000.00 was paid back by the Respondent for the alleged penal interest and therefore the issue should not arise. In response to the fourth and ninth grounds of appeal, it was the Respondent's contention that where the Judge appears to regard both competing causes as improbable, then it is perfectly appropriate for him to hold that the claimant had failed to establish his case on the balance of probabilities. It was submitted that for the trial Judge to arrive at a conclusion, he must address his mind to the evidence tendered by the litigants to make the determination as to which evidence is the most probable to the issue in contention. That in this case, the learned Judge was well within his mandate to address his mind to the evidence before him and make inferences as to the probability of such evidence. Counsel contended that, the learned Judge was not satisfied with the evidence led by the Appellant in support of the alleged wrongful debits in light of glaring lacuna and made inferences on that basis and rightly in favour of the Respondent as he was entitled to do so at law. - (cid:9) -J30- In response to ground eight, it was submitted that the Appellant admits that the Respondent applied debt relief to the Appellant by making payments to the Appellant's account in the sum of K243,254,138.12 as payment for the claims in this action, but rather puts forward a perplexing argument that the payments were made by the Respondent to the Appellant as an "appreciation for being a good customer or encouragement for him to continue taking his business to the bank" which proposition is lacklustre. That there is no evidence on record for this startling proposition nor is it supported by the pleadings. According to the Respondent, the Appellant is claiming payments that have already been made to him through the debt relief. As regards the eleventh ground of appeal, Counsel submitted that in certain situations, security for a loan may also be provided by a surety under a contract of guarantee were a third party guarantees the performance of some obligation by the other party, and the failure by such party to perform such obligation shifts the liability to the secondary debtor. According to the Respondent, it is not in dispute that the Appellant guaranteed sums of money that were due from Tankor Investment Limited. That in the circumstances, at the point of default by Tankor to repay the guaranteed sum, the Respondent was entitled to transfer the liability of Tankor to the Appellant who had guaranteed the sums of -J 31- money. It was submitted that, the guarantee appearing at pages 572-575 indicates that the guarantee was not to exceed K150,000,000.00, but it however carried with it interest at the then current rate from the date of demand until full payment, which sum totaled K250,656,744.89. The Appellant did file lengthy heads of argument in reply. We do not find the necessity in recapitulating the same as they are merely alluding to issues which the Appellant has already addressed in his heads of argument in support of the appeal. We have considered the arguments by the parties and the Judgment being impugned. On the issue of the counter claim, we note that this issue was raised as a preliminary issue in the court below. The learned Judge rendered a ruling which appears a page 1083 of the record. In the said ruling, the Appellant's application to have the counterclaim misjoined from the cause of action was dismissed as the court was of the view that it can conveniently be tried together with the Appellant's claim. The court was further of the view that the counter claim had been set out clearly and it would enable the Appellant to put up a defence against it. 432- We are in agreement with the ruling of the court below on the interpretation of Order 15 of The Rules of the Supreme Court' (RSC) and the views of the learned authors of Odger's Principle of Pleadings and Practice' which the learned Judge relied on. In addition, we note that the said ruling which was delivered on 6th January 2015 was never a subject of an appeal. We have also perused the grounds of appeal before us and we note that the issue being raised by the Appellant does not fall under any of the grounds of appeal. We are therefore disinclined from being drawn into this issue which the Appellant ingeniously wish to be part of the appeal. As for the appeal, we shall deal with grounds 1, 4, 5, 6, 8 and 9 together as they are inter related. These grounds raise three issues. The first issue relates to the Respondent's counter claim. The allegation by the Appellant is that the upholding of the counter claim was contrary to the evidence on record. As earlier alluded to, the Appellant's defence to the counter claim consisted of merely a bare denial. Issues of lack of documentation and not fully drawing on the facility were not raised in the defence or any other pleading. The Appellant only raised these issues in his evidence. In our view, the learned Judge took into consideration the facility letter and other correspondence which were exchanged by the parties and -J 33 - arrived at the conclusion that the loan was fully utilized and to that end opined that the counter claim succeeds. We see no basis to fault the learned Judge on his finding. The second issue is that the dismissal of the Appellant's entire case was contrary to the evidence on record. The third issue is that the matter was not properly adjudicated upon, based on the evidence. That it was based on the court's own notions suppositions and inferences which were not supported by evidence. We shall deal with these two issues together. A perusal of the Judgment being impugned shows that the court below based its findings and decisions on the evidence which was before it and drew inferences from the said evidence. The issue which arises for our determination is whether the learned Judge drew the correct inferences on all the issues as regards the reliefs which were being sought by the Appellant given the evidence which was before him. We shall address this issue in accordance with the Appellant's allegations as on which claims the learned Judge erred, as we are of the view that the learned Judge erred on some of claims. As regards the sum of K54,277,028.00 under the third head; unauthorised money transfer to unknown account; this money, the 6. -J 34- Respondent's own witness admitted it was debited to the Appellant's account without documents and that it had not been reimbursed. This was an admission on the part of the Respondent that this amount ought to have been reimbursed. In our view, it matters less that the admission came at cross examination stage. The reason advanced by the learned Judge for not finding for the Appellant was erroneous. The Respondent's witness was a witness giving evidence from the bank's records and therefore it mattered less when the witness joined the Respondent and whether the query was raised earlier or not, but what was on the Respondent's record. As regards the sum of K470,829,827.42 under the first head of claims, which the Appellant claims was compound and penalty interest for the nine (9) months the maize was seized by the receiver for Cavmont for a debt which was incurred by Tankor Investments Limited, a registered limited company, the owner of the warehouse where the maize was stored; the inference that since the Appellant was also a director in Tankor Investments Limited and should therefore have had control of the situation was wrong and erroneous as it was a limited company and as such a separate legal entity from the Appellant. That coupled with the fact that the Respondent did not controvert the fact that it failed to IPP -J35- • create the charge on the maize, in our view the learned Judge ought to have granted this claim. As regards grounds 2 and 10, the allegation is that the learned Judge applied a different standard of proof to the Appellant's case compared to the Defendants and also kept shifting the burden of proof from the Appellant to the Respondent. We have already addressed the issue of the counter claim, suffice to state that a perusal of the Judgment being impugned shows that the learned Judge applied the same burden of proof which he maintained throughout the case, except where allegations of fraud arose, which he was entitled to do in accordance with the law. The learned Judge followed the old adage of he who alleges must prove. We find no basis on which to fault the learned Judge on these two grounds. As regards grounds (3) and (7), the allegation is that the learned Judge was wrong in finding that there was an express agreement to charge compound interest and that he glossed over the issue of penalty interest. A careful perusal of the Judgment shows that the learned Judge dealt exhaustively with both issues. -J36- The facility letter in its wording provided for periodical rests (compound) interest. It also provided for charging of penalty interest which the learned Judge found was charged and stated that it was illegal. The learned Judge took note that the same was however reimbursed by way of book entry. These two grounds therefore have no merit. We now turn to ground (11). There is ample evidence that the Appellant had guaranteed the loan to Tankor Investments Limited. The said guarantee appears at page 572 of the record. Therefore, the learned Judge cannot be faulted in agreeing with the Respondent that the transfer of the debit under Tankor Investment Limited to the Appellant's personal account was in order. In the view we have taken, this appeal partially succeeds. The Appellant is awarded the sums of K470,829,827.42 and K54,227,028.00 (unrebased). The said amounts are to attract interest at the Bank of Zambia average short-term deposit rate from the time of commencement of the action to this Judgment and thereafter at the commercial lending rate. The amounts awarded herein are to be offset from the amounts which were awarded to the Respondent in the counter claim in the court below. -J37- We award costs of the appeal in this to the Appellant. Same to be taxed in default of agreement. J. CHASHI COURT OF APPEAL JUDGE I. F. M. LENGALENGA M. J. SIAVWAPA COURT OF APPEAL JUDGE (cid:9) COURT OF APPEAL JUDGE