Cylinder Repair and Engineering Ltd and Anor v Foveros Mining Limited (2019/HKC/026) (10 March 2025) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2019/HKC/026 AT THE COMMERCIAL REGISTRY HOLDEN AT KITWE (Civil Jurisdiction) BETWEEN: 1 PLAINTIFF ST AFRICAN ENGINEERING SERVICES LIMITED 2ND PLAINTIFF AND FOVEROS MINING LIMITED DEFENDANT KONKOLA COPPER MINES PLC GARNISHEE Before the Hon. Mr. Justice E. Pengele on 10th March, 2025. For the Plaintiffs: Ms. T. Chipili of Messrs. Katongo & Co. For the Defendant: N/A For the Garnishee: Ms. S. Banda of Messrs. ECB Legal Practitioners RULING Case referred to: 1. The Creditors of Maamba Collieries Collieries Limited, Appeal No. 48/2009. Legislation referred to: a. Rules of the Supreme Court, 1999 Edition; b. High Court Rules, Chapter 27 of the Laws of Zambia; c. Corporate Insolvency Act No. 9 of 2017; and d. Companies Act No. 10 of 2017. 1.0 INTRODUCTION 1.1 This Ruling follows an application by the Plaintiffs for an order to re-issue the Writ of Fieri Facias (Writ of Fifa) which had earlier been issued on 13th February, 2023. The application has been made by summons and affidavit in support pursuant to Order 45, rule 1 as read with Order 49(3) of the Rules of the Supreme Courta and Order III, rule 2 of the High Court Rulesh. In addition, the learned Counsel for the Plaintiffs filed skeleton arguments. 1.2 On 13th November, 2024, the Garnishee filed an affidavit in opposition and skeleton arguments. 2.0 BACKGROUND 2 .1 The relevant background to the Plaintiffs' application is that the Plaintiffs commenced this action on 19th June, 2019, by writ of summons and statement of claim. The Defendant entered appearance and filed a defence on 5th July, 2019. 2.2 On 23rd July, 2019, the Court entered judgment on admission against the Defendant. 2.3 On 11th May, 2020, the Plaintiffs commenced garnishee proceedings against Konkola Copper Mines Plc (hereinafter referred to as "the Garnishee"). 2.4 When the garnishee application came up for hearing on 21st May, 2020, the Garnishee applied for an adjournment. The Court found that the reasons advanced for the application for an adjournment were not firm. -R2- Consequently, the Court granted the application for an adjournment subject to an order for the Garnishee to pay a hearing fee of Kl,000.00 and the Plaintiffs' costs for that day. 2.5 After taxation of the costs awarded to the Plaintiffs, the Taxing Master allowed a total of K69,096.24. It was after the issuance of the Summary of Taxation for that amount that the Plaintiffs proceeded to issue the Writ of Fifa on 13th February, 2023. 2.6 Following an application by the Garnishee to set aside the st Writ of Fifa for irregularity, in her Ruling of 31 May, 2023, the Registrar set aside the Writ of Fifa for irregularity. She based her decision on the fact that the Writ of Fifa had irregularly cited the Garnishee as a party to the proceedings when the Garnishee had never been joined to the proceedings. 2.7 It is that Writ of Fifa which the Plaintiffs now want to be reissued. 3.0 AFFIDAVIT IN SUPPORT 3.1 The affidavit in support of the Plaintiffs' application is deposed to by Katongo Nsofu, Counsel for the Plaintiffs. The crux of his depositions is that the Garnishee is no longer in liquidation. 3.2 The deponent went on to state that he has written to the Garnishee's Advocates twice to remind them about their client's obligations. In this regard, he referred me to letters -R3- dated 5th March, 2024 and 29th July, 2024, produced as exhibits "KN 1" and "KN2". 3.3 On account of the foregoing, he asked this Court to grant him leave to levy execution against the Garnishee for the sum of K69,000.24. 4.0 AFFIDAVIT IN OPPOSITION 4.1 The affidavit in opposition 1s sworn by Harrison Alfred Zulu, Counsel for the Garnishee. The gist of his depositions is that, although the Garnishee is no longer in liquidation, on 22nd July, 2024, the Garnishee's Creditors made an application under Cause No. 2019/HP/0761, where they proposed a scheme of arrangement. The scheme of arrangement was approved on 28th June, 2024. In this regard, the deponent produced a copy of the ruling approving the scheme of arrangement marked "HAZ2". 4.2 He proceeded to depose that the ruling and the scheme of arrangement are binding on all Class 1 and Class 2 Creditors. He produced a copy of the explanatory statement marked "HAZ3". He maintained that the Plaintiffs fall in Class 1 since their claim is below US$ l ,000,000.00. 4.3 According to the deponent, the Plaintiffs ought to have filed their claim within the period specified in the ruling. He stated that the Scheme Administrator and the Garnishee's Finance Team have advised him that the Plaintiffs have not filed any claim under the scheme of arrangement. -R4- 4.4 The deponent proceeded to say that the Plaintiffs' claim has been forfeited. This is because, in the aforesaid ruling, the Court expressly indicated that claims that would not be filed with the Scheme Administrator before the bar date of 15th August, 2024, would be forfeited. 4.5 In the deponent's opinion, this Court does not have jurisdiction to entertain the Plaintiff's application for an order for leave to re-issue the Writ of Fifa. 5.0 SKELETON ARGUMENTS 5.1 Counsel for the Plaintiffs as well as Counsel for the Garnishee filed skeleton arguments for which I am indebted. I have taken time to attentively read through the said arguments. However, I will not reproduce the arguments in this Ruling. I will simply refer to relevant aspects in my consideration and decision. 6.0 HEARING 6.1 When the application came up for hearing on 18th November, 2024, the learned Counsel for the Plaintiffs, Ms. Chipili, indicated that she was unable to proceed with the hearing. This was because the Plaintiffs wished to file an affidavit in reply to the Garnishee's affidavit in opposition. The learned Counsel for the Garnishee did not object to the application for an adjournment. 6.2 In light of the foregoing, I allowed the Plaintiffs to file a reply by 2nd December, 2024. Counsel for both parties indicated that they would rely entirely on the documents on the record and that I should proceed to render my -RS- Ruling accordingly without ,the need for them to appear for a hearing. 6.3 Despite undertaking to file an affidavit in reply by 2nd December, 2024, by the time I was concluding this Ruling the Plaintiffs had not filed their reply. 7.0 CONSIDERATION AND DECISION 7 .1 I have taken time to carefully consider the Plaintiffs' application and the Garnishee's opposition. I have also taken into account the skeleton arguments filed by Counsel for the parties. 7.2 I must point out that, in view of the fact that the Plaintiffs chose not to file an affidavit in reply to the factual depositions contained in the Garnishee's affidavit in opposition, those factual depositions have not been controverted. 7.3 On the affidavit evidence before me, I hold that the scheme of arrangement was approved on 28th June, 2024, in a ruling of Kafunda, J, exhibited in the Garnishee's affidavit in opposition as "HAZ2". 7.4 I also hold that the Plaintiff fell in Class 1 of Creditors because its claim is less than US$ 1,000,000.00. 7.5 According to the Garnishee, in the ruling of Kafunda, J, the Judge ruled that claims that would not be filed with the Scheme Administrator before the bar date of 15th August, 2024, would be forfeited. 7.6 I have taken time to peruse the ruling of Kafunda, J. In that ruling, at page RS 1, Kafunda, J, found that the -R6- scheme of arrangement complied with the statutory requirements under section 46(8) of the Corporate Insolvency Act0 and the Companies Actd. 7.7 The aforesaid section 46(8) of the Corporate Insolvency Act0 provides in paragraph (a), as follows: , "(8) Where a meeting, by extraordinary resolution, agrees to a compromise or arrangement, the compromise or arrangement- (a) shall be binding on all the creditors or class of creditors or on the members or class of members, as the case may be .... " 7.8 The ruling of Kafunda, J, shows that the court order and the notice convening the Garnishee's scheme creditors' meeting were advertised in the Zambia Daily Mail Newspaper from 8th to 10th April, 2024. Thereafter, meetings of creditors were held at which the proposed scheme of arrangement received over 99% approval by way of votes from the creditors. 7.9 The Plaintiffs have not adduced any evidence to show that they invoked section 46(10) of the Corporate Insolvency Act0 to object to the application for approval of the scheme of arrangement at the hearing of that application by Kafunda, J. But even assuming that the Plaintiffs had raised an objection, I hold the view that the objection would not have changed anything in view of the percentage of approval that the scheme of arrangement received. -R7- 7.10 In light of the fact that the court order and the notice convening the Garnishee's scheme creditors' meeting were th advertised in the Zambia Daily Mail Newspapers from 8 to 10th April, 2024, I agree with the Garnishee that the Plaintiffs must be deemed to have been aware of both the aforesaid court order as well as the notice of the meeting. 7 .11 At page R55 of his ruling, Kafunda, J, held that the scheme of arrangement is binding on all the scheme creditors of the Garnishee Company, being the Class 1 scheme creditors and the Class 2 scheme creditors. 7 .12 In view of the foregoing, I hold that the subject scheme of arrangement is binding on the Plaintiffs. In so holding, I am reinforced by the decision of the Supreme Court in the case cited to me by Counsel for the Garnishee of The Creditors of Maamba Collieries Limited V. Maamba Collieries Limited,Appeal No. 48/2009. In that case, the Supreme Court said the following: "We agree with the learned trial Judge that, according to these provisions, if a meeting by extraordinary resolution agrees to any compromise or arrangement, it shall be binding on all Creditors or class of Creditors or on the members or class of members as the case may be." 7 .13 A look at Kafunda, J's ruling establishes that the learned Judge went on to order, at page R59, as follows: -RS- "that in line with the Explanatory Statement, any Claims that would not have been submitted by the Bar Date (17:00h) (Lusaka time) on the date falling [30 days) from the Restructuring Effective Date, or, if that day is not a Business Day, the next succeeding day which is a Business Day, the same being on 15th August, 2024, shall be forfeited." 7 .14 The deponent to the Garnishee's affidavit in opposition has stated that he had been advised by the Scheme Administrator and the Garnishee's Finance team that the Plaintiffs have not filed any claim under the scheme of arrangement. 7.15 The Plaintiffs have not contested the above factual deposition made by the Garnishee. 7.16 Consequently, I hold that the Plaintiffs did not submit their claim, pursuant to the scheme of arrangement and Kafunda, J's ruling, by the bar date of 15th August, 2024. Therefore, in accordance with the ruling of Kafunda, J, the Plaintiff's subject claim stood forfeited after the bar date of 15th August, 2024. 8.0 CONCLUSION 8.1 In conclusion, for the reasons I have given in this Ruling, I have not found merit in the Plaintiffs' application for an order for leave to re-issue the Writ of Fifa. I dismiss the Plaintiffs' application accordingly. -R9- 8.2 On the facts of this case, I order that the parties shall bear their own costs for this application. 8.3 Leave to appeal is granted. Delivered at Kitwe this 10th day of March, 2025. --E--r-;-;J~;;;~~;-~ HIGH COURT JUDGE -RIO-