Stream Energy Zambia Limited v Erican Transport and Construction Limited (2023/HPC/0626) (28 June 2024) – ZambiaLII

(cid:9) IN THE HIGH COURT FOR ZAMBIA 2023/HPC/0626 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA (cid:9) (Civil Jurisdiction) T'7 L,tvIA LI\IISIOI •3 COMP(cid:9) BETWEEN: Df 28 .hiN •ti•LtI STREAM ENERGY ZAMBIA LIMIT PLAINTIFF RGISTRV "3 AND P.C. 6cxouSA._ERICAN TRANSPORT AND CONSTRUCTION LIMITED(cid:9) DEFENDANT Before: Honourable Lady Justice Chilombo Bridget Maka. For the Plaintiff: Mr. J. Chimankata - Messrs. Cholt Legal Practitioners For the Defendant: Mr. E. Mfune - Messrs. Abercorn Chambers RULING Legislation Referred to: 1. The High Court Rules, Chapter 27 of the Laws of Zambia. 2. The Rules of the Supreme Court of England, 1999 Edition (White Book). Cases Referred to: 1. Sandy Kawayo and Kawayo Enterprises Limited vs. First Alliance Bank Zambia Limited SCZ Appeal No. 155 of 1997. 2. Zambia Export and Import Bank vs. Mkuyu Farms Limited, Elias Andrew Spyron and Mary Ann Langley Spyron (1993- 1994) Z.R, 36 (SC). 3. Ivwanji vs. Mgwadi (HP/ 1150/2019) (Unreported) 4. Ecobank Malawi Limited vs. Nyiombo Investments Limited (HPC/556/2016). 5. S. Brian Musonda (Receiver of First Merchant Bank Zambia Limited (In Receivership) vs. Hyper Food Products Limited and 2 Others (1999) Z.R, 124 (SC). 6. Lisulo vs. Lisulo (1998) Z.R, 75. 1. Introduction. 1.1. On April 16, 2024, the Defendant filed an application seeking leave to settle the Judgment debt in monthly installments. This application was made in accordance with Order 36, Rule 9 of the High Court Rules by way of summons along with an affidavit, and skeleton arguments. 1.2. On June 4, 2024, the Plaintiff opposed the application by submitting an affidavit and skeleton arguments. 2. Background. 2.1. By way of Writ of Summons accompanied by statement of claim, the Plaintiff initiated an action against the Defendant seeking the following reliefs:- i. The sum of ZMW985,248.00 or its Dollar amount at the agreed rate of ZMW18.56. ii. 10% of the amount due as legal fees for debt collection. iii. Interest; and iv. Costs. R2 2.2. The Defendant entered appearance and settled its defence on 27th September, 2023. 2.3. On 10th October, 2023, Orders for Directions were issued, and there was compliance by the Plaintiff while the Defendant did not comply. 2.4. Two days before the matter was scheduled for trial on April 18, 2024, the Defendant filed the current application. On April 18, 2024, I noted that the Plaintiffs application had been filed prematurely. However, since the Defendant indicated in its supporting affidavit that it was not contesting the Plaintiff's action, Judgment on admission was entered in the Plaintiff's favor. This allowed for the hearing of the current application. 3. The Defendant's Case. 3.1. The crux of the Defendant's evidence in support of the application was its inability to pay the Judgment debt in a lump sum. The Defendant's averred that its average monthly income was ZMW82,466.00, while its estimated monthly liabilities amounted to ZMW44,954.00, leaving an average balance of ZMW37,812.00. A bank statement and .". computation schedule were exhibited as "EM.". 3.2. The Defendant proposed to pay a sum of ZMW60,000.00 every quarter towards the Judgment debt. 3.3. In its arguments, the Defendant cited Orders 3 Rule 2, and 36 Rule 9 of the High Court Rules, which empower R3 this Court to issue interlocutory orders when necessary to achieve justice and to order the payment of a judgment debt in installments when there is sufficient reason. 3.4. The Defendant further referenced Order 47, Rule 1(3) of the Rules of the Supreme Court of England, 1999 Edition (White Book), which requires the Applicant to disclose their income, liabilities, and the nature and value of any property. 3.5. To further support its application, the Defendant cited the cases of Sandy Kawayo and Kawayo Enterprises Limited vs. First Alliance Bank Zambia Limited' and Zambia Export and Import Bank vs. Mkuyu Farms Limited, Elias Andrew Spyron and Mary Ann Langley Spyront2 . 3.6. It was submitted that the Defendant, through its supporting affidavit, had sufficiently demonstrated its inability to pay the judgment sum in a lump sum. Additionally, it was argued that allowing the application would not prejudice the Plaintiff. 4. The Plaintiff's Case. 4.1. The essence of the Plaintiff's opposition was that the Defendant had not adequately substantiated its claim of being unable to liquidate the judgment sum. The Plaintiff pointed out that the bank statement provided was outdated, reflecting the Defendant's financial status for R4 the year 2022, and did not show the current situation. Additionally, that the cash flow projections failed to demonstrate the Defendant's financial constraints, and the provided monthly income and liabilities figures were inconclusive. 4.2. It was further argued that the proposed monthly payment amount was highly unreasonable and prejudicial, considering that the Plaintiff had been deprived of its funds for over a year. The Plaintiff contended that the prolonged duration required to settle the Judgment debt would cause its value to depreciate. 4.3. In its legal arguments, the Plaintiff cited Order 36, Rule 9 of the High Court Rules and referenced the Zambia Export and Import Case as authorities supporting the Court's discretion to grant permission to settle a Judgment debt in installments. 4.4. Order 47, Rule 1 of the White Book was also cited to emphasize the procedure and criteria for making and granting such applications. The case of Sandy Kawayo and Another vs. First Alliance Bank Zambia Limited' was referenced to illustrate the application of Order 47, Rule 1 of the White Book. 4.5. The Plaintiff also cited the case of Ivwanji vs. Mgwadi3 to outline the evidential requirements and burden that the Defendant must meet in such an application. It was argued that the Defendant's evidence fell short and did not R5 meet these legal standards. Additionally, the case of Ecobank Malawi Limited vs. Nyiombo Investments Limited4 was referenced to assert that the exhibited cash flow projection merely represents future expectations. 4.6. The Plaintiff reiterated that the bank statement provided by the Defendant pertained to the year 2022 and therefore does not accurately reflect the Defendant's current financial position. It was also emphasized that the Defendant failed to exhibit its audited accounts or income statement to substantiate its claims, thus not meeting the requirements under Order 47, Rule 1 of the White Book. 4.7. The Plaintiff urged this Court to assess the reasonableness of the time it would take for the Defendant to settle the Judgment debt if monthly instalments of ZMW20,000.00 are permitted. It was emphasized that this assessment is crucial, as underscored in the Ecobank Malawi Limited case and in S. Brian Musonda (Receiver of First Merchant Bank Zambia Limited (In Receivership) vs. Hyper Food Products Limited and 2 Others5 . 4.8. The Plaintiff argued that allowing the Defendant's proposed payment structure would extend the time to settle the Judgment debt to over four (4) years, a period deemed unreasonable and prejudicial as it would financially disadvantage the Plaintiff. R6 5. Hearing. S. 1. The Defendants application was heard on June 12, 2024, with legal representatives from both parties present. 5.2. On behalf of the Defendant, Mr. Mfune stated that he was relying on the affidavit and skeleton arguments in support dated April 16, 2024. He explained that the Defendant was unable to pay the Judgment sum in full due to the current economic conditions, which have significantly impacted its ability to meet operational requirements. Mr. Mfune expressed the Defendant's readiness to settle the Judgment sum through instalments and prayed that leave to do so be granted. 5.3. Mr. Chimankata, representing the Plaintiff, relied on the filed affidavit and skeleton arguments in opposition dated June 4, 2024, He acknowledged the Court's authority to order the payment of a Judgment sum in instalments but emphasized that such an order can only be granted upon sufficient cause being demonstrated by the Defendant. 5.4. Mr. Chimankata's oral submissions essentially reiterated the assertions made in the affidavit in opposition. He emphasized that the reference to the current economic conditions was an afterthought, as it was not included in the affidavit in support, and argued that this should not be given undue attention by the Court. S.S. He argued that the Defendant's application lacked merit. Additionally, in the event that the Court granted the R7 requested leave, he urged consideration of the extended timeframe required for full settlement of the Judgment debt, which he claimed would prejudice the Plaintiff. He prayed that the application be dismissed to allow the Plaintiff enjoy the fruits of is Judgment. 5.6. In response, Mr. Mfune argued that the bank statements and computations provided in the supporting affidavit clearly demonstrate the Defendant's current financial position. He reiterated that the Defendant lacked the ability to pay the lump sum Judgment debt. Mr. Mfune reaffirmed the Defendant's commitment to settling the Judgment debt in instalments, subject to the Court's approval. 6. Consideration and Determination. 6.1. I have reviewed the Defendant's application along with the supporting documents and the Plaintiff's opposition. I have also considered the oral arguments presented during the hearing. 6.2. As rightly argued by the parties, Order 36, Rule 9 of the High Court Rules grants this Court the discretion to consider an application for leave to settle the Judgment debt in instalments. It provides as follows:- "Where any judgment or order directs the payment of money, the Court or a Judge may, for any sufficient reason, order that the amount shall be paid by installments, with or without R8 interest. The order may be made at the time of giving judgment, or at any time afterwards, and may be rescinded or varied upon sufficient cause, at any time. The order shall state that, upon the failure of any installment, the whole amount remaining unpaid shall forthwith become due: Provided that where there is a default in paying any one installment, there shall be no order for stay of execution on the balance." 6.3. From the aforementioned provision, it is evident that the discretion to permit the settlement of a Judgment debt in instalments should only be exercised when sufficient justification has been demonstrated. This principle was reaffirmed in the referenced case of Zambia Export and (2) Import Bank vs. Mkuyu Farms Limited and Others , where it was held, inter alia, that:- "The Court may order that a judgment debt be satisfied by instalments upon sufficient cause being shown by the judgment debtor." 6.4. In determining what constitutes sufficient cause, it is essential to refer to the guidelines outlined in Order 47, Rule 1(3) of the White Book, which stipulates that:- "An application made by summons must be supported by an affidavit made by or on behalf of the applicant stating the grounds of the application and the evidence necessary to substantiate them and, in particular, where such application is R9 made on the grounds of the applicants inability to pay, disclosing his income, the nature and value of any property of his and the amount of any other liabilities of his." 6.5. Therefore, the Judgment debtor, in this instance the Defendant, must disclose its current income, the nature and value of its assets, as well as any other liabilities it has. 6.6. In casu, the Defendant stated that it was unable to pay off the entire Judgment debt immediately. However, the Defendant, through its Counsel, expressed willingness and commitment to settling the debt in instalments with the Court's permission. 6.7. To illustrate its inability to settle the Judgment debt, the Defendant provided this Court with a concise schedule detailing its monthly income, liabilities, and net balance. Additionally, the Defendant submitted its bank statement covering the period from July 8, 2022, to August 10, 2022. Furthermore, exhibits included a cash flow projection for year 1 and payroll records for January 2024 and February 2024. 6.8. The Plaintiff, in opposition to this application, argued that the Defendant had not adequately demonstrated sufficient cause for the Court to grant its application. It was asserted that the bank statement and cash flow projections provided did not accurately portray the Defendant's current financial standing. Consequently, it was RiO contended that the application lacked merit and should be dismissed. 6.9. Upon reviewing the evidence presented in support of this application, I observe that the Defendant provided an outline of its monthly income, monthly liabilities, and the resulting balance. However, these figures were not substantiated by supporting evidence. Instead, the Defendant submitted an outdated bank statement from two years ago. Furthermore, the Defendant did not disclose the nature and value of its assets, if any. Based on this assessment, I am of the opinion that the Defendant has not provided a transparent and comprehensive disclosure of its current financial status. 6. 1O.Based on the above considerations, I conclude that the Defendant has not demonstrated sufficient cause or justification to warrant the settlement of the Judgment debt in instalments. Without a clear and current understanding of the Defendant's financial status, including its assets and liabilities, this Court cannot definitively determine whether the Defendant is unable to settle the Judgment in full at this time. 6.11. Based on the findings above, the consideration of the proposed timeline for settling the Judgment sum is rendered otiose. 6.12. It is a well-established legal principle that the Plaintiff, or any successful party, should be able to enjoy the benefits R11 or fruits of its Judgment. This principle was affirmed in the case of Lisulo vs. Lisulo6 wherein it was held that:- "Litigation must come to an end and successful parties must enjoy the fruits of their Judgment." 7. Conclusion. 7.1. The Defendant did not provide a complete and transparent disclosure of its assets, income, and liabilities. As such, sufficient justification has not been demonstrated to justify granting leave to settle the Judgment debt in instalments. 7.2. Consequently, the Defendant's application for leave settle the Judgment debt in instalments cannot be sustained and it is hereby dismissed for want of merit. 7.3. I award costs of and incidental to this application to the Plaintiff to be taxed in default of agreement. 7.4. Leave to appeal is hereby granted. Delivered at Lusaka this 28th day of June, 2024. Th Chilombo Bridget Maka HIGH COURT JUDGE R12