Arm Secure Limited v Astro Holdings Limited and Ors (2021/HPC/200) (3 April 2024) – ZambiaLII

IN THE HIGH COURT FOR ZAMBIA 2021/HPC/200 AT THE COMMERCIAL REGISTRY HOLDEN AT LUSAKA ._: .·.I.~·-,. :,°{, ..\ ! t;t_lJ;-~-/ .. ( Civil Jurisdiction) , :.:: :.· ,- ·' ··,,-- 1 •: ~ _~; .:• . ,, · <,, -I \_ I ' • , '' j) O 3 APR 2024 BETWEEN: . - _cc'·•·••·. . :· .. _. ... f, •~I ARM SECURE LIMITED PLAINTIFF AND ASTRO HOLDINGS LIMITED 151 DEFENDANT FURNITURE HOLDINGS LIMITED 2ND DEF EN DANT ADDIT TOURS AND TRAVEL LIMITED DEFENDANT JRD Before Hon. Lady Justice Irene Zeko Mbewe Appearances For the Plaintiff: Mr. Ndalameta, Messrs MAY & Company For the Defendants: v Mr. C. Malambo, Messrs Malambo & Company RULING Cases referred to: 1. Barclays Bank Zambia Pie v Zambia Union of Financial Institutions Allied Workers [2007] ZR 106 2. TAP Zambia Limited v Percy Limbusha and 8 Others, Selected Judgment No. 47 of 2017 Legislation referred to: 1. The High Court Rules, Chapter 27 of the Laws of Zambia 2. The Sheriff's Act, Chapter 37 of the Laws of Zambia llPage 3. Rules of the Supreme Court of England (White Book) 1999 Edition Introduction By this application, the Defendants seek an order to set aside the writ of fieri facias (fifa) for irregularity. The application is premised on order 47/1/8 of the Rules of the Supreme Court 1999 Edition, section 14 (2) of Sheriff's Act Chapter 37 of the Laws of Zambia, Order 30 rule 1 as amended by the High Court (Amendment) Statutory Instrument No. 58 of 2020, rule 3A (1) of the High Court Rules, Chapter 27 of the Laws of Zambia. Defendants' case The supporting affidavit sworn by Nikita Sanmukh Patel a director for the Defendants discloses that the Court delivered a . Judgment on 11th July, 2023 in which the Plaintiff was granted interest. The Court did not give a specific figure of the interest rate to be used. On 17th July, 2023 the Plaintiff issued a writ of fifa and put 10.8% per annum and simple interest for the sum of K6,000.00 which the Court did not grant. The Plaintiff did not account for amounts granted to the Defendant so as to reduce the amounts due. The deponent is advised by Counsel and believes to be true that a Judgment creditor in the absence of an agreement by the 21Page parties should ask the Court for a specific figure of the rate to be used, which was not done in this case. The deponent is further advised by Counsel that the absence of the Court granting the figure of interest rates makes the writ of fifa irregular and the Plaintiff is liable for the irregular execution. Plaintiff's case The opposing affidavit is deposed to by Dirk Kotze the managing director of the Plaintiff company. The deponent asserts that the Plaintiff commenced an action against the Defendants on 21st April, 2023 following which Judgment was entered in favour of the Plaintiff on 11th July, 2023. The Court ordered that the Plaintiff was entitled to the sum of KB,455, 157 .80 with interest at the short-term deposit rate from the date of writ of summons to the date of Judgment and thereafter at the current bank lending rate as determined by the Bank of Zambia until full payment, nominal damages in sum of K6,000.00 and simple interest thereon from date of judgment until full payment and costs. The Plaintiff issued a writ of fifa to enforce the Judgment which prompted the Defendants to file present application. The deponent is advised by the Plaintiff's Advocates that although the Court did not state the specific figure of interest 3IPage rate, this is not unusual as the Court provides guidance that the applicable interest rate is short-term or commercial lending rate. The information on interest rates is readily available on the Bank of Zambia website and does not require assessment before Court. The Judgment shows the Court awarded simple interest on the nominal damages of K6,000.00 The Court directed the 3rd Defendant to apply for assessment of its entitlements which has not been done, thus the Plaintiff cannot wait in perpetuity. On 26th October, 2023 the Plaintiff made an attempt to solicit an interest rate from the Defendants' Advocates but none has been forthcoming to date. The deponent asserts that the Bank of Zambia prevailing rates were as high as 17% per 360 days as shown in the consolidated publication of March 2023. The Judgment awarded the Plaintiff short term deposit rate in the first case and thereafter at commercial lending rate. For a tenure of 180 days, the Bank of Zambia and Other Statistics for 2022 show the commercial lending deposit rate was 7.1, which would be higher for a tenure of 360 days. The ·Plaintiff attempted to levy execution and only 6 items were collected out of 20 items listed on the seizure form as such no 41Page damage has been suffered by the Defendants. Further, that the Defendants obtained a stay of execution of the Judgment. Defendants' reply The Defendants filed an affidavit in reply deposed to by Sanmukh Ramanlal Patel. The deponent is advised by his Advocates and believes the Plaintiff inscribed an interest rate which was not communicated to the Defendants and the practice at the Commercial Court registry clerks is that the amount endorsed on the writ of fifa was communicated to the debtor. The deponent asserts the Judgment was not clear on the interest rate to be added to the Judgment debt therefore the Plaintiff was supposed to apply for assessment of damages so as to ensure the interest rates are in accordance with the Judgment. Hearing At the hearing of the application, Counsel for the Defendants relied on the supporting affidavit, skeleton arguments and affidavit in reply. Counsel for the Plaintiff relied on the affidavit in opposition and skeleton arguments and submitted that no prejudice has been suffered by the Defendant as the seizure did not exceed the principal Judgment debt pronounced by the Court. SI Page Counsel submitted that paragraph 14 of the Defendants' affidavit in reply shows the difference of 0.8% is within the de minimus principle as they are agreeing it would be reasonable to endorse an interest rate of 10.8%. thus the difference of 0.8% cannot be a basis to set aside the writ of fifa. In reply Counsel for Defendants submitted the application is premised on the fact that the Plaintiff unilaterally decided the interest on the writ of fifa thus it is irregular. Consideration and decision I have considered the respective affidavits, sk~leton arguments and oral submissions by Counsel. The application is predicated on Order 47/1/8 of the Rules of the Supreme Court, 1999 Edition which provides that: "Setting aside execution This may be done where execution has been improperly issued, even after execution has been levied. Where the Court sets aside a default judgment under 0. 13, r.9 or 0. 19, r.9 (»»text), it will also, at the same time, set aside any execution levied on such a judgment, but will ordinarily provide for the costs and charges of such abortive execution to be paid by the Defendant, if the default judgment was a regular judgment." 6IPage Order 3 rule 2 of the High Court Rules, Cap 27 of the laws of Zambia, provides that: "Subject to any particular rules, the Court or a Judge may, in all causes and matters, make any interlocutory order which it or he considers necessary for doing justice, whether such order has been expressly asked by the person entitled to the benefit of the order or not." It is trite law that execution can only be levied on amounts found due by the Court in a Judgment or agreed to by the parties to an action and incorporated into a Consent Judgment. See the case of Barclays Bank Zambia Pie v Zambia Union of Financial Institutions and Allied Workers (1 ). The Defendants contend the writ of fifa is irregular on the basis that the Plaintiff indicated an interest rate not given by the Court. Further, that the writ of fifa indicates interest rate of 10.8% per annum and simple interest for the sum of K6,000.00 which the Court did not grant as such the writ of fifa is irregular and should be set aside. For the avoidance of doubt the writ of fifa dated 17th July 2023, reads in part as follows: "You are hereby commanded in the President's name that of the goods and chattels of ASTRO HOLDING LIMITED 71Page you cause to be made the sums of ZMW8 455 157.80 and interest thereon from September 2016 to March 2021 in the sum of ZMW6 826 812.19 and interest on the total judgment sum at the rate of 10. 8 per centum per annum from 21 April 2021 to 11 July 2023; interest in the sum of ZMW2 072 208.63; interest on the sum of ZMW8 455 157.80 at the commercial lending rate from 12 July 2023 until final payment; ZMW6 000 and simple interest thereon from 11 July 2023 until final payment." In the Judgment of 11th July 2023, it was ordered as follows: i. An order for the immediate payment of the sum of KB,455, 157.80 as fees for the security services provided to the Defendant from 1st September 2016 to 30th March 2021; I award nominal damages of K6000.00 for breach of 11. contract; 111. interest on the outstanding amount under (i) shall be at the short term deposit rate from date of writ to judgment and thereafter at the commercial lending rate until full payment; simple interest shall accrue on the nominal damages of K6000.00 under (ii) from date ofj udgment until full payment; As regards the interest rate, Order 36 rule 8 of High Court Rules, Cap 27 of the laws of Zambia states as follows: SI Page "Where a judgment or order is for a sum of money, interest shall be paid thereon at the average of the short-term deposit-rate per annum prevailing from the date of the cause of action or writ as the Court or judge may direct to the date ofj udgment." It is indisputable that in the Judgment of 11th July, 2023 an order for payment of the sum of K8,455, 157.80 and nominal damages of K6,000.00 was made. It was further ordered that interest on the outstanding amount of K8,455, 157.80 would be at the short term deposit rate from the date of writ to Judgment and thereafter at the commercial lending rate until full payment, and simple interest would accrue on the nominal damages K6,000.00 from the date of judgment until full payment. A reading of the writ of fifa reveals there seems to be a misinterpretation of orders (i) and (iii) of the Judgment highlighted above. I say so as the writ of fifa indicates the sum of ZMW8 455 157.80 attracts interest from September 2016 to March 2021 in the sum of ZMW6 826 812.19, and interest on the total Judgment sum at 10.8% per annum from 21 April, 2021 to 11 July, 2023. This is a misdirection as the Judgment clearly states that the judgment sum of ZMW8 455 157.80 is fees for the security 9IPage services provided to the Defendant from 1st September, 2016 to th 30 March, 2021. The period of September 2016 to March 2021 is the duration for which security services were provided and not that interest was to be charged for that period. The order specifies that interest on the Judgment sum of ZMWB.455, 157 shall be at short term deposit rate from date of writ to Judgment and thereafter at the commercial lending rate st until full payment. The writ of summons is dated 21 April 2021, thus interest on the Judgment sum of ZMWB,455, 157 .80 at short st th term deposit rate should be from 21 April 2021 to 11 July, 2023 (date of judgment). In light of the foregoing, I agree with the Defendants that the writ of fifa contains interest not granted in the Judgment. I am guided by the Supreme Court in the Barclay's Bank (1 case that ) execution can only be levied on an amount given in a Judgment or agreed to by parties via consent. In the present case, the Plaintiff issued a writ of fifa containing interest of ZMW6,826,812.19 which was not granted by this Court, as such the writ of fifa is irregular and is accordingly set aside. 10 IP age On the consequences of a writ of fifa irregularly issued, the Supreme Court in the case of TAP Zambia Limited v Percy Limbusha and 8 Others (2 stated that: ), " ... a writ of execution which is improperly or irregularly issued ought to be set aside at any stage so that, in an appropriate case, liability should attach to the party on whose demand the irregular execution process has been issued." Section 14 (2) of the Sheriff's Act, Cap 37 of the laws of Zambia provides that: "(2) In every case of execution, all steps which may legally be taken therein shall be taken on the demand of the party who issued such execution, and such party shall be liable for any damage arising from any irregular proceeding taken at his instance." The import of this provision of law is that where a writ of fifa is irregularly issued, costs should be borne by the party at whose instance the writ was issued. Thus, the Sheriff's costs of execution shall be borne by the Plaintiff. I further award costs of this application to the Defendants to be taxed in default of agreement. 11 I Page Leave to appeal is denied. Delivered under my hand this 3rd day of April, 2024. IRENE ZEKO M EWE HIGH COURT JUDGE t<j. ~. JUDICIARYOF-ZAMBIA HIGH COURT , "~'.r•i Ii[ :~ · Commercial Division -2□2;]qii 0 ; ·~PR JUDGE ,,;y· P.O. BOX 50067, LUSAY..A 12 IP age